Chakravartti, C, J.
1. This is a Reference under Section 21(1) of the Chartered Accountants Act, 1949, made by the Council of the Institute of Chartered Accountants against one Mr. P.K. Mukherji, a Chartered Accountant and a Fellow Member of the Institute, who practises his profession under the name and style of Green & Co. There were three charges against the Accountant, all of which, according to the Council, have been proved.
2. The principal facts of the case are comparatively simple, but with regard to some of the details a great deal of confusion still persists. Broadly stated, the facts are as follows. One Mr. B.B. Basu, proprietor of a concern called the Hindustan Engineering and Construction Company, had five appeals pending before the Income-tax Appellate Tribunal. Three of them were income-tax appeals relating respectively to the assessment years 1945-46, 1946-47 and 1947-48 and the remaining two were Excess Profits Tax appeals relating respectively to the chargeable accounting periods ending on 31-3-1945 and 31-3-1946. The appeals had been filed through 'Messrs. Orr Dignam and Company, but subsequently. Mr. Basu abandoned that very reputed firm of solicitors for Green & Co., because he was led to believe by a friend that it would be more advantageous to him to requisition the services of. the Chartered Accountants. About the motives which led Mr. Basu to change an Attorney for an Accountant, I shall have to say something later It appears that after Mr. Basu had established contact with Green & Co., which meant, Mr. P.K. Mukherji, he put the terms of the engagement into writing by a letter written by him on 14-1-1953. In that letter he stated that he expected relief to the extent of Rs. 1,45,326-1-9 and that the task of the Accountant would be to 'get relief of the above sum.' 'On your getting the said relief,' the letter proceeded to say, 'for the above full amount you will be paid a fee at ten per cent of the above sum.' Along with that letter s, cheque for Rs. 1,000/- was enclosed.
2A. Mr. Mukherji acknowledged receipt of Mr. Basil's letter by a reply, dated 21-1-1953 and informed him that he was perusing the connected papers and would write in 'detail by the 27th of the month.By his next letter which was dated 11-3-1953, Mr. Mukherji informed Mr. Basu that he thought that relief to the extent of Rs. 1,08,000/- might be expected, but in actual fact even a better result might be obtained.
3. Mr. Mukherji, whom henceforward I' shall call the respondent, seems thereafter to have settled down to the conduct of the appeals. He appears to have asked for and obtained certain adjournments and also filed certain Treasury Chal-3ans. Those activities were continued up to 29-6-1953 and no differences appear to have arisen between the parties.
4. Before the appeals came up for hearing, various payments were made by Mr. Basu, whom I shall henceforward call the complainant, amounting in all to Rs. 8,250/-. According to the complainant, such a large payment was made before the hearing of the appeals, because the respondent represented to him that money was required in order to make advance payments to Counsel whom he was going to engage. The complainant's case is that, in actual fact, the respondent took no steps whatever to engage any Counsel, nor did he show any signs of preparing to appear in the appeals himself and whenever an enquiry was made as to what the position with regard to the appeals was, the complainant was put off with the stock reply that the respondent would let him know in due time. Things went in that way till the date fixed for the hearing of the appeals drew very near and the complainant's case is that since he found that the respondent was taking no steps towards his representation in the appeals and he could not safely wait any longer, he went to an Advocate named Mr. H.L. Sarkar, who had already been in the case at its earlier stages and on his advice engaged Mr. S. Mitra a well-known Barrister of Court who has specialised in income-tax matters. There was a third gentleman named Mr. B. Roy, who also was engaged. According to the complainant, this had to be done and was done at the very last moment, 'at the twelfth hour', as he phrased it, because the respondent after having accepted an engagement for appearing and arguing the appeals or making arrangements for the argument on the complainant's behalf, had been completely idle and let complainant down.
5. According to the complainant, the appeals were heard on 10-9-1953. That was the date which he gave in his letter to the respondent of 25-11-1954 and also in his letter to the Secretary of the Institute of Chartered Accountants of 10-12-1954. I am not quite sure that the date thus given by the complainant was correct, but whatever the correct date was, the appeals were heard before 12-9-1953, when orders were passed. By the orders, the Tribunal gave the complainant relief to the extent of Rs. 1,08.576,- which was very near to the sum of 1.08.000/- estimated by the respondent and who must be held to have made a remarkably close guess.
6. There were two letters, one from the respondent to the complainant and one from the complainant to the respondent, immediately before the hearing of the appeals to which I shall have to advert later. . At the present moment, I would pass on to the beginning of the dispute between the parties, so far as it appears from the letters on the record.
7. It appears that on 8-5-1854, which was about eight months after the appeals had been disposed of, the respondent addressed a letter to the complainant by which he recalled his own letter of 11-3-1953 and while referring with evident satisfaction to the fact that the relief actually obtained had been larger than had been anticipate(c)d asked for the payment of the balance of his dues. What the balance was, the respondent did not state. His letter evoked an angry reply from the complainant, dated 1-6-1954, in which the latter stated that the respondent had failed to appear before the Tribunal on his behalf and by reason of such failure, he had been compelled to requisition the assistance of three learned lawyers who had to be paid their fees. In those circumstances, the complainant repudiated the respondent's right to claim any fees from him.
8. After the above letter, there appears to have (been a complete silence' on the respondent's part, The complainant, however, returned to his charge by a letter dated 26-10-1954, in which he reiterated his complaint and by which he called upon the respondent to refund the sum of Rs. 8,250/- which he had received, after deducting his fees for four consultations that had been held with him. The respondent replied to this letter by a letter of his own dated 10-11-1954. In that letter he Rave the date of the disposal of the appeals as 16-9-1953. which could not possibly be correct. Be 'that as it may, the respondent stated that in accordance with the complainant's letter of 14-1-1953 and his own dated 11-3-1953, the complainant was bound to pay him a sum of Rs. 10,857-9-0 of which a sum of Rs. 2,609-9-0 was still due. There was a slight arithmetical error in the figure of the balance claimed, because the balance was obviously arrived at after deducting the sum of Rs. 8,250/- the respondent had received, but if that sum was deducted from the sum of Rs. 10,857-9-0 the balance would be not Rs. 2,609-9-0 but Rs.- 2,607-9-0. This, however, is a matter of no consequence. What is of consequence is that the respondent obviously computed the sum claimed by him at 10 per cent of the amount of Rs. 1,08,5767- by which the tax liability of the respondent had been reduced by the Appellate Tribunal. After putting forward his claim, the respondent stated that he had actually been present before the Tribunal on the date of the hearing of the appeals along with the complainant's legal adviesrs and that the complainant was trying to take an unfair advantage of an omission on the part of the Tribunal to record the respondent's attendance in their order. The respondent then proceeded to give an account of the enormous labour he had undergone in preparing the case and ended by saying that if the complainant was not prepared to pay in accordance with his letter of 14-1-1953, he might let the respondent know whether he would prefer the respondent sending a bill as per the scale sanctioned by the Institute of Chartered Accountants which was Rs. 150/- per diem. The alternative claim thus made, was a claim of fees for eight months, calculated at the rate of Rs. 1507- per day.
9. The complainant's reply to the respondent's letter was dated 25-11-1954. He repeated his charge that the respondent had failed to appear at the 'hearing of the appeals, but was by now using the language of legal accusation. He said that the respondent had failed to fulfil his professional obligations and that having failed in that regard, was not entitled to any payments. There was some reference to what had transpired during two visits paid by the respondent to the complainant at a time when he was lying ill at Barranagorel, but I do not think it necessary to refer to those details. The complainant ended by saying that the alternative claim by the respondent was preposterous, but since he had 'brought in the Institution of Chartered Accountants,' he proposed to refer the matter to the Institute.
10. The complainant proved as good as his threat. On 10-12-1954, he addressed an informalletter to the Secretary of the Institute in which, he gave his own version of the story and asked the Secretary to look into the conduct of the respondent. Among the statements made in that letter to which it is necessary to refer, are a statement that the stipulation with the respondent was that he would charge 10 per cent of the value of, the relief obtained and another statement that the fee was so high, because it was intended to include the charges for engaging eminent Counsel. It was also stated in the letter that the amount of Rs. 8.250/- had been taken by the respondent on the plea that Counsel whom he had engaged for the appeals would have to be paid in advance for appearing in the cases.
11. On receipt of the complainant's letter the Secretary of the Institute directed Mm to lodge : a formal complaint in Form 'P'. That was done; on some subsequent date, which does not appear and along with the formal complaint was submitted an annexure in which the complainant formulated his charges in five paragraphs. It is that annexure which has been taken in the case as the real complaint. There, the allegations arc that the respondent had undertaken to appear before the Income-tax Tribunal and argue the complainant's appeals; that he had taken from the complainant Rs. 8,250/- in advance on the plea that he would have to make advance payment to Counsel whom he would engage for appearing in the cases; that he had neither engaged any Counsel nor appeared, with the result that the complainant had had to engage other Counsel at the last moment on his own account; that after the disposal of the appeals, the respondent had started pressing the complainant for further payments', and lastly, when he had been told that he was not entitled to claim any further payment but was. on the other hand, bound to refund the excess taken by him, he had threatened to charge to complainant for the full period of eight months between the date when he had taken over the cases and the day when they had been heard on a daily basis at the rate of Rs. 150/- per day. The charges made at the end of the complaint were that the respondent had failed to discharge his professional obligation in handling the complainant's cases and that not only had he obtained a sum of Rs. 8,250/-from the complainant by wrongful representation, taut that he had also tried to obtain a larger sum by holding out threats.
12. On receipt of the complaint, the Institute called for a written statement from the respondent. He filed one in due course. Briefly stated, his case was that he had been engaged in the first week of December to go through the papers with a view to ascertaining whether in his opinion there was any chance of getting any relief from the Income-tax Tribunal. After a preliminary examination had been made, the respondent asked the complainant to state what relief he expected and in reply the complainant had informed him that he expected a total relief of Rs. 1,45,326-1-9 and offered to pay a remuneration of 10 per cent of the expected relief. The respondent it was stated, had protested that he could not accept any remuneration on a percentage basis and ultimately a lump sum fee of Rs. 14,000/- to be paid with the gradual progress of the work had been agreed to. The engagement did' not carry any condition that the respondent would have to appear in the appeals personally. His function was to be to explain the accounts to the complainant in order to, enable him to acquaint his legal advisers with the true position of his accounts. In spite of not being obliged to appear at the hearing of the appeals, the res-pondent stated that he had, in fact, appeared. The allegation that he had obtained a sum of Rs. 8,250/-an the plea or having to make advance paymentsto Counsel was denied as a deliberate falsehood. In fact, the fee he had received was remuneration for his personal services and it was not 'at all commensurate with the herculean labour' which he had had to undergo along with his staff for a period of three months and a half. As an indication of the care which he had bestowed on the cases, the respondent stated that his anticipation of the amount of relief which the complainant could expect had been proved to be wrong only by a trifling sum of Rs. 500/-.
13. Subsequently, the respondent filed an additional written statement. It is not necessary to refer to the contents of that statement in detail, except to point out that it was in that statement that the respondent said for the first time that if the complainant's case that he had not appeared at the hearing of the' appeals had been true he would have made an allegation to that effect very much earlier than he had done.
14. Upon a consideration of the complaint and the written statement filed by the respondent, the Institute thought that there was a case for holding an enquiry. Thereupon, the matter was referred to the Disciplinary Committee which held its sittings on 22nd and 23rd June, 1955. The respondent did not appear at the hearing. On his behalf an application was made for an adjournment on the ground of his illness, but the Committee did not accede to the prayer and appears to have disbelieved the excuse put forward. Looking at the circumstances it is impossible to escape the impression that the respondent avoided appearing before the Committee. Although his learned Counsel said that, physically, his Client was not in a condition either to appear or to attend to the case, he was obviously fully instructed, as his careful cross-examination of the witnesses shows and it, is not without significance that when the Committee gave the respondent a second chance o appearing before it after the conclusion of the hearing and fixed 13-8-1955, for the purpose, the respondent did not yet appear.
15. At the hearing before the Committee, the complainant examined himself and Mr. Sukumar Mitra. They were cross-examined at length by Mr. T.K. Ghose who represented the respondent.
16. The charges which the complainant made against the respondent were that he, having accepted an engagement for good consideration to appear at the hearing of the appeals, had failed to do so and, secondly, that he had not only obtained a large sum of money by false representation, but had been trying to obtain even larger sums by means of threats. To those two charges, the Disciplinary Committee added a charge of its own based on facts which had transpired. It found that according to the complainant, the respondent had charged fees at a certain percentage of the expected relief and that circumstance, the Committee thought, furnished the basis for a further charge of misconduct. In the end, the following three charges were framed:--
'(a) The respondent had failed to discharge his professional obligations to the complainant.
(b) The respondent obtained from the complainant a sum of Rs. 8,250/- by wrongful representation much in excess of his fair and normal fees and further wanted to obtain a large sum by holding out a threat on no material ground.
(c) The respondent was charging fees in connection with the appeal cases at 10 per cent of the actual relief.''
17. The Disciplinary Committee found all the charges proved. As stated in the statement of the case, their findings are as follows:--
'(a) That the respondent was not present at the hearing of the case and thereby failed to discharge his professional obligation to his client,
(b) The respondent had obtained from ' the complainant by wrongful representation a sum of Rs. 8.250/- in advance on the plea that he would have to pay in advance the Counsel to be engaged for arguing the complainant's case before the Income-tax Tribunal. This sum of Rs. 8,250/- was far in excess of a reasonable fee chargeable for the Accountant's own services. The respondent further attempted to obtain an additional sum of money based on a percentage of the relief obtained or, in the alternative, at the rate of Rs. 150/-Per diem for a period of about eight months.
(c) The respondent had agreed to take from the complainant fees on the basis of 10 per cent of the amount of relief obtained and had thereby contravened the provisions of clause Cm) of the Schedule to the Chartered Accountants Act, 1949.'
18. The findings of the Committee were in due course considered by the Council of the Institute which also thought that all the charges had been proved. It is those findings which have been forwarded to this Court for necessary action.
19. I have said before and would say again that while performing its statutory obligation of recording its finding under Section 21(1) of the Act, the Council of the Institute, if it finds misconduct, ought to say in terms of the Schedule or of the additions made thereto by the Council itself, under which of the several items the misconduct falls. What the Act contemplates is not misconduct in the general or popular sense, but misconduct as constituted by some specified kinds of act, carefully expressed and set out in the Schedule.) It is not any unworthy or morally reprehensible conduct for which action can be taken under the Chartered Accountants Act. Rightly or wrongly, in my opinion wrongly, the statute has limited the misconduct contemplated by it to certain specified varieties and if an Accountant is to be found guilty of misconduct as known to the Act, he must be shown to have been guilty of one or another of the specified types of misconduct described in the statute itself. Even a cursory examination of the Schedule would show that it by no means covers all possible varieties of misconduct for which' a professional man would seem to deserve reprobation or punishment, but the statute has thoughtfully provided a residuary clause in item (v) of the Schedule and given the Council itself power to add to the types of misconduct which the Schedule enumerates and sets out. It might be useful for the Council to pay some attention to this matter and try to specify as many other varieties of misconduct as might together with those described in the Schedule, reasonably cover all types of unworthy conduct that could ordinarily be expected to be met with in the profession. Be that as it) may, the comment I desire to make on the present occasion is that the Council's finding is of very little assistance to this Court. According to it, the respondent has been guilty of 'misconduct within the meaning of Section 22 of the Chartered Accountants Act.' So stated, the finding means practically, nothing.
20. I may, however, take up the findings as recorded by the Disciplinary Committee, because those are the findings of which the Council approved. Taking the first of them, I feel bound to hold that it is not possible to accept it. The finding is that the respondent was not present at thehearing of the cases and thereby failed to discharge his professional obligation to his client. The failure to discharge the professional obligation is obviously constituted by the respondent's failure to be present at the hearing of the appeals. But it seems to me that, on the case made by the complainant himself, there can be no question at all of the respondent being bound to appear before the Appellate Tribunal. He might have been guilty of negligence in not having made suitable arrangements for the representation of the complainant in the appeals or in not preparing himself for appearance on the complainant's behalf. But once the complainant had gone in for other representatives and had briefed Counsel to appear for him in the appeals, he obviously discharged the respondent by his own conduct and thereafter, there could be no question of the respondent being required to appear in the appeals. I would say again that he might have been guilty of negligence or breach of contract at the earlier stages, but after he had been thrown over, as it were, even if it might have been on account of his own miscondcut, he could not be charged with having failed to appear at the hearing of the appeals. Non-appearance before the Appellate Tribunal cannot, therefore, ground a charge of misconduct against the respondent.
21. The matter, however, does not rest there. As to whether the respondent was actually present at the hearing of the appeals, it appears to me that on the evidence before us it must be held that he was not. The Disciplinary Committee has come to the same finding but has based its decision solely on the evidence of Mr. Sukumar Mitra. The evidence of Mr. Mitra must be accepted in its entirety, but I feel bound to say that the manner in which he was examined was a little short of the ludicrous. On his own showing, the respondent was a total stranger to Mr. Mitra and even his physical fetures were totally unknown 'to him. Indeed, Mr. Mitra himself stated that if the respondent had been present at the hearing of the appeals, he would not have known him. Neither was the respondent present before the Disciplinary Committee, so that it was not as if he was pointed out to Mr. Mitra and Mr. Mitra was asked whether he had seen that person at the hearing of the appeals. To ask Mr. Mitra whether he had seen a man, totally unknown to him before the Appellate Tribunal, was to ask a question which was almost comical. All that Mr. Mitra, in my view, could possibly say was that he did not sec anyone at the hearing of the appeals, who, in his View, could possibly be the respondent. It is to be noticed that besides naming certain persons who were present. Mr. Mitra adds that there might have been one or two trainees. The trainees, if there were any there, would not 'be known to Mr. Mitra personally and if there was thus the possibility of there having been one or two persons, not known to Mr. Mitra, the respondent might well have been one of them. I am, therefore, of opinion that Mr. Mitra's evidence, although the whole of it must be accepted, is by no means conclusive.
22. At the same times, it appears to me that It is the respondent himself who has in a manner proved that he was not present at the hearing of the appeals at all. If he had been, as his case is, it is surprising that when, on 1-6-1954, the complainant first charged him with having failed to appear, he did not say a word in protest and did not even reply to that letter. In neither of the two written statements filed by him is there any account given as to how he had prepared the appeals, in what manner he had been brought into contact with the Counsel appearing in them andwhether he had attended consultations or' not. With regard to these matters, his Written statements are a complete blank. Although I have stated that Mr. Mitra's evidence, taken by itself, is not conclusive, I consider it incredible that if the respondent had actually attended the hearing of the appeals, he should not have been introduced to Mr. Mitra or should not have introduced himself to him as one of the professional men who were engaged in the cases on the complainant's behalf. It was indeed suggested to the complainant that the respondent had given instructions to Mr. Mitra from the second row at the hearing of the appeals, but most curiously, not a word to that effect was put to Mr. Mitra himself. One other circumstance which seems to me to weigh heavily against the respondent is that while he knew that he was being charged with not having appeared at the hearing of the appeals and knew also that the records of the Appellate Tribunal did not contain; his name, he did not make any application for the insertion of his name till 15-7-1955, which was about two years after the disposal of the appeals and about a month after the conclusion of the enquiry by the Committee. I am, therefore, inclined to agree with the Disciplinary Committee that, in actual fact, the respondent was not present at the hearing of the appeals.
23. The real question, however, is whether by failing to appear, he had failed to discharge his professional obligations to the complainant, as found by the Disciplinary Committee. I have already given one reason for holding that the respondent cannot be charged with having failed in the discharge of his professional obligations. It appears to me that from the facts of the case, another reason may be drawn.
24. I referred sometime ago to two letters which passed between the parties shortly before the hearing of the appeals. I would now refer to them in detail. According to the complainant, the appeals were heard on 10-9-1953. About a week before that or at least three or four days earlier, he had come to know that the respondent had let him down and he had been forced to seek the assistance of Counsel on his own account at considerable expense to himself. If that story be true, the respondent bad by that time thoroughly condemned himself in the eyes of the complainant as a man who had broken his professional faith and who had landed the complainant into a terrible difficulty. Yet, one finds that On 8-9-1953, the respondent was coolly addressing a letter to the complainant and asking him for a payment of Rs. 1750/- which, he said, would be the balance of Rs. 10,000/- that would be his due, even if a relief of Rs. 1.00.000/- only was granted. The letter states that the writer is convinced that a relief of a minimum amount of Rs. 1,50,000/- must be obtained and he adds that the judgment is likely to reach the Calcutta Bench from Allahabad by the end of the current Week. This letter, written on 8-9-1953, gives one the impression that the hearing of the appeals had already taken place, but I shall accept the complainant's account that the appeals were not heard till the 10th September following. What I desire to point out is that unless the respondent be a person capable of the most incredible cheek, he could not have on 8-9-1953, written to the complainant in the complacent manner of this letter and quietly asking for a further payment, knowing all the time that the appeals were due to be heard in a day or two and that having undertaken to appear at the appeals on the complainant's behalf, he had neither prepared himself for the task, nor made any other arrangement for the complainant's representation. Frankly, I find itquite Impossible to fit in this letter with the complainant's version on what the facts were. But assuming that the respondent is a person capable of the calculated presumptuousness of which his letter of 8-9-1953. would be an illustration, if the complainant's story be true, his own letter of the following day gives a complete lie to the story with which he went to the Institute. By that letter, he purports to reply to the respondent's letter of the 8th of September and all that he says is that it is not possible for him to make further payments before he has received the order and before he has come to know the nature and quantum of the relief. It is to be noticed that he is not saying a word as to the respondent's having let him down, nor is he repudiating the respondent's claim to payment. On the other hand, he is professing his readiness arid willingness to pay and all that he is saying is that he cannot know what his liability to the respondent would be before he has informed himself of the extent of the relief which the Tribunal has granted him. This letter, written on the 9th September, 1953, only one day earlier than the date on which the appeals were coming on for hearing, is utterly irreconcilable with the' complainant's story that the respondent had let him down and that by reason of the eulpable negligence of the respondent who had done nothing to deserve even the fees already paid to him, he had been driven at the last moment to the desperate need of requisitioning 'the assistance of other expensive Counsel.
25. What could then have been the real facts? It appears to me that only one hypothesis is consistent with all that we know. It is that, for some reason or other, the complainant had broken off with the respondent and no longer expected him to appear at the hearing of the appeals. Similarly, the respondent did not think that he was any longer required to appear before the Tribunal. There might have been previous defaults on the part of the respondent which had brought about that change in the relationship between the parties, but in view of the complainant's letter of 9-9-1953. I find it wholly impossible to believe that he was still expecting the respondent to appear on his behalf or that, in his view, the respondent had played false with him at the last moment. If then the respondent was no longer expected or required to appear, whatever might have been the reason which created that position, there could be no charge against him of having failed to discharge his professional obligations to the complainant by failing to appear at the hearing of the appeals. The first charge against the respondent must, therefore, be held to have not been proved. The Disciplinary Committee, in coming to a contrary finding, did so without considering the significance of the two letters of the 8th and 9th September. 1953.
26. With regard to the second charge, the position is comparatively simple. In my view, that charge also cannot be said to have been established. The finding is that the respondent had obtained a sum of Rs. 8,250/- by wrongful representation, that this sum was far in excess of a reasonable fee chargeable by an Accountant for his own services and that the respondent had further tried to obtain a larger payment on the alternative basis of a daily rate of Rs. 150/-. The Council has not stated, nor was Mr. B.K. Gliose, appearing for the Institute, able to inform us under what item of the Schedule or of the additions made thereto by the Council, this conduct of the respondent could fall. That by itself is a sufficient answer to this charge, but it appears 'to me that, even on the facts, it does not rest on too firm a basis. In the first place, the complainant's case that the sum of Rs. 8,2507-was paid to the respondent, because he wanted ison the false plea of having to make advance payment to Counsel whom he had engaged or was going to engage, does not seem to fit in very well with the nature of the payments. The payments were admittedly made in driblets and I do not find it easy to understand how a larger number of payments obtained in small sums could have been obtained on a plea of having to make advance payments to Counsel. It is true that there was one large payment of Rs. 3,000/-, but with respect to that sum, the complainant was insisting even after he had had an opportunity of referring to his records that it had been paid after the hearing of the appeals. That certainly was not correct, because the receipt granted for the whole amount of Rs. 8,250/- is dated the 2nd of September. 1953. But it shows that it is not safe to proceed on the testimony of the complainant.
27. While on the subject of the value of the complainant's testimony, I regret to have to say that he did not give his evidence in a way that would make any tribunal feel safe in proceeding upon it. In the first place, he was insisting that he had never visited the respondent at any earlier date than the 13th of January, 1953, namely the day just before the date on which he wrote his first letter. Several questions were put to him on that matter, but was emphatically denying that he had ever gone to the respondent or had had any relations with him in December, 1952, or at any time earlier than one day before the 14th of January, 1953. Yet, the power of attorney executed by him in favour of the respondent bears his signature over the date, 29th of December, 1952, put down by himself. aS regards the date when he came to know that the respondent had let him down, he put it as the date immediately preceding the day on which the appeals were due to be heard in his letter to the Secretary. In his deposition before the Disciplinary Committee, ha stated that he had seen Mr. H.L. Sarkar two or three days before the hearing of the appeals and that Mr. Sarkar had said that he had already-read the papers. Unless he had gone to Mr. Sarkar even earlier, I cannot see why Mr. Sarkar should have read his papers at all. It is true that he had been in the case at the earlier stages, but if, as the complainant himself would insist, he had entrusted the charge of the appeals to the respondent and was relying on him for appearing in and arguing them, there could be no reason for Mr. H.L. Sarkar gratuitously reading his paper for no purpose at all. It would, therefore, seem that the complainant was not giving a wholly correct or truthful account as to the time when he came to know of the alleged defection of the respondent. His evidence about the date when the sum of Rs. 3.000/- was paid is the strangest of all. How along with the story that the respondent had let him down and in the face of the receipt dated the 2nd of September, 1953, he could ever have insisted that he had made a payment of so large a sum as Rs. 3.000/- after the conclusion of the appeals, it is impossible to understand. I think I have said enough for disposing of the second charge' which, in my view, has not been established as misconduct.
28. There remains the third charge. The finding of the Committee in respect of that charge is that the respondent had agreed to take from the complainant fees on the basis of 10 per cent, of the amount of relief obtained and had thereby contravened the provisions of Clause (m) of the Schedule to the Chartered Accountants Act. 1940.
29. There can be no doubt that the Committee's finding on the third charge rests on asecure basis. Indeed, no proof of the charge is. required beyond the respondent's own letters, particularly those of the 8th of September, 1953 and the 10th of November, 1954. Mr. Moitra who appeared for the respondent very fairly conceded that in view of the materials on record, he could not possibly say that the finding arrived at by the Disciplinary Committee and endorsed by the Council was not a proper finding, amply supported by evidence. He, however, contended that, nevertheless, the respondent had not been guilty of misconduct in law.
30. Mr. Moitra put forward his defence in several branches. He contended, in the first place, that on the complainant's own showing, as evidenced by his letter to the Secretary of the Institute, the fees agreed to be paid to the respondent were intended to include the fees of Counsel who would be engaged for the appeals. Mr. Moitra's contention was that the Chartered Accountants Act was concerned only with fees charged by Chartered Accountants for their professional services as such. It had no concern with fees charged for the services of other people, even though such services might be requisitioned by or through a Chartered Accountant. It was pointed out that the language of Clause (m) of the Schedule was 'charges in respect of any professional employment fees' and it was contended that the misconduct contemplated was limited to cases where the offensive basis of calculation was adopted for fees charged by a Chartered Accountant for his own services.
30a. I do not think that the fees charged by the respondent in the present case can at all be dissected in the manner suggested by Mr. Moitra. As between the complainant and the respondent, the stipulation was that the respondent would receive 10 per cent, of such relief as might be obtained and even if the high percentage had been agreed to in recognition of the fact that Counsel would have to be paid for, the stipulation still was that the respondent would receive 10 per cent, by way of his fees and the fact that out of those fees he would nave to incur expenditure in order to procure further assistance from another branch of the profession, would not alter the nature of the bargain at all. What we have to pay regard to is the stipulation as between the complainant and the respondent; how much was the respondent charging from the complainant for the services proposed to be rendered by him and on what basis was he charging it? It might be that in reaching the figure charged or the scale at which the fees were to be charged, the parties had taken into account expenses which the Accountant would have to incur. But the true nature of the bargain, to my mind, was that the respondent would get 10 per cent, of the relief obtained by way of his fees and all his in-pocket and out of pocket expenses. I do not, therefore, think that even assuming that a part of the fees agreed to be paid to the respondent was intended to be spent on Counsel, the respondent was any the less charging fees in respect of his own professional employment. I would add that since the whole amount of the fee was to 'be paid on a percentage basis, it is clear that even if a part of it could be isolated as intended or ear-marked for Counsel, the part which would remain and which would be the Accountant's own fees, would still be an amount computed on a percentage basis, although it would be a lower percentage. The first ground of Moitra's contention must, therefore, be held to be unsound.
31. The second branch of Mr. Moitra's .argument was that in any event the Chartered Ac-countants Act was concerned only with professional misconduct in the capacity of Accountant and did not seek to penalise misconduct of which an Accountant might be guilty in some other capacity. Reference was made to our decision ill-Controller of Insurance v. B. Mukherjee. 60 Cal WN 91 (A), where it was held that the Act made no provision for taking disciplinary action against! Chartered Accountants in respect of conduct committed otherwise than in the exercise of' their profession and on the basis of that decision it was argued that there was nothing to show that the respondent had accepted the engagement in the capacity of a Chartered Accountant and that in fact he had purported to function only as an income-tax practitioner.
32. In my view, this contention of Mr. Moitra is answered by the facts of the case. In view of the correspondence which passed between the parties, it is utterly futile to contend that the respondent was not approached as a Chartered Accountant or that he did not accept the engagement in that capacity. There is in every one of the letters written to or written by the respondent specific reference to his status of a Chartered Accountant and it is perfectly plain that his. professional services were being engaged and were being offered in that capacity alone. Indeed, as Mr. Ghose appearing for the Institute pertinently pointed out, if the respondent was not functioning as a Chartered Accountant, he could not possibly have claimed from the complainant fees at the rate of Rs. 150/- per diem as per sanctioned scale of the Institute of Chartered Accountants, as he did by his letter of the 10th of November, 1954. Really, it is not open to Mr. Moitra to raise that contention at the present stage. Before the Institute, when filing his written statement and before the Disciplinary Committee in the course of the enquiry, there was not the slightest hint at: any time that the respondent was making the case that he had not purported to function and had not in fact functioned as a Chartered Accountant in the transaction with the complainant but had done so in some other capacity. Indeed in paragraph 5 of the annexure to the complaint in Form P, the complainant alleged that the respondent's firm had 'failed to discharge their professional obligation in handling my cases'. The respondent dealt with that paragraph of the complaint in paragraph 5 of his additional written statement and nowhere did he seek to controvert the allegation--apart from whether he had failed to discharge his professional obligations--that the obligations were of the professional character. In my view, the contention of Mr. Moitra that the respondent had not acted as a Chartered Accountant is completely negatived by the facts of the case and completely excluded by the respondent's own pleading.
33. Mr. Moitra nest tried to give to his contention an appearance of law by relating it to Section 61 (1) of the Income-tax Act. That section provides that any assessee, who is entitled or required to attend before, inter alia, the Appellate Tribunal, may attend by a person authorised by him in writing in this behalf 'being a relative of or a person regularly employed by the assessee or a lawyer or accountant or Income-tax practitioner'. Mr. Moitra's contention was that since Section 61(1) of the Income-tax Act provided for appearance by representatives of several different categories, it could by no means be said that the respondent had appeared as belonging to any particular one of them; not to speak of his having appeared in the capacity of an Accountant. It was contended furtherthat, in actual fact, the respondent had appearedin the capacity of an Income-tax practitioner.
33A. I must say at once that it' it was the respondent's case that he had not entered appearance before the Tribunal in the capacity of an Accountant, but had done so in the capacity of an Income-tax practitioner, it was his duty to raise that plea before the Institute in his written statement or before the Disciplinary Committee in the course of the enquiry at which he was represented by Counsel. We cannot possibly allow a fresh issue of fact to be raised in a reference under Section 21(1) of the Act. But the contention of Mr. Moitra is patently unfounded. There is on the record the power of attorney filed by the respondent and that shows, as clearly as any document could show anything, that he had entered appearance in the capacity of an Accountant and in no other capacity. Indeed, there is no evidence before us that he is an income-tax practitioner at all in the sense in which that term has been defined in the Act.
34. Mr. Moitra next contended that even assuming that the respondent had appeared before the Tribunal as an Accountant, he had not been, in doing so, practising the profession of an Accountant, but had been functioning in a special capacity. I find it impossible to accent that contention as well. It will be noticed that the various types of representatives whom Section 61(1) of the Income-tax Act recognises are recognised because of the particular character they bear or the particular profession to which they belong. An Accountant is recognised as a competent representative on the ground that he is an Accountant, from which, to my mind, it follows that when representing an assesses before the Appellate Tribunal or any other Income-tax authority, a Chartered Accountant practises his profession of accountancy in one of its, aspects. The word 'accountant' is defined in Clause (iii) of sub-s. (2) of Section 61 and it is somewhat curious that !n spite of the enactment of the-Chartered Accountants Act, the definition given there has not been amended. In any event, the definition contains a reference to 'Accountants enrolled under the Auditors Certificate Rules, 1932, and the res-pondent before us was an Accountant, so enrolled, before he became a Chartered Accountant by the operation of the Act. It is thus as an Accountant that he figures in the contemplation of the Income-tax Act. If one turns next to the Chartered Accountants Act and tries to find out from there what the functions of a Chartered Accountant are, one finds in Section 2(2) a reference to rendering professional services 'in or about matters of ...... -presentation or certification of financial facts or data'. Section 2(2), however, is concerned only with the definition of a practising member of the Institute, but for all practical purposes it may be taken to be a definition of Chartered Accountants. Clause (iv) of the definition is in the nature of a residuary clause which provides that a member of the Institute, that is to say, a Chartered Accountant, may render such other services as, in the opinion of the Council, are or may be rendered by a Chartered Accountant. When one goes next to Regulation 78 framed by the Council, one finds that a Chartered Accountant is permitted to act 'as a representative for costing, financial and taxation matter'. This language would, in my opinion, cover appearance before an Income-tax authority, but it must be admitted that the Regulation begins with the words 'without prejudice to the discretion vested in the Council in this behalf', which would suggest that the functions enumerated in the Regulation are not among the permanent func-tions which Chartered Accountants may claim to exercise as of right, but only functions which the Council may permit its members to exercise and which may be withdrawn at any moment from the category of permissible functions. It seems to me, however, that while that limitation is undoubtedly a real one in the case of the other functions enumerated in the Regulation, it is not so' in the case of representation in taxation matters, be-cause the right of such representation before the Income-tax authorities has been given to Accountants by an Act of the very Legislature which passed the Chartered Accountants Act. It would, therefore, seem that the opening words of limitation contained in Regulation 78 are inappropriate, so far as they concern functioning toy a Chartered Accountant as a representative of assessees in taxation matters I had occasion to consider Regln. 78 in the case of 60 Carl WN 91 (A) cited before us and I observed there that the functions specified in the Regulation were not related to the profession of accountancy but were only functions which, in the Council's view, it would not be objectionable for Chartered Accountants to exercise. 'There is nothing in this rule', I said, 'to indicate that duties in connection with the various offices in the approved list, when performed, will be performed in the professional capacity of Chartered Accountants'. That remark is undoubtedly correct so far as a liquidator, trustee, executor, arbitrator or receiver is concerned, but on further consideration I think that it requires to be modified in so far as it relates to functioning as a representative in a taxation matter. Such functioning would be in the capacity of an Accountant by reason of the express provision contained' in Section 61(1) of the Act and accordingly it seems to mp that there is no room for Mr. Moitra's contention that the respondent had not functioned in; his professional capacity of an Accountant.
35. Indeed, it would seem clear from Sub-section (3) of Section 61 that any Accountant who may be guilty of misconduct in connection with Income-tax proceedings will be amenable to the jurisdiction of the Institute of Chartered Accountants and such misconduct would thus be within the ambit of the Chartered Accountants Act. The sub-section pro-vides that if any Registered Accountant is found guilty of misconduct in connection with any Income-tax proceeding by the authority empowered to take disciplinary action against members of the profession to which he belongs, the Commissioner of Income-tax may direct that he shall thenceforward be disqualified to represent an assessee under Sub-section (1). The clear implication of that provision is that an Accountant, representing an assessee under Sub-section (1) of Section. 61, does not cease to be an Accountant and does not cease to be under the disciplinary control of the profession to which he belongs, but, on the other hand, remains answerable to the professional body of which he is a member for any misconduct which he may commit in connection with Income-tax proceedings. Sub-section (3) of Section 61, in my view, is a complete answer to Mr. Moitra's contention that, an Accountant, even if he may be guilty of misconduct when representing an assessee before the-Income-tax Appellate Tribunal, cannot be proceeded with under the Chartered Accountants Act, because such misconduct would not be misconduct, committed in his professional capacity as an Accountant.
36. Although I have discussed Mr. Moitra's contention in all its branches, there is in my view a short and simpler answer to it. The engagement which the respondent entered into with the complainant was not merely for his appearanceat the hearing of the appeals, but his engagement was to take charge of the appeals as they were and to obtain the relief which the assesseeexpected. It was not an engagement limited to the performance of forensic functions at the actual hearing of the appeals. It was an engagement of a more comprehensive nature, involving, on the respondent's own showing, a close andprolonged examination of the accounts, instructing the complainants to their true nature and, although the respondent denied it,, actual appearance at the hearing of the appeals. If regard be Daid to the real character of the engagement as evidenced by the letters on the record, it appears to me that Mr. Moitra's contention that the respondent was not functioning in his professional capacity of a Chartered Accountant, but only as an Income-tax practitioner or pleader, must at once Ike put on one side.
37. For the reasons given above, we must hold, in disagreement with the Council, that the first and the second charges have not been established against the respondent, but hold, in agreement with the Council, that the third charges has been established.
38. The only question which remains is the order we ought td make. Under Section 21(3) of the Act, we arc to pass such, final orders as we think fit to pass. Mr. Moitra pleaded that there were several extenuating circumstances in the case and as instances of such circumstances, he referred to the volume of work which, according to him, the respondent had done in the interest of the complainant. There is no evidence before us of what work had been done by the respondent, but as-isuming he had done a large amount of work, the volume of such work does not, in my view, constitute any extenuating circumstance at all. The respondent, it ought to be remembered, is not being charged for having demanded excessive fees. The whole charge against him is that he charged fees on a basis which the Act forbids and which the profession disapproves. The evil which Clause (m) o the Schedule aims at striking down is not the charging of exorbitant fees from persons who require the services of Accountants, but the adoption of methods in charging fees, which involve a purchase by the Accountant of an interest in the relief which he may secure for his client. A professional man ought to charge remuneration for the services rendered by him in a straightforward manner, commensurate with the volume and character of his exertions and must not engage in a kind of gambling. If such be the end which Clause (m) of the Schedule is intended to serve, it is no' answer to say that the respondent laboured long and hard in the interest of the complainant. Once it is proved that a Chartered Accountant charged fees for his professional employment on a percentage of profits or as contingent on results, his misconduct is established. There is no room for argument, as there may be under the Legal Practitioners Act or the Bar Councils Act, each of which refers in the end to misconduct in general terms, that professional misconduct does not include engagement in champertous arrangements with clients. In the case of the Chartered Accountants Act, charging of fees on a percentage basis is specifically included among the condemned varieties of misconduct.
39. The only other submission which Mr.Moitra made--and in this he was joined by Mr.Ghose appearing on behalf of the Institute--was that the respondent was a comparatively young man, and a severe penalty inflicted on him wouldaltogether blast his career. We have taken that circumstance into our consideration. We have also taken into account another circumstance which appears to us to furnish some extenuation. While it is true that the respondent violated the code of professional conduct laid down in the statute which gives him his right to practise, there can be no doubt that in committing the violation, he was to a certain extent aided and abetted by the complainant himself. According to his own evidence before the Disciplinary Committee, the complainant sought out the respondent, not because he had heard of his eminence in the profession but because a friend of his, whom he preferred to leave nameless, told him that the respondent's firm pooled great weight with the Appellate Tribunal--'wielded a great power there'--and that he would be able to get whatever he desired if he engaged them. It was for that reason that he, on his own showing, forsook the reputed firm of solicitors through which he had filed the appeal and went in for an unknown Accountants who was said to enjoy the dubious reputation of which he spoke. I . wonder if the complainant realised that the statement he was making was grossly defamatory of the Income-tax Appellate Tribunal and not very complimentary to himself. The picture he was painting of himself was that, as an assessee to income and excess profits taxes and an appellant against certain assessments, he was not prepared to trust merely the open method of submissions made by competent representatives on the merits of the cases, as they were, but he was capable of trying to harness underground forces which he believed might be profitably brought under requisition for influencing the Tribunal. When one remembers that admission, one begins to feel that the high fees agreed to be paid to the respondent were not offered, because they were intended to include fees of Counsel, as alleged, but because the complainant thought that he was buying underground influence which is always highly priced. The terms mentioned in the letter of the 14th of January, 1953, are not that the respondent would get 10 per cent, of whatever relief he might obtain, but that if the respondent succeeded in procuring the named relief of Rs, 1,45,326-1-9. he would be paid 10 per cent, of that relief. Those terms appear to constitute a temptation and it is doubtful whether, when they were offered as agreed to, the secret influence of the respondent on which the complainant was counting was expressly mentioned by him. It must be said in favour of the respondent that in none of the several letters which he addressed to the complainant was there the slightest claim to any influence with the Tribunal or any reference to 'anything done by him except in the ordinary course of the normal duties of a professional man. In my opinion, the comparative immaturity of the respondent and the manner in which he was approached by the complainant with the offer of a very substantial and highly paid engagement from the not very creditable motive which he himself admitted, are extenuating circumstances which may be taken into account in the respondent's favour.
40. In all the circumstances of the case, we think that the respondent has been guilty of misconduct of the kind mentioned in item (m) of the Schedule to the Act. We think further that the ends of justice require that some penalty should be inflicted, but, at the same time, that the ends of justice will be satisfied by the infliction of a moderate punishment. We accordingly find the respondent guilty of the misconduct of charging fees on a basis of a percentage of the profits anddirect that he be suspended from practice for a period of three months from to-day.
41. There will be no order for costs.
42. I agree.