Decided on October 07,1952



RAJAMANNAR, C. J. - (1.) IN this case referred to us under Section 21 of the chartered Accountants Act, 1949, the respondent is a Chartered Accountant who was appointed as Auditor to audit the accounts of C.M.C.High School, elathur, Korapoya Post, for the financial year 1949-50. One T. R. Subbarama aiyar was the Auditor who had been appointed to audit the accounts of the same school for the previous financial year. He complained to the Secretary to the council of the INstitute of Chartered accountants of INdia that the respondent was guilty of conduct rendering him unfit to be a member of the INstitute because he had accepted the position of Auditor previously held by him without communicating with him in writing. Such action is deemed to be misconduct within the meaning of Section 22 of the Act, under clause (h) of the Schedule to the Act It is common ground that the respondent did not inform the complainant, his predecessor, of his appointment before he accepted the appointment for the year 1949-50. There was an inquiry by the Disciplinary committee of the Council who reported that the respondent had committed a breach of clause (h) of the Schedule to the Act, as he did not communicate with the complainant in writing about his appointment as auditor of the school. On that report, the Council gave the following finding :- "the respondent in not communicating with the complainant in writing, who was the previous auditor of C. M. C. High School, of his appointment as auditor of that school, has committed a breach of clause (h) of the Schedule to the Chartered Accountants Act, 1949. But he appears to be under a misapprehension that when appointments are made by State Government it is not incumbent on him to communicate with the previous Auditor in writing. The Act, however, leaves no option but to recommend that the name of the respondent be removed from the Register, but to this we would add that in view of the extenuating circumstances, the removal may be nominal only and the respondent may be permitted to apply for reinstatement immediately thereafter."
(2.) IT was contended by Mr. Viswanatha Aiyar for the respondent that clause (h) of the Schedule would not cover a case like the present but would only apply to a case where during the period of office held by one auditor another auditor is appointed. According to learned counsel, it is only in such cases that the auditor subsequently appointed has to inform the auditor who had already been appointed of the fact of his new appointment. He contends that the words "a position as auditor" same institution for the financial year 1948-49 holds a position which is different from the position of an auditor for the subsequent year 1949-50. In our opinion, this contention is unsound. The words "a position as auditor" are of a general character and to so restrict their meaning as to treat an auditor for one year as holding a position different from that of an auditor for a subsequent year of the same company or other institution is unwarranted. We must therefore hold, agreeing with the Disciplinary Committee and the Council of the institute, that the respondent was guilty of misconduct mentioned in clause (h) of the Schedule At the same time we cannot help remarking, as indeed the committee and the Council have remarked, that the respondent was guilty of a technical breach of professional propriety and he cannot be said to be guilty of any moral turpitude. He was apparently under a misapprehension that it was not necessary for him to communicate with his predecessor. He has unconditionally expressed his regret and has assured the Committee that he never meant any breach of discipline Though the respondent may therefore be guilty of misconduct under Section 22 of the Act, we do not think that we have no option but to direct his name to be removed from the Register of Chartered accountants. We have examined this point on two prior occasions and we have held that it is open to this court on a reference under Section 21 to pass such order as appears to this Court to be fit and proper, having regard to the circumstances of the case. We held that Section 20 (2) of the Act must be read subject to the powers of the High Court under Section 21 (3) of the Act, vide Referred Cases nos. 55 and 56 of 1952in Referred case No. 55 of 1951 we thought it was sufficient punishment to the respondent if he was warned. In the present case, in view of the regret expressed by the respondent and his assurance that no breach of professional conduct was intended, we do not think that even a warning is necessary. In our opinion, no further action is called for in this case Ordered accordingly.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.