UNION OF INDIA Vs. M N BASU

JUDGEMENT

(1.) This is a reference under Section 21 of the Chartered Accountants Act, 1949. The Disciplinary Committee found the Chartered Accountant grossly negligent in the conduct of his professional duties and made the report accordingly on the 8th July, 1961. The report of the Disciplinary Committee then came up before the Council of the Institute of Chartered Accountants of India who after a meeting held on the 14th and 15th September 1961 gave the following decision: "The respondent was guilty of professional misconduct under Section 21 of the Chartered Accountants Act, 1949 read with clause (7) of Part I of the Second Schedule to the Act. It was decided to recommend to the High Court that the respondent may be reprimanded."

(2.) The matter now has been referred to this Court for final orders under Section 21(4) and (5) of the Chartered Accountants Act.

(3.) The complaint against the Chartered Accountant in this case is really and in substance two-fold. In the first place, he was supposed to have given the auditor's report on the profit and loss account of the three companies which he audited and specially of a Public Limited Company, called the Bihar Central Agencies Ltd. without showing loan granted by that company to other companies under the same management. In the second place, it is also alleged against the Chartered Accountant that he did not show in his auditor's report the remuneration paid to the Managing Director. This, in short, is the complaint.