- (1.) THE respondent is an incorporated and registered accountant practising in Bombay, and we have before us a report made by the Council of the Institute of Chartered Accountants of India submitting its finding that the respondent has been guilty of misconduct which renders him unfit to be a member of the Institute, and the report has come before us under Section 21 of the Chartered Accountants Act (XXXVIII of 1949 ).
(2.) MR. Khandalawala who appears for the respondent has, in the first instance, raised certain question of law, and in order to dispose of them it is necessary to look at the scheme of the Act which has been recently passed by the Legislature. The object of the Act is the establishment of an Institute of Chartered Accountants and that Institute is constituted a body corporate with perpetual succession, and among others all persons who were registered accountant are entitled to have their names entered in the register of the Council of the Institute and also its functions. It confers disciplinary jurisdiction upon the Council and provides that where information is received which goes to show that a member of the Institute has been guilty of conduct which if proved would render him unfit to be a member of or on behalf of the Central Government, the Council shall cause an inquiry to be held in such manner as may be prescribed and the finding of the Council shall be forwarded to the High Court. Then on receipt of the finding the High Court has to fix a date for the hearing of the case and after hearing the case the High Court has been empowered to pass final orders on the report of Institute. Then "misconduct" is defined, and Section 31 or qualified auditor in any other law for the time being in force or in any document whatsoever shall be construed as a reference to a chartered accountant as defined in the Act", and there is a schedule to the Act which sets out various instance which would render a charted accountant guilty of conduct rendering him unfit to be a member of the Institute.
(3.) NOW, before this Act was passed registered accountants were enrolled by the Central Government and the Central Government exercised all disciplinary powers with regard to registered accountants and Auditors Certificates Rules were framed under Section 144 (2) of the Indian Companies Act which provided for the issuing of an auditor's certificate and also empowering the Central Government to remove permanently or temporarily from the register of auditors persons who were found guilty of misconduct.;