Rakesh Kumar Jain, J. - (1.) A reference, made under Section 21(5) of the Chartered Accountants Act, 1949 [for short "the Act"], by the Institute of Chartered Accountants of India, New Delhi, [for short "Institute"], against respondent No. 1, has been placed before us. The reference recommends a reprimand, on the basis of a report of the Disciplinary Committee, wherein respondent No. 1 was found guilty of professional misconduct, falling within the meaning of notification No. CA(7)/46/99 dated 28.10.1999, issued in terms of Clause (ii) of Part II of the Second Schedule to the Act.
(2.) In brief, a complaint was filed by K. Rajinder Singh, Chartered Accountant [for short "complainant"], against Sanjay Mehtani and Harish C. Nayyar, Chartered Accountants of M/s S. Mehtani and Company, to the following effect : "1.1 The respondents have accepted the audit of Gymnastic Federation of India (GFI) and audited the accounts for the years 2001-02 & 2002-03 without communicating with the complainant for seeking No Objection for accepting the said assignment, even when the Complainant were appointed auditors of the Gymnastic Federation of India (GFI) in their A.G.M. Held on 8th August, 1999 at Kisan Bhawan, Sector 35, Chandigarh, for a period of 4 years i.e. From 1.4.1999 to 31.3.2003 which was in accordance of the Constitution and Rules and Regulations of GFI, Clause No. 15(7). The Complainant audited the accounts for the years 1999-2000 and 2000-2001. The accounts of the next years were not produced to the Complainant for audit in spite of repeated reminder to the office bearers. 1.2 The audit fee of the Complainant for the year 2000-01 is due till date which is depicted in the Balance-sheet of Gymnastic Federation of India (GFI). 1.3 The aforesaid charges, if proved, would render the Respondent firm guilty of professional misconduct within the meaning of Clause (8) of Part I of the First Schedule and Notification No. CA(7)/46/99 falling within the meaning of Clause (ii) of Part II of Second Schedule read with Sections 21 & 22 of the Chartered Accountants Act, 1949."
(3.) The Council of the Institute [for short "the Council"], while exercising its power under Section 15(2)(l) of the Act, referred the complaint to the Disciplinary Committee, formed under Section 17(1)(iii) of the Act. The committee, after due deliberations, submitted its report to the Council, which had decided as under : "1(a) to accept the Report of the Disciplinary Committee wherein the Respondent No. 1 namely, Shri Sanjay Mehtani had been held guilty of professional misconduct falling within the meaning of Clause (8) of Part I of the First Schedule to the Chartered Accountants Act, 1949 and; 1(b) to accept the Report of the Disciplinary Committee wherein the Respondent No. 1 was held guilty of professional misconduct falling within the meaning of Notification No. 1-CA(7)/46/99 dated 28th October, 1999 falling within the meaning of Clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. 2. Not to accept the report of the Disciplinary Committee wherein the Respondent No. 2, namely, Shri Harish C. Nayyar was guilty of professional misconduct within the meaning of Clause (8) of Part I of First Schedule and Notification No. 1-CA (7)/46/99 dated 28th October, 1999 falling within the meaning of Clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949.";