Gujarat High Court
C A Rajesh V Dudhwala vs Disciplinary on 6 November, 2012
Author: Ravi R.Tripathi
Bench: Ravi R.Tripathi
C A RAJESH V DUDHWALA....Appellant(s)V/SDISCIPLINARY COMMITTEE....Respondent(s) C/LPA/28/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL NO. 28 of 2013 In SPECIAL CIVIL APPLICATION NO. 10813 of 2012 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE RAVI R.TRIPATHI and HONOURABLE MR.JUSTICE R.D.KOTHARI ======================================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ======================================================================= C A RAJESH V DUDHWALA....Appellant(s) Versus DISCIPLINARY COMMITTEE....Respondent(s) ======================================================================= Appearance: MR TEJ SHAH, ADVOCATE for the Appellant MR SN SOPARKAR, SENIOR ADVOCATE assisted by MR JAIMIN DAVE, ADVOCATE & MS BHOOMI THAKORE, ADVOCATE for MRS SWATI SOPARKAR, ADVOCATE for the Respondent ======================================================================= CORAM: HONOURABLE MR.JUSTICE RAVI R.TRIPATHI and HONOURABLE MR.JUSTICE R.D.KOTHARI Date : 01-02/04/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI)
1. The present appeal is filed by a Chartered Accountant who is punished by the Council by debarring him from active practice for a period of one year. An appeal was filed before the Appellate Authority which was headed by none other than a Retired High Court Judge, assisted by three other members, who had to conclude as under:-
14. Thus, the aforesaid position of law clearly demonstrates faith that various government departments have in the professional qualification, competency and integrity of a Chartered Accountant and hence the various statutory duties and responsibilities cast upon a Chartered Accountant under various provisions of the Act. There are other statutes like Co-operative Societies act, Bombay Public Trust Act etc., where also the importance of the report of Chartered Accountant has been statutorily recognized and accepted. It is in the aforesaid context that the conduct of the respondent has to be tested and appreciated in the context of evidence placed on record.
15. In our considered view, the appellant was rightly held guilty of professional misconduct falling within the meaning of clause (7) of Part 1 of Second Schedule to the Chartered Accountants Act, 1949 (as amended by Chartered Accountants (Amendment) Act, 2006). The appellant had shown gross negligence and carelessness in certifying the Tax Audit Report which did not reflect a true and fair picture of the affairs of the company. It seems that the appellant signed the tax audit report without actually performing audit as required. We consider that a Chartered Accountant cannot allow himself to sign the certificates in a mechanical manner and cannot be so oblivious to his professional duties; nor can he delegate audit work to the accountants of the company and himself only certifying their work. There is no merit in the appeal.
16. We also consider that no leniency should be shown to a Chartered Accountant who considered that his duty was only to certify and not to audit.
Removal of his name for a period of one year is not harsh. In view of the aforesaid, the appeal is dismissed.
(emphasis supplied) 1.1 What follows is not less important for any reason. The Chartered Accountant filed petition before this Court being Special Civil Application No.10813 of 2012, which came to be heard and decided by the learned Single Judge by judgment and order dated 06.11.2012. The learned Single Judge observed as under:-
27. A Chartered Accountant has an obligation, not only statutory but also moral and social, to be absolutely and completely diligent and cautious and careful while preparing, signing and certifying Annual Accounts and/or Audit report. Several Government and private organizations and individuals rely on the report / certificate by Chartered Accountant and once a particular factual aspect or entries, etc. are prepared, signed and certified by Chartered Accountant they are ordinarily accepted without further probing or investigation. In such circumstances, the duty and obligation of being absolutely diligent, conscious and careful is multiplied manifold and a Chartered Accountant should not, and cannot take, such obligation or perform his duties lightly or casually. A mistake by a petty clerk or lower level accountant may be dealt with in different manner but a mistake by a Chartered Accountant cannot be treated with indifference or casually or lightly. A mistake by a clerk or an accountant, which may be considered or allowed or overlooked as inadvertent error, cannot be overlooked lightly or casually if committed by a practicing Chartered Accountant, more so when it is committed in Annual report duly certified by him as correct and authentic report. It has to be, and should be, dealt with seriousness which it would deserve.
The professional or trained Chartered Accountant is equipped with knowledge, training and experience to catch a mistake and if such trained and experienced professional allows so many mistakes, errors, inaccuracies and anomalies pass-by without detecting them and if he signs and authenticates report containing such mistakes, etc. and also issues certificate, then, in such circumstances, any fault cannot be found with the conclusions by the Disciplinary Committee, also confirmed by the Appellate Committee, that the petitioner did not exercise due diligence. The petitioner has tried to wish-away his failure in detecting catching and correcting the mistakes by attributing the blame to typist and computer operator.
The institute, which is statutorily obliged to maintain high standards of the profession and, for that purpose, to take action in cases which are brought to its notice wherein member of the institute is found wanting exercising due diligence and in being careful and cautions, would fail in its duty and obligation if it does not take appropriate action and/or does not pass appropriate order against such member. A lenient attitude by the institute may, in long run dilute the professional standards and tarnish its image and credibility and with passage of time may also result into deleting institutes vigil over its members and their conduct. Having regard to these aspects, the Court is not inclined to accept the petitioner's contention that the action taken by the institute is too harsh.
27.1 In present case, it is not possible to hold that punishment of removal of petitioner's name from the register for one year is harsh as compared to the proved charge. The decision as regards quantum of penalty is in the realm of the Disciplinary Authority and once misconduct is proved - and accepted as proved by the Court then Court would not interfere with Disciplinary Authority's decision regarding quantum of penalty unless it is excessively disproportionate which amounts to or appears to be on the verge of victimisation.
27.2 In this view of the matter and on overall consideration of all facts and circumstances, the petition, for the foregoing discussion and reasons, fails and does not deserve to be entertained.
28. The petitioner has failed to make out any case to entertain the petition in writ jurisdiction and interfere with two concurrent decisions preceded by prima facie opinion of the Disciplinary Committee. The petition, therefore, fails and is not accepted. Notice is discharged. However, in the facts of the case, there shall be no costs.
2. Learned Advocate Mr.Shah for the appellant vehemently argued the appeal and took this Court through every single document and at the end of reading of every single document, he repeated his argument /submission that a poor Chartered Accountant is made to suffer a very harsh punishment without there being a communication of specific charge to him and more particularly when the phraseology used for conveying the charge was changed or inter-changed at various stages.
3. The submissions of the learned Advocate for the appellant are found to be not only unacceptable but to an extent the Court has gathered a feeling that the learned Advocate is over-identifying with the matter. Be that as it may, the Court has not to comment anything upon the conduct of the learned Advocate.
3.1 In these days of falling standards of morality all around in the society, an attempt on the part of the Disciplinary Committee of the Institute of Chartered Accountants of India is noway found to be not befitting to the facts of the case. It is really painful that every attempt made to regulate the affairs, so as to see that the public confidence is not shaken, is frustrated by persons like the petitioner. Earlier it used to be that the financial reports of the company contained only figures in rupees, but then, it was thought advisable to accompany those figures with the figures of quantity. The idea was that with the help of quantum of commodity (traded or produced or manufactured), a person will be able to have a concrete idea about the financial position of the company. In the matter on hand, as it set out in communication dated 24.10.2008 (Annexure-A to the petition), in financial report of the company in a tabular form, in all nine figures are given and not one of them is found to be correct. Learned Advocate for the appellant submitted that, Sir, these figures have not made variance in terms of even one rupee and therefore, the lapse on the part of the appellant-Chartered Accountant waived. Whether the figures certified by the appellant-Chartered Accountant were right or not is not material because ultimately, these figures have not affected the figures in rupees . Despite putting a specific query to the learned Advocate for the appellant twice and despite strenuous efforts on the part of the learned Advocate for the appellant to explain the same, the Court is not able to understand as to how come a wrong figure of quantity in terms of metric ton, having difference of more than 1000 metric ton, as the figures shown was 5755.415 metric ton, whereas correct figure was 4565.858, did not make change of a single rupee. Be that as it may, whether it has made any difference in terms of rupees or not, the fact remains that the appellant did certify the figures which were found to be wrong.
3.2 The height is that the petitioner says that this had happened on account of, .......... arithmetical, typing, copying and pasting errors . As if the appellant-Chartered Accountant was not dealing with the financial figures of the company, but was dealing with pastries for distribution to the children . A plea coming from a Chartered Accountant, who has a duty under the Act to certify the financial report, that the errors were on account of arithmetical, typing, copying and pasting cannot be accepted.
4. Learned Advocate for the appellant invited attention of the Court to different parts of different documents and tried to press into service the fine distinction between the term negligence and gross negligence and difference between due diligence and gross negligence and submitted that the learned Single Judge has committed an error in passing the impugned order. Learned Advocate for the petitioner submitted that the learned Single Judge is not able to understand the difference between the two, i.e. the term due diligence and the term gross negligence .
5. There has to be a limit to which an Advocate can identify with the matter and pray for the consideration of the appeal favourably, which otherwise not required to be considered by this Court in view of the decision of the Hon ble the Apex Court in the matter of Chandra Shekhar Soni Vs. Bar Council of Rajasthan, reported in AIR 1983 SC 1012, wherein the Hon ble the Apex Court observed as under:-
In an appeal under Section 38, the Court would not, as a general rule, interfere with the concurrent finding of fact given by the Disciplinary Committee of the Bar Council of India and of the State Bar Council unless the finding is based on no evidence or it proceeds on mere conjectures and unwarranted inferences.
02.04.2013
6. Learned Advocate for the appellant submitted that so far as quantum of punishment is concerned, at the time of passing of order dated 12.09.2011, it was observed that:-
1. That vide order dated 10.02.2011, the Disciplinary Committee was of the opinion that CA. Rajesh Vasant Dudhwala was guilty of Professional Misconduct falling within the meaning of Clause (7) of Part I of the Second Schedule to Chartered Accountants Act, 1949 {as amended by the Chartered Accountants (Amendment) Act, 2006}.
6.1 Learned Advocate for the appellant also invited attention of the Court to para-5 of the said order, which reads as under:-
5. Keeping in view all the circumstances as aforesaid and material on record, the Committee is of the view that the conduct of CA. Rajesh Vasant Dudhwala does not qualify for the maximum sentence and ends of justice shall be met if not a very harsh punishment is awarded to the Respondent.
6.2 Learned Advocate for the appellant submitted that the order proceeds further to record as under:-
6. Accordingly, the punishment to be awarded to the Respondent should be removal of his name from the Register of Members for a period of 1 year.
6.3 Learned Advocate for the appellant submitted that sub-rule (3) of Rule-21A of Chapter-V titled as, Misconduct , provides as under:-
(3) Where the Board of Discipline is of the opinion that a member is guilty of a professional or other misconduct mentioned in the First Schedule, it shall afford to the member an opportunity of being heard before making any order against him and may thereafter take any one or more of the following actions, namely:-
(a) reprimand the member;
(b) remove the name of the member form the Register up to a period of three months;
(c) impost such fine as it may think fit which may extend to rupees one lakh.
6.4 Learned Advocate for the appellant submitted that instead of awarding any of the punishments mentioned hereinabove, punishment awarded is for removal of his name for a period of one year from the Register of Members.
7. The submission seems to be totally misplaced inasmuch as, punishments which are referred to are for the guilty of professional or other misconduct mentioned in First Schedule , whereas in the present case, the appellant is held guilty of professional misconduct within the meaning of Clause (7) Part-I of the Second Schedule .
8. Learned Advocate for the appellant submitted that the appellant was not afforded hearing inasmuch as, he was communicated by communication dated 18.07.2011 and he had replied to the said letter by letter dated 26.07.2011 and had requested for an adjournment on account of statutory closure on 31.07.2011. But, his request was not granted. Not only that, he was not communicated about rejection of his request and the order of punishment was passed on 12.09.2011.
9. This aspect finds reference in paras-2 and 3 of the order. The said paras-2 and 3 read as under:-
2. That an action under Section 21B(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against CA Rajesh Vasant Dudhwala and, therefore, communications dated 30.05.2011 and 18.07.2011 were addressed to him thereby granting him an opportunity of being heard in person as also to make written representation.
3. That CA Rajesh Vasant Dudhwala sent a letter dated 26.07.2011 wherein he has requested for deferment of this hearing on account of his engagement in Tax returns and audit assignments.
9.1 The Court is of the opinion that when communication was to the effect that either he can make his presentation in person or he can make his written representation, nothing prevented the petitioner from making a written representation and the request for adjournment on the ground that there is statutory closure on 31.07.2011 was not so peculiar which required to be given priority over the hearing of the matter before the Authority. The Court is therefore of the opinion that there is no injustice done to the petitioner because ultimately the Committee passed order after perusing the facts of the case and on the basis of all relevant record which was available with the Committee.
10. Learned Advocate for the appellant relied upon a decision of the Hon ble the Apex Court in the matter of In Re: An Advocate, reported in AIR 1989 SC 245. Learned Advocate invited attention of the Court to the opening para of the judgment, which reads as under:-
A host of questions of seminal significance, not only for the Advocate who has been suspended from practicing his profession for 3 years on the charge of having withdrawn a suit (as settled) without the instructions from his client, but also for the members of the legal profession in general have arisen in this appeal (Appeal under section 38 of the Advocates' Act, 1961) :-
(1) Whether a charge apprising him specifically of the precise nature and character of the professional misconduct ascribed to him needs to be framed.
(2) Whether in the absence of an allegation or finding of dishonesty or mens rea a finding of guilt and a punishment of this nature can be inflicted on him?
(3) Whether the allegations and the finding of guilt require to be proved beyond reasonable doubt?
(4) Whether the doctrine of benefit of doubt applies?
(5) Whether an Advocate acting bona fide and in good faith on the basis of oral instructions given by some one purporting to act on behalf of his client, would be guilty of professional misconduct or of an unwise or imprudent act, or negligence simpliciter, or culpable negligence punishable as professional misconduct?
10.1 Learned Advocate for the appellant invited attention of the Court to the relevant discussion in para-3 of the said judgment. Para-3 reads as under:-
3. At this juncture it is appropriate to articulate some basic principles which must inform the disciplinary proceedings against members of the legal profession in proceedings under Section 35 of the Advocates Act, read with the relevant Rules:
i) essentially the proceedings are quasi criminal in character inasmuch as a Member of the profession can be visited with penal consequences which affect his right to practice the profession as also his honour; under Section 35(3)(d) of the Act, the name of the Advocate found guilty of professional or other misconduct can be removed from the State Roll of Advocates. T his extreme penalty is equivalent of death penalty which is in vogue in criminal jurisprudence.
The Advocate on whom the penalty of his name being removed from the roll of Advocates is imposed would be deprived of practicing the profession of his choice, would be robbed of his means of livelihood, would be stripped of the name and honour earned by him in the past and is liable to become a social apartheid. A disciplinary proceeding by a statutory body of the Members of the profession which is statutorily empowered to impose a punishment including a punishment of such immense proportions is quasi-criminal in character:
(emphasis supplied) 10.2 Learned Advocate for the appellant submitted that in the present case also, when the name of the appellant is ordered to be removed for a period of one year, it is nothing but imposing death penalty to the appellant and therefore, the Court should consider question of quashing and setting aside the order.
11. The submission of the learned Advocate for the appellant cannot be accepted for the simple reason that as discussed hereinabove, there is an overall fall in moral standards in the society. In such situation, when the Council of Professionals is trying to implement discipline and as stated hereinabove, there are concurrent findings recorded by three different Authorities, including the Committed headed by a Retired High Court Judge, this Court is of the opinion that no interference is warranted at the hands of this Court on the ground that the punishment is too harsh.
12. Learned Advocate for the appellant also relied upon a decision of the Hon ble the Apex Court in the matter of V.P.Kumaravelu Vs. The Bar Council of India, New Delhi & Ors., reported in AIR 1997 SCA 1014. Learned Advocate for the appellant invited attention of the Court to paras-12, 13 and 14. The same are reproduced for ready perusal:-
12.
Looking to all the circumstances the appellant was negligent as he had failed to attend to the two cases. His client had to suffer ex parte decrees. There is, however, no finding of any mala fides on the part of the appellant or any deliberate inaction on his part in not attending to the two cases. Will his negligence or "constructive negligence" as the respondent-Bar Council puts it, amount to professional misconduct? Whether negligence will amount to professional misconduct or not will depend upon the facts of each case. Gross negligence in the discharge of duties partakes of shades of delinquency and would undoubtedly amount to professional misconduct. Similarly, conduct which amounts to dereliction of duty by an advocate towards his client or towards his case would amount to professional misconduct. But negligence without moral turpitude or delinquency may not amount to professional misconduct.
13. In the case of in re a vakil (1926) ILR 49 Mad 523 : (AIR 1926 Madras
568), Coutts Trotter, C. J., said, "negligence by itself is not professional misconduct; into that offence there must enter the element of moral delinquency. Of that there is no suggestion here, and we are, therefore, able to say that there is no case to investigate, and that no reflection adverse to his professional honour rests upon Mr. M." In the case of P. D. Khandekar v. Bar Council of Mahrashtra, AIR 1984 SC 110 at 113, this Court said, "There is a world of difference between the giving of improper legal advice and the giving of wrong legal advice. Mere negligence unaccompanied by any moral delinquency on the part of a legal practitioner in the exercise of his profession does not amount to professional misconduct. .... For an advocate to act towards his client otherwise than with utmost good faith is unprofessional. When an advocate is entrusted with a brief he is expected to follow norms of professional ethics and try to protect interests of his client in relation to whom he occupies a position of trust. Counsel's paramount duty is to the client. When a person consults a lawyer for his advice he relies upon his requisite experience, skill and knowledge as a lawyer and the lawyer is expected to give proper and dispassionate legal advice to the client for the protection of his interest."
14. In the present case, there is failure on the part of the appellant to discharge his duties towards his client. This failure, however, is not deliberate. It is on account of heavy pressure of work coupled with lack of diligence on the part of his staff as well as on the part of his client in not sending a responsible person with papers to the office of the Government Pleader. However, while the appellant cannot be held responsible for his client's failure to attend the office, the appellant cannot shift the blame entirely on his staff. As the head of the office it was his responsibility to make sure that the work is properly attended to and the staff performs its functions properly and diligently. The appellant has, therefore, rightly been held guilty of negligence. However, in the absence of any moral turpitude or delinquency on his part, we cannot sustain the finding of the Bar Council of India that his conduct in the facts and circumstances of this case amounts to professional misconduct. In fact the various mitigating circumstances have been noted by the Bar Council of India itself. The negligence on the part of the appellant in these circumstances cannot be construed as professional misconduct.
13. On careful consideration of the facts of the case on hand and the facts of the case which fell for consideration of the Hon ble the Apex Court, this Court is of the opinion that the ratio of that case is not applicable to the facts of the present case. A certificate issued by a Chartered Accountant is for the purpose of being believed by the public at large and therefore, the party aggrieved by the said act of the Chartered Accountant is in rem . The extent of breach of trust being committed on account of false certificate is infinite, whereas bye and large, in the matter of an Advocate, being guilty of misconduct, it is likely to damage only one single person or a group of persons with whom the Advocate had an occasion to deal. For the reasons set out hereinabove, this Court is of the opinion that the aforesaid decision has no application to the facts of the present case.
14. Learned Advocate for the appellant next relied upon a decision of Division Bench of this Court (Coram: Hon ble Mr.Justice A.R.Dave & Hon ble Mr.Justice K.A.Puj, as they were then) in Chartered Accountant Reference No.1 of 2000 dated 29.11.2003. Learned Advocate for the appellant invited attention of the Court to para-2 of the said judgment and order. Para-2 reads as under:-
2. The charge levelled against the respondent in respect of the alleged misconduct reads as under:-
The Respondent had issued a false certificate, certifying existence of assets created by M/s.Mehta Plywood Pvt. Ltd., on the basis of which Rajasthan Financial Corporation, Pali released a sum of Rs.4.65 lakhs to the said Company. The respondent, it was alleged, had certified that the Company had invested Rs.5,04,421/- whereas on inspection by officers of the Corporation, it was found that the investment by the Company was only to the extent of Rs.58,169/-
14.1 Learned Advocate for the appellant then invited attention of the Court to the operative part of the order, i.e. para-22, which reads as under:-
22. We accordingly uphold the findings of the Disciplinary Committee and hold that the respondent is guilty of the misconduct and direct the respondent s name be removed from the Register of members of the Institute for a period of six months. The Reference stands disposed of accordingly with no order as to costs.
14.2 Learned Advocate for the appellant submitted that in a gross case like the one which was under consideration of the Division Bench of this Court, the Court was pleased to impose punishment of removal of name of the Chartered Accountant only for a period six months, whereas in the present case, removal of the name of the appellant-Chartered Accountant is for one year.
15. On careful consideration of the facts of the case on hand, this Court is of the opinion that the discretion exercised by the Council to impose discipline, more particularly in light of the falling standards of discipline, quantum of punishment is not such which will shock the conscious of this Court and hence, the aforesaid judgment does not help the appellant.
16. Learned Advocate for the appellant also relied upon a decision of the Delhi High Court in the matter of Council of the Institute of Chartered Accountants of India Vs. Ajay Kumar Gupta, reported in [2012] 171 Comp. Cas 441 (Delhi). In this judgment also, the punishment awarded was to remove the name for a period of six months. Learned Advocate for the appellant submitted that a similar view, if could be taken and if the punishment could be reduced to remove the name for a period of six months.
17. As discussed hereinabove and as set out hereinabove, this Court is of the opinion that no interference is warranted in the matter of quantum of punishment, more particularly when there are concurrent findings recorded by more than one authorities, including the one headed by a Retired High Court Judge.
18. Learned Senior Advocate Mr.Soparkar for the respondent the Disciplinary Committee invited attention of the Court to certain glaring facts which are incorporated in various documents, to start with, in the report of the Disciplinary Committee constituted under Section 21B of the Chartered Accountants Act, 1949{as amended by the Chartered Accountants {amendment} Act, 2006}, he invited attention of the Court to paras-8, 9, 10, 11 and 12 of the said report, which are reproduced for ready perusal:-
8. At the time of meeting, the Respondent remained present along with his Counsel. The Respondent was administered oath. The Committee explained the charges to the Respondent. Thereafter, the attention of the Respondent was drawn to the Rule 18(7). To the same, the Respondent pleaded not guilty and opted to defend his case.
9. During the course of of hearing, the Respondent has admitted the fact of mistakes in the quantitative details of raw-materials consumed, production and sales of the Company which were attributed to the mistakes on the part of the accountant in cutting and pasting. With regard to the elimination of inter division transfers from the sales and purchases in the financial statements, the Respondent admitted that he should have eliminated the inter division transfers from the financial statements. He has further admitted that the non elimination of the inter division transfers does not give true and fair view of the financial statements.
10. The Committee had also pointed out the discrepancy between the stated accounting policy of the Company and the actual implementation of the same in the presentation of financial statements, viz. as per the accounting policy on sales, it reads as under:
the sales are accounted exclusive of excise duty and other taxes and exclude inter divisional transfers (point NO.F of Schedule 19 to Balance Sheet as at 31.3.06).
11. However in furnishing the details of sales of finished goods in Notes on Accounts, the sales were shown as including inter branch/divisional transfers. For this the Respondent admitted that it is a mistake on his part and the said presentation did not give a true and fair view of the financial statements.
12. Finally, the Respondent while admitting the mistakes and lapses on his part, prayed that the same does not constitute gross negligence and it can be at best be attributed as work carried out without due diligence .
18.1 Learned Senior Advocate for the respondent also invited attention of the Court to para-18, which is also relied upon by the learned Advocate for the petitioner. It is observed in that para that:-
18. ..... The Committee also noted that irrespective of the fact that there is no loss to the Government or anybody due to the above mistakes, the mistakes are very serious resulting in affecting the true and fair view of the financial statements..... .
18.1 Learned Advocate for the appellant wanted to say that it is specifically noted by the authorities that, there was no financial loss either to the Government or anybody due to mistake committed by the appellant-Chartered Accountant . Learned Senior Advocate for the respondent submitted that what is important is that the Authority has recorded that mistakes are very serious because it resulted in affecting true and fair view of the financial statements. (emphasis supplied).
18.2 Learned Senior Advocate for the respondent also invited attention of the Court to the judgment passed by the Appellate Authority, which consisted of a Retired High Court Judge as Chair Person and three members, wherein the Authority has recorded in paras-8 and 9 as under:-
8. Despite this declared policy of the company, the inter divisional transfers were shown as sales of finished goods in the Tax Audit Report, certified by the appellant.
The appellant s contention is that this was merely a mistake later on explained to the Excise Department and there was no revenue loss.
9. The issue actually is not whether there was a revenue loss to the department or not. The issue under consideration before Disciplinary Committee was whether the appellant was negligent in performing his professional duty/obligation. The negligence is here writ large in view of the fact that the audit report certified by the appellant was contrary to the declared accounting policy of the company.
(emphasis supplied) 18.3 Learned Senior Advocate for the appellant submitted that in para-10, the Appellate Authority has enlisted errors and the explanation of the appellant. It will be in fitness of things if the said table is reproduced for ready perusal:-
5.3 Further, the said discrepancies were basically in the nature of typing error of a computer operator. A table showing the reason for mistake for each item is given below:-
Raw material consumption Production Sales Annual Report for FY 2005-06 Difference in the method of working Total mistake of accountant Inter branch transfer were included in the sales figures Annual Report for FY 2006-07 Difference in the method of working Oversight and typing error (instead of consumption figure, purchase figure was considered) Inter branch transfer were included in the sales figures Tax Audit Report for FY 2006-07 Typing error.
Typing error Typing error 18.4 Learned Senior Advocate for the appellant also invited attention of the Court to para-11 of the order of the Appellate Authority, which reads as under:-
11. We have considered these explanations and found that the same were absolutely devoid of merit. The question of typographical error did not arise as the appellant in his reply has sought to explain the wrong figures. In fact, the figures or consumption of raw material, the production and sales, all were wrongly stated in the audit report.
These wrong figures were explained by the appellant as mere typographical error. In fact the appellant during proceedings before Disciplinary Committee admitted that there were lapses on his part and he should have been careful . He also admitted that despite declared accounting policy of sales being exclusive of inter department transfer, tax audit report certified by him included inter department transfer as sales and did not give true and fair view of financial statements.
(emphasis supplied) 18.5 Last but not the least, learned Senior Advocate for the respondent invited attention of the Court to the fact that the Appellate Authority relied upon a decision of this Court in the matter of Council of Institute of Chartered Accountants Vs. Mukesh R.Shah, reported in AIR 2004 Guj. 164. Paras-20 and 21 of the said decision are quoted by the Appellate Authority in its order.
18.6 Learned Senior Advocate for the respondent lastly invited attention of the Court to para-27 of the judgment and order of the learned Single Judge, which is already quoted hereinabove. The submissions made by the learned Senior Advocate for the respondent are found worth accepting.
19. On careful consideration of the matter, this Court is of the opinion that no interference is warranted in the order passed by the learned Single Judge. In the result, the appeal fails and the same is dismissed.
(Ravi R.Tripathi, J.) (R.D.Kothari, J.) *Shitole Page 28 of 28