Supreme Court - Daily Orders
S. Sukumar vs The Secretary, Institute Of Chartered ... on 23 July, 2019
Bench: Uday Umesh Lalit, Vineet Saran
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ITEM NO.3 COURT NO.8 SECTION IV-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
M.A.No(s).2913/2018 in Civil Appeal No.2422/2018
S. SUKUMAR Petitioner(s)
VERSUS
THE SECRETARY, INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA & ORS. Respondent(s)
(MR. ARVIND KUMAR SHARMA, ADVOCATE ON BEHALF OF UNION OF INDIA. )
Date : 23-07-2019 This petition was called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE UDAY UMESH LALIT
HON'BLE MR. JUSTICE VINEET SARAN
For Petitioner(s) By Courts Motion, AOR
Mr. Prashant Bhushan, AOR
Ms. Neha Rathi, Adv.
For Respondent(s) Mr. Vikramjit Banerjee, ASG
Ms. Nisha Bagchi, Adv.
Ms. Aakanksha Kaul,Adv.
Mr. Ramji Srinivasan, Sr. Adv.
Mr. Rana Mukherjee, Sr. adv.
Ms. Sylona Mohapatra, Adv.
Mr. Pramod Dayal, AOR
Signature Not Verified
Mr. Nikunj Dayal, adv.
Ms. Payal Dayal, Adv.
Digitally signed by
INDU MARWAH
Date: 2019.07.25
17:49:39 IST
Reason:
Ms. Ruby Singh Ahuja, Adv.
Mr. Vishal Gehrana, Adv.
Mr. Utkarsh Maria, Adv.
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M/S. Karanjawala & Co., AOR
Mr. Kamal Shankar,Adv.
Mr. Atul Menon, Adv.
Mr. Aakash Deep Singh Roda, Adv.
Ms. Priyank Ladoia, Adv.
Mr. Aman Sharma, Adv.
Ms. Arti Singh, AOR
Mr. Mayank Pandey, AOR(R-5)
Mr. Abhay Kumar, AOR
UPON hearing the counsel the Court made the following
O R D E R
In its judgment dated 23.2.2018, this Court had issued following directions:
“53. (i)The Union of India may constitute a three member Committee of experts to look into the question whether to what extent the statutory framework to enforce the letter and spirit of Sections 25 and 29 of the CA Act and the statutory Code of Conduct for the Cas requires revisit so as to appropriately discipline and regulate MAFs. The Committee may also consider the need for an appropriate legislation on the pattern of Sarbanes Oxlay Act, 2002 and Dodd Frank Wall Street Reform and Consumer Protection Act, 2010 in US or any other appropriate mechanism for oversight of profession of the auditors. Question whether on account of conflict of interest of auditors with consultants, the auditors’ profession may need an exclusive oversight body may be examined. The Committee may examine the Study Group and the Expert Group Reports referred to above, apart from any other material. It may also consider steps for effective enforcement of the provisions of the FDI policy and the FEMA Regulations referred to above. It may identify the remedial measures which may then be considered by appropriate authorities. The Committee may call for suggestions from all concerned. Such Committee may be constituted within two months. Report of the Committee may be submitted within three months thereafter. The UOI may take further action after due consideration of such report.
(ii) The ED may complete the pending investigation 3 within three months.
(iii) ICAI may further examine all the related issues at appropriate level as far as possible within three months and take such further steps as may be considered necessary.” Pursuant thereto, a Committee of Experts was constituted by the Ministry of Corporate Affairs, Government of India, which has since then finalized the Report on October 25, 2018 and said Report has been placed on record. Copies of the Report were thereafter directed to be given to Institute of Chartered Accountants of India (ICAI) and Enforcement Directorate who were called upon to file their response.
The Response has also been filed on behalf of the original- petitioner by Prashant Bhushan, learned advocate. It was submitted by Mr. Bhushan that the fulcrum of the judgment and the important observations in paragraphs 45 to 48 were not duly considered by the Committee. He further submitted that except for the suggestion that there ought to be an independent Over-Sight body other than body consisting of professionals, rest of the suggestions made by the Committee were not quite correct. We are not pronouncing on the submissions so raised by Mr. Bhushan at this stage. The ICAI has also filed its response. The response adverts to para 48 of the judgment in which it was stated that after due examination by the Enforcement Directorate, further examination could be undertaken by ICAI and also by the Central Government. It must be stated that apart from para 48 directions were also issued in para 50 of the judgment and the ICAI was directed to look 4 into those issues referred to in the judgment and more particularly in para 50 onwards.
Ms Bagchi, learned Advocate appearing for Union of India submitted that the responses so filed by Mr. Bhushan and the ICAI are presently being considered by the Expert Committee constituted by the Ministry of Corporate Affairs and appropriate response shall be filed in this Court within three weeks from today.
In sofar as direction No.2 is concerned, the Enforcement Directorate was to complete pending investigation within three months from the date of the judgment.
It appears that the investigation has since then been completed and as stated by Ms. Bagchi, show cause notices have been issued to nine entities. As the investigation is complete, we direct the Ministry of Corporate Affairs, Government of India to place all the relevant documents and material for perusal of this Court before the next date of hearing. Let the record in that behalf be filed in the Registry of this Court in a sealed cover.
List for further consideration on 20.8.2019.
(INDU MARWAH) (SUMAN JAIN) COURT MASTER BRANCH OFFICER