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If, this false certificate was not issued by this petitioner, prima facie, M/s. Indu Projects Private Limited (A-4) ought not have grabbed the work and some other eligible bidder would have secured the work. Therefore, it is evident from the material that, this petitioner issued a certificate certifying the work executed by M/s. Indu Projects Private Limited (A-4) at inflated rate without verifying any material. But, based on the letter addressed by M/s. Indu Projects Private Limited (A-4), issue of such certificate clearly indicates that this petitioner has accommodated M/s. Indu Projects Private Limited (A-4) to grab the work based on such false certificate prima facie.

This decision deals with the duties of the Chartered Accountant towards Income Tax Department. But this judgment though referred in the later judgment of this Court in Indian Institute of Chartered Accountants Vs. Mukesh Gong and Company8 held that issue of false certificate to the public while inviting investments amounts to serious misconduct.

The petitioner is a Chartered Accountant and the Government is a third party and the auditor's legal liability to the third parties is also relevant at this stage. When a professional man, in the course of his practice, causes harm to someone, other than the person who has engaged his services, the extent of his legal liability to the injured party is not always clear. This is so even when the petitioner is a member of one of the older professions, since most of the decided cases have involved injuries to clients rather than to the third parties. The lack of precedent is even more pronounced in the case of public accountants, whose status as a major professional group is relatively new. Moreover, 2016 (6) ALT 606 MSM,J CrlP_5929_2016 the utility of few decisions that do exist in this field is limited, as a basis for prediction, by the probability that each new case which arises will be distinguishable on its facts from all the cases that have gone before. Nevertheless, the best way to gain an understanding of the present state of common law on accountants' liabilities to the third parties is to study the cases involving this problem, with brief excursions into related cases involved in member of other professions. Moreover, it has been said with reference to the decision on accountants' liability that "...an intimate knowledge of facts and the law of these cases and their possible implications will do more than anything else to develop a technique of imaginative thinking and alertness in our work and awareness of the importance of complying with our own standards". When a tort of fraud involves, false representations, wilfully or recklessly made for the purpose of tricking or leading another on to his damage, several ailments must be present. First, there must be false representation. Silence where there is a duty to speak is considered equivalent to a false representation. Second, the person maintaining the representation must know or believe that it is false, or be in conscious ignorance of its truth and must make it with an intent to deceive. Finally, the third party i.e. Customs department must have relied on the representation and must have suffered injury thereby. The tort of negligence may be defined as failure to use that degree of care which a person of ordinary carefulness would use under the circumstances. Among the "circumstance", of course, would be the petitioner's status as a member of a skilled profession. For example, the making of a false representation with honest belief in its truth, but with lack of reasonable care in ascertaining the facts or in the manner of expressing the conclusion, would constitute negligence. In view of MSM,J CrlP_5929_2016 the constant development of auditing standards and techniques and the inevitable factual differences from case to case, the meaning of "reasonable care" in the field of auditing cannot be definite or fixed.

In one of the cases decided by Delhi High Court reported in Council of The Institute of Chartered Accountants of India Vs. Dayal Sing F.C.A. and others11, the Division Bench of the High Court held that issuance of false certificate of having got the required contribution for availing term loan from the bank account of others amounts to misconduct under the Act. Punishment of removal from rolls was affirmed by the Division Bench of the High AIR 2007 Delhi 263 MSM,J CrlP_5929_2016 Court of Delhi. In another judgment in Before the Securities and Exchange Board of India, Mumbai12 , the learned Single Judge adverted to the judgment of this Court in ICAI Vs. Mukesh Gong, wherein this Court observed as under:

The Apex Court in Bishandas Vs. State of Punjab and another18 held that the appellant being Sarpanch was legally bound to issue certificate containing correct information. However, he intentionally issued false certificate containing false information which would constitute an offence punishable under Section 177 IPC. But, there is no evidence to show that issuance of false certificate by the appellant with a dishonest intention to make wrongful gain for himself. Therefore, the ingredients for the offence punishable under Section 420 IPC are not proved and the conviction under Section 420 IPC was set aside.