Case Law Details
Trideep Raj Bhandari Vs ICAI (Delhi High Court)
Conclusion: ICAI was under an obligation to provide reasons to the complainant for its prima facie conclusion of the Chartered Accountant being member not guilty of any misconduct on the complaint made by a Complainant.
Held: Assessee had invested in the shares of a company named First Leasing Company of India Limited. RBI observed that an inspection of the Company had revealed that the company had been falsifying its books of accounts and other financial statements over several years, thereby portraying a positive net worth. RBI issued a Press Release inter-alia prohibiting the Company from selling, transferring, creating charge or mortgaging or dealing in any manner with its property and assets without prior written permission of the RBI. Assessee filed a complaint with the Institute of Chartered Accountants of India against the Internal Auditors of the Company and a complaint against the Statutory Auditors of the Company. Later on, after undertaking the investigation the Institute of Chartered Accountant of India (ICAI) closed the complaint against the Internal Auditor. Assessee filed a grievance that no reasons were stated by the Institute of Chartered Accountant of India (ICAI) for closing the complaint. ICAI contended that proceedings before the Disciplinary Committee and the Board of Discipline under the Act were principally between the Institute and its Members; the same could not be viewed as a private dispute between the complainant and the Chartered Accountant and therefore, reasons for closing the complaint need not be conveyed to the complainant. It was held that where the inquiry was initiated on a complaint filed under Rule 3 of the Rules, the Complainant was entitled to receive a copy of the order closing such inquiry against the member. „Order‟ would necessarily include the reasons for the same. The Rules having themselves created this right in favour of the Complainant, it could not be accepted that the Complainant would only be supplied with the “Information” of the closure of the complaint. ICAI was under an obligation to provide reasons to the complainant for its prima facie conclusion of the member being not guilty of any misconduct on the complaint made by a Complainant. At the same time, it was clarified that such reasons need not be elaborate and would not widen the scope of interference of the Courts while exercising powers of judicial review. Accordingly, ICAI was directed to communicate the reasons for its decision within a period of two weeks of receipt of this order.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. This petition has been filed inter-alia praying for the following reliefs:
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