Case Law Details
Joshi John Vs Institute of Chartered Accountants of India (Kerala High Court)
It is not disputed that ‘M/s. R. Menon and Associates’ is a partnership at will. Section 43 of the Indian Partnership Act, 1932 provides that when a partnership is ‘at will’, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. The Firm is dissolved as from the date mentioned in the notice and if no date is so mentioned, as from the date of communication of the notice. Ext.P4 is the dissolution notice sent by the petitioner and the date of dissolution mentioned therein is 20.12.2019. Therefore, as per Section 43 of the Indian Partnership Act, the Firm ‘M/s. R. Menon and Associates’ should ordinarily be treated as dissolved from that date.
It has to be noticed that the Chartered Accountants Act does not empower the Council to adjudicate inter se dispute between members of the Institute or disputes between partner-members of a Firm, unless those disputes fall within the ambit of Chapter V of the Act, 1949. Though the decision of the Council to evolve a mechanism of Alternate Dispute Resolution (ADR) to resolve inter se disputes between their members/Firms is laudable, availability of such ADR mechanism cannot be a reason not to record the current status of a Chartered Accountant in a Firm, in the registers maintained under Regulation 190.
Non-recording of such retirement in the Registers, will have serious adverse consequences on a Chartered Accountant. It can be seen from the facts of this case, in spite of retirement from ‘M/s. R. Kumar and Associates’, the petitioner is shown as the Chartered Accountant having charge of the said Firm. The petitioner has now started a proprietary firm ‘Joshi John & Co.’, of which also he is in charge. As per Section 27 of the Act, 1949 where a Chartered Accountant has more than one office in India, each one of such offices shall be in the separate charge of a member. Due to the partnership dispute, the petitioner is forced to violate Section 27 of the Act, 1949.
The forcible continuance of the petitioner, as a partner of a Firm which is loaded with partnership disputes, has civil consequences also on the petitioner. As per the general decisions taken by the Council, the Council will not only record in their registers that the partnership is under dispute, but will communicate the said fact C & A.G. and Reserve Bank of India, while furnishing the particulars of a Firm for empanelment of Bank/C&AG audits. Such recording and communication will indeed affect the chances of the petitioner to get audit assignments.
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Author Bio
Good decision by the keral high court