Case Law Details

Case Name : Aakansha Vaid Vs ICSI (Appellate Authority of ICSI)
Appeal Number : Appeal No. 12/ICSI/2019
Date of Judgement/Order : 18/02/2020
Related Assessment Year :
Courts : Appellate Authority (14)

Aakansha Vaid Vs ICSI (Appellate Authority of ICSI)

he Authority records its displeasure about the conduct of the Complainant during the entire proceedings. The Complainant lodged a comprehensive Complaint supported with several documents before the Institute on 3rd August 2017. He sent letter dated 1st September 2017 providing certain information sought by the Institute. However, subsequent to that, he did not communicate with the Institute. He settled the dispute with the Appellant of his own without seeking any permission from the Institute Respondent No.1; he did not even bother to intimate the Institute about the alleged settlement. The Complainant having settled the dispute on 15.12.2017 did not withdraw the Complaint; he did not opt to appear before the Institute during proceedings. There was no occasion for the Complainant to handover the withdrawal letter to the Appellant. It resulted in the passing of the impugned Order whereby in ex-parte proceedings, the Appellant was held ‘Guilty’ and was punished. The Complainant, at first instance did not appear before this Authority despite service of notice. When compelled to put appearance vide order dated 04.10.2019, the Complainant has taken inconsistent pleas about the settlement. He did not disclose the terms and conditions of the settlement. This has caused immense wastage of time of the Authority. The action of the Complainant to settle the dispute without informing the Institute and to use the forum to recover his alleged ‘dues’ only is a serious matter and should be looked into by the Institute/BOD. From the contents of letter dated 18.04.2017 sent to the Appellant by the complainant, it can be inferred that the Complainant was interested in the recovery of his ‘dues’ only.

In the light of above discussion, we set aside the impugned Order dated 12th August, 2019 and remit the matter to the Board of Discipline with direction to decide it by a reasoned order in the light of observations made above. The Board of Discipline will dispose of this matter on merits after giving reasonable opportunity to parties to produce their evidence, within six (6) months from the date of receipt of this order.

FULL TEXT OF ORDER OF APPELLATE AUTHORITY

1. The matter was reserved for orders on 22nd January, 2020.

2. Vide e-mail dated 10th February,2020, the parties were informed regarding the date of pronouncement of the order.

3. The order pronounced by separate order.

4. A copy of the order be given to the parties.

1. Aakansha Vaid, the Appellant has preferred the instant appeal to challenge the legality and validity of Order dated 12th August 2019 issued by Board of Discipline (hereinafter referred to as “BOD”). After finding the Appellant guilty of Professional Misconduct under item (8) of Part-I of the First Schedule of the Company Secretaries Act 1980 (hereinafter referred to as “the Act”), the Appellant was ordered to pay fine of Rs.25, 000/-(Rupees Twenty Five Thousand Only); her name was removed from the Register of Members of the Institute of Company Secretaries of India (ICSI) for a period of 30 days.

2. Briefly, the facts of the case are as under:-

2.1 The Appellant is a Practicing Company Secretary having Membership Number A33013 and Certificate of Practice Number 12244 of ICSI at Raipur (Chhattisgarh). On 3rd August, 2017, the Respondent No. 1 (hereinafter referred to as “the Institute”) received a Complainant in Form-I filed by one Parveen Kumar Kanungo (hereinafter referred to as “the complainant”) u/s 21 of the Company Secretaries Act. The Complainant alleged that the Appellant had certified and filed Forms pertaining to Annual filings of three companies i.e., M/s MAA Banjari Ispat Pvt. Ltd.; M/s Pawanputra Ispat Pvt. Ltd.; and M/s Harsh Vinimay Pvt. Ltd for the Financial Year 2015-16 without first communicating with the Complainant as he had certified and filed the Forms for Annual filing for the said companies for the previous Financial Year 2014­15. The Complainant further averred that even after his objection, the Appellant continued to do the assignments. The said companies have not paid him his ‘dues’ towards services rendered by him.

2.2 On receipt of the Complaint, the Appellant was advised vide letter dated 21st September, 2017 and subsequent reminders dated 7th November, 2017 and 22nd January, 2018 to file written statement. The Appellant did not file the written statement.

2.3 Having considered the Complaint and the material on record, vide Order dated 3rd August, 2018, Director (Discipline) formed a Prima-Facie Opinion (PFO) that the Appellant was ‘guilty’ of Professional Misconduct under Item (8) of Part-I of the First Schedule of the Act. Vide order dated 1st September, 2018, the BOD decided to proceed further in the matter in accordance with Rule 14 of the Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

2.4 Despite issuance of letters/notices, neither the Complainant nor the Appellant put appearance before the BOD. The impugned Order dated 20th May, 2019 was passed by BOD holding the Appellant ‘guilty’. To afford her an opportunity of being heard, the Appellant was directed to appear on 22.06.2019. The Appellant did not appear and was proceeded ex-parte. It led to the passing of the Order dated 12th August, 2019, which is under challenge before us.

3. When the appeal was taken up for hearing on 20.09.2019, neither the Complainant not the Appellant appeared before the Authority. Last opportunity was given to both the parties to ensure their appearance before this Authority either in person or through an advocate or authorized representative. Subsequently, appearance was put on behalf of the Complainant and the Appellant by their lawyers/authorized representatives.

4. We have heard the Learned Counsel for the parties and have examined the record.

5. Admitted position is that the Appellant was working as Practicing Company Secretary at Raipur. She had done the certification work for M/s Maa Banjari Ispat Pvt. Ltd., Pawanputra Ispat Pvt. Ltd.; and Harsh Vinimay Pvt. Ltd for the Year 2015-16. The Complainant Parveen Kumar Kanungo, Company Secretary in Practice at Raipur had done certification of Forms MGT-7 and MGT-8 of these companies for the Financial Year 2014-15. Grievance of the Complainant was that the certification was done by the Appellant without any prior communication with him. The Appellant continued to do the certification despite letters written by him to her and she did not respond to his e-mails. The companies had not paid him his dues towards his services.

6. During the course of arguments, we were informed that Appellant’s name stood deleted from the Register of Members for one month. We were further informed that the matter has been settled between the parties. The Learned Counsel for the Complainant was asked as to what amount has been received by the Complainant towards his ‘dues’ from the said companies. After having conversation with the Complainant, the Learned Counsel informed that  Rs.40,000/- (Rupees Forty Thousand Only) have been received by the Complainant in cash in August, 2019.

7. Learned Counsel for the Appellant urged that the matter was settled with the Complainant and he had given a withdrawal letter dated 15.12.2017. The said withdrawal letter, however, could not be produced before BOD. Similar is the plea of the Learned Counsel for the claimant. The claimant does not want to pursue the Complainant lodged by him against the Appellant as the matter stood settled.

8. In the grounds of appeal, the Appellant has averred that before undertaking the certification work for the Financial Year 2015-16 of these companies, she had enquired from Dilip Aggarwal and Dilip Kumar Bansal, Directors about the existing Practice Company Secretary who was carrying out the certification work. When she came to know that the Complainant (Parveen Kumar Kanungo) was doing the work earlier for the companies, she after collecting his address sent a letter seeking NOC to carry out the certification work. She did not get any confirmation or objection from the Complainant and after waiting for 30 days, as per the procedure laid down by ICSI, she started the certification work.

9. On 18th April, 2017, she got a letter from the Complainant for Professional Misconduct relating to her certification. She could not respond as she had given birth to a baby and was having post-delivery issues. She made a call to the Complainant asking some time to meet him to resolve the issues including intimating about her sending the NOC letter. The Complainant filed the Complaint on 3rd August 2017. It is averred that, thereafter, she personally visited the Complainant. Only at that time, he informed about his professional ‘dues’ towards these companies. She assured the Complainant of clearing of his entire outstanding ‘dues’. Due to her efforts, the Complainant got his entire outstanding dues from the said companies and on the date of impugned Order, there was no fee outstanding. She further averred that the Complainant volunteered to withdraw the Complainant filed with the Institute due to mis-communication. However, he, for one or the other reason, could not intimate the facts to the Disciplinary Authority.

10. The Complainant, in response, on dated 01.02.2019, informed the Authority that in view of settlement reached between him and the Appellant, he had given a withdrawal letter dated 15.12.2017 and had stated that he did not wish to pursue the matter any further. He had given the letter to her with intent that she would present it before ICSI to obtain necessary relief. The Complainant requested the Authority to extend every possible relief to her in view of settlement and to meet the ends of justice.

11. By an order dated 21.11.2019, the Authority directed the Complainant to file a detailed affidavit. The Complainant has filed the affidavit dated 4th December 2019. In this affidavit, he has disclosed that the Appellant was known to her before as she used to seek professional advice and assistance from him through e-mails and phone. When he discovered that the Appellant had done certification work for the companies on 06.11.2016, he contacted the Appellant but she did not pick-up his call. Again, she was informed by e-mail dated 21.11.2016. She was further informed that his fee and challan disbursement against the clients were due. The Appellant did not send any response. Again, after a few days, he called but did not elicit any response from her. Since the Appellant did not give any response, he sent her a mail dated 18th April, 2017. Again, there was no response to it. On 26.04.2017, he received a letter from Harsh Vinimay Pvt. Ltd. leveling frivolous allegations against him of keeping their documents, registers, records etc. in his possession. On that, he decided to lodge the Complaint.

12. The Appellant further stated that on 15.12.2017, the Appellant visited him and tendered oral apology and agreed to her mistake. She then insisted that he should withdraw the Complaint. He then gave her a withdrawal letter attached to a letter addressed to her for presenting to the Institute. He also stated it clearly to her that he had no more interest in pursuing the matter as it had brought him mental and financial stress. He had not received a single penny at the time of issuing the withdrawal letter. The Appellant did not communicate with him thereafter and he, too, did not pursue the matter.

13. On perusal of the averments of the appeal and the contents of the affidavit filed on record by the complainant, it transpires that there are material contradictory versions given by both the Appellant and the Complainant regarding the settlement. Appellant’s plea is that before undertaking the certification work for these companies for the Financial Year 2015-16, she had sent a communication to seek NOC from the Complainant and when there was no response for 30 days, she had done the certification work. Complainant’s plea is that the Appellant had not communicated with her despite sending e-mails; she did not take his calls and did the certification work without any communication to him. This controversy requires to be resolved after getting evidence of the parties on the issue. Again there is controversy as to how and under what circumstances; the settlement was arrived at between the parties. In the appeal, Appellant’s case is that she had personally visited the Complainant after he filed Complaint and only for the first time, the claimant informed her of certain professional dues. She assured the Complainant to clear of his entire dues from the said companies and due to her efforts; the Complainant got all his dues/fee. Regarding NOC, the Complainant informed her that since his office was under renovation, the posting of the NOC letter could not reach his table. She further stated that the Complainant volunteered to withdraw the Complainant filed by him. Contrary to that, the Complainant in the affidavit has disclosed that the Appellant was known to her professionally before. There was no communication from her side to his e-mails. After registration of the Complaint, on 15.12.2017, the Appellant visited him and tendered oral apology and admitted to her mistake. On her insisting to withdraw the complainant, he gave her a withdrawal letter with the hope that she would present it before the Institute.

14. Since the proceedings before the BOD were ex-parte and both the Complainant and the Appellant had not put appearance, this Authority is of the view that the dispute needs to be resolved on merits after considering the rival contentions of the parties by the BOD. The Appellant has already suffered when her name for one month was removed from the Register of Members. She is a household lady and has given sufficient reason for not putting appearance before BOD due to birth of a baby. Despite having withdrawal letter, it could not be produced before the Authority. The BOD is required to consider as to under what circumstances this settlement was arrived at between the parties and what consequences it has.

15. Considering all these reasons, we are of the view that the matter needs to be adjudicated on merits after giving reasonable opportunity of being heard to the Appellant.

16. The Authority records its displeasure about the conduct of the Complainant during the entire proceedings. The Complainant lodged a comprehensive Complaint supported with several documents before the Institute on 3rd August 2017. He sent letter dated 1st September 2017 providing certain information sought by the Institute. However, subsequent to that, he did not communicate with the Institute. He settled the dispute with the Appellant of his own without seeking any permission from the Institute Respondent No.1; he did not even bother to intimate the Institute about the alleged settlement. The Complainant having settled the dispute on 15.12.2017 did not withdraw the Complaint; he did not opt to appear before the Institute during proceedings. There was no occasion for the Complainant to handover the withdrawal letter to the Appellant. It resulted in the passing of the impugned Order whereby in ex-parte proceedings, the Appellant was held ‘Guilty’ and was punished. The Complainant, at first instance did not appear before this Authority despite service of notice. When compelled to put appearance vide order dated 04.10.2019, the Complainant has taken inconsistent pleas about the settlement. He did not disclose the terms and conditions of the settlement. This has caused immense wastage of time of the Authority. The action of the Complainant to settle the dispute without informing the Institute and to use the forum to recover his alleged ‘dues’ only is a serious matter and should be looked into by the Institute/BOD. From the contents of letter dated 18.04.2017 sent to the Appellant by the complainant, it can be inferred that the Complainant was interested in the recovery of his ‘dues’ only.

17. In the light of above discussion, we set aside the impugned Order dated 12th August, 2019 and remit the matter to the Board of Discipline with direction to decide it by a reasoned order in the light of observations made above. The Board of Discipline will dispose of this matter on merits after giving reasonable opportunity to parties to produce their evidence, within six (6) months from the date of receipt of this order.

Download Judgment/Order

More Under CA, CS, CMA

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

January 2021
M T W T F S S
 123
45678910
11121314151617
18192021222324
25262728293031