V.B. Gupta, J.
1. This reference has been made to the High Court under Section 21(5) of the Chartered Accountant Act read with Chapter 7-F of the Delhi High Court Rules.
2. Notice in this reference was issued to respondent No. 1 on 23rd January, 2006 but he could not be served by ordinary process. Accordingly, he was served by substituted service through publication in the newspaper “Statesman” (New Delhi Edition). On 30th April, 2007 despite service by publication. Respondent No. 1 did not put in his appearance. Hence, vide order dated 23rd May, 2007, respondent No. 1 was proceeded ex-parte.
3. On 30th July, 2007 at the time of arguments also, none was present on behalf of respondent No. 1.
4. As per statement of the case, Shri R.K. Goswami, Administrator, Delhi Nagrik Sahkari Bank Ltd. made a complaint against respondent No. 1 with the following allegations:
That complainant had requested respondent No. 1 to complete the audit for the years 1987-88 to 1990-91 within a period of six months. Thereafter the complainant took up the issue of the completion of job with the respondent No. 1 vide their subsequent letters and respondent No. 1 assured the Complainant to complete the audit. A sum of Rs. 45,000/- was paid to respondent No. 1 as audit fees and all the books of accounts were produced to respondent No. 1 and at the request of respondent No. 1 the complain-ant had been extending time. Respondent No. 1 without any justification has failed to complete the audit.
5. On the basis of these allegations, it appears that respondent No. 1 has committed professional misconduct under Clause (7] of Part I of the Second Schedule of the Chartered Accountants Act, 1949. This clause reads as under:Online GST Certification Course by TaxGuru & MSME- Click here to Join
A chartered accountant in practice shall be deemed to be guilty of professional mis conduct, if he –
(1) to (6) xx xx xx xx
(7) is grossly negligent in the conduct of his professional duties;
(8) to (10) xx xx xx xx
6. A copy of the complaint was sent to respondent No. 1 with request to send his written statement. Despite repeated reminders, no reply in this regard was received and as such the complaint and the other materials, in the absence of the written statement of respondent No. 1, were considered by the Council in its meeting held in February, 2003. The Council being prima facie of the opinion that the Respondent No. 1 was guilty of professional and/or other misconduct, referred the case to Disciplinary Committee constituted under the Act for enquiry.
A meeting of the said Committee for the purpose of enquiry was fixed for 20th June, 2003 but the same was adjourned to 6th August, 2003 at respondent’s request. On that day, the complainant with his counsel and respondent No. 1 appeared before the Committee and did not plead guilty. However, respondent No. 1 did not submit any written statement or reply but presented his case and produced his witnesses. After considering the submissions made by the complainant and respondent No. 1 the Committee submitted its report dated 5th November, 2003. The Committee was of the opinion that respondent No. 1 was guilty of professional misconduct falling within the meaning of Clause (7) of Part 1 of the Second Schedule and “other misconduct” within the meaning of Section 21 read with Section 22 of the Chartered Accountants Act,
7. A copy of Disciplinary Committee re-port was forwarded to both the parties vide Institutes’s letter dated 5th December, 2003 and they were requested to send their written representation, if any, and also if they so desired, they could appear before the Council.
The complainant submitted his representation dated 3rd January, 2004, whereas, respondent No. 1 did not submit any written representation.
8. Our consideration of the report of Disciplinary Committee along with written representation received from the complainant, the council decided to accept the report of the Disciplinary Committee and found that respondent No. 1 was guilty of professional misconduct falling within the meaning of Clause (7) of Part I of the Sec and Schedule. Accordingly, the Council decided to recommend to this Court that the name of respondent No. 1 be removed from the Register of Members for a period of one year.
9. As per record, the respondent No. 1 has admitted in writing before the Committee that he had accepted advance audit fee of Rs. 45,000/- and later on he did not complete the audit work. According to respondent No. 1, the advance audit fee was taken by him only to meet the promise of illegal gratification to the Concerned Authority for allotment of the audit through the Bank Manager and the amount paid in this process totalled Rs. 51,000/- which is more than the advance audit fee received by him and, therefore, the question of returning the advance, received does not arise.
10. In view of the admission made by the respondent No. 1 in writing, that he has accepted advance audit fees of Rs, 45,000/- and did not complete the audit work, it would certainly amount to negligence in dish charge of his professional duties and which, clearly shows that he had acted in a manner unbecoming of a Chartered Accountant and, therefore, the Council rightly recommended removal of his name from the Register of Members for a period of one year.
11. We have examined the issue whether the punishment is too harsh or not, but we “find that there has to be some degree of integrity and probity which is expected of a Chartered Accountant who has been engaged for completing the audit work. It is pertinent to mention here that earlier also in Chat. A. Ref. No. 5/2005 (Council of The Institute of Chartered Accountants of India v. Dayal Singh F.C.A.) another complaint had been made against this very respondent and on the recommendations of Council, this Court has ordered that the name of Sh. Dayal Singh (Respondent No. 1) be removed from the Registers of Members of the Council. for a period of one month.
12. Under these circumstances, we are of the view that the punishment that has been awarded to respondent No. 1 is not unduly harsh. We accept the recommendations of the Council to the effect that the name of respondent No. 1 be removed from the Register of Members for a period of one year. Necessary gazette notification may be issued by the authority,
13. The reference is disposed of accordingly.