Case Law Details

Case Name : Radhey Shyam Bansal & Anil Kumar Aggarwal Vs. ICAI (Appellate Authority)
Appeal Number : Appeal No. 12/ICAI/2017 and 14/ICAI/2017
Date of Judgement/Order : 18/10/2018
Related Assessment Year :
Courts : Appellate Authority (7)

Radhey Shyam Bansal & Anil Kumar Aggarwal Vs. ICAI (Appellate Authority)

1. The cause of action in both the above appeals is similar and involves common issues. Hence both the above appeals are being disposed off by this common order.

2. In brief, the facts and findings of both these appeals are as under:

(i) Radhey Shyam Bansal vs The Institute of Chartered Accountants of India [Appeal No. 14/ICAI/2017]

3. This appeal has been filed by the Appellant before this Authority against the Order dated 30th May, 2017 (Impugned Order) passed by the Board of Discipline of the Institute of Chartered Accountants of India (ICAI) under Section 21A (3) of the Chartered Accountants Act, 1949 read with Rule (15) of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, whereby, the Appellant has been awarded the punishment  of the removal of his name from the Register of Members for a period of three months and also imposed a fine of Rs.1,00,000/- (Rupees One lakh) upon him,   consequent upon a Report of the Board of Discipline dated 26th April, 2017, wherein, the Appellant was held guilty under clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.

4. The facts of the instant appeal as narrated in the Report of the Board of Discipline at Para No. (1) are as under:

“1. A sting operation conducted by Aaj Tak News Channel and aired on 14th November, 2016 under the title “Jugadu Mechanic Part-3” containing allegations against CA. Radhey Shyam Bansal (M. No. 091903), Delhi (hereinafter referred to as the “Respondent”) was brought to the attention of this Directorate by CA. Deep Jain vide his email dated 14th November, 2016. On an examination of the contents of the above video clip, it was decided to treat the same as “information” within the meaning of Rule 7 of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.”

5. Accordingly,  this  matter  was  taken  up  for  consideration  by  the  Director (Discipline), who vide Order dated 3rd March, 2017 found the Appellant ‘Prima Facie’ guilty of the Professional Misconduct falling within the meaning of Clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.

6. Pursuant to forming of the Prima Facie Opinion, the Director (Discipline), in terms of the requirements of Section 21 (3) of the Act read with rules as applicable, placed his „Prima-Facie Opinion‟ before the Board of Discipline of the Institute for consideration, which, in turn, on examination of the said complaint, written statements, evidence written as well as oral, further replies, ‘Prima-Facie Opinion’ and after hearing the parties, while agreeing with the „Prima-Facie Opinion‟ decided to proceed further in the matter and accordingly gave its findings as hereunder:

“8.1  The  allegation  against  the  Respondent  is  that  a  sting  operation  was conducted by “Aaj Tak” News Channel which was broad cast by the Channel on 14th November, 2016, under the title „Jugadu Mechanic Part-3‟. In the aforesaid telecast, the Respondent was show discussing with some individual about the manner of converting black money into white money after charging a cost / charge of 30% to 40%. The aforesaid act on the part of the Respondent  has  caused  grave  disrepute  to  entire  fraternity  and  to  the Institute.

8.2 The main focus of the defence of the Respondent or written / oral submission were relating to;

(1) Non maintainability of Clause 2 of Part-IV of First Schedule under which the Respondent had been held Prima Facie guilty.

(2)  The  case  was  bring  based  on  the  sting  operation  whereby  the Respondent  was  honey  trapped  and  is  not  advisable  in  terms  of judgments passed by Hon‟ble Supreme Court in the criminal petition No. 747 and 748/2010 (Rajat Prasad Vs. CBI-SC) dated 24th April, 2014.

(3) The Respondent is not being provided the original video footage which was requested by the Board before formation of PFO opinion.

(4) The explanation given by the Respondent that the video has doctored is being misinterpreted by the Disciplinary Directorate while forming the PFO.

(5) The narrative of the telecast part done on 14th November, 2016 pertains to the reporter, anchors and commentators in the video and this has caused more damage and disrepute to the CA professional then what was stated by the Respondent during the discussions in the siting operation.

(6) The Respondent has not done anything wrong act or abetted anything criminal. It was not possible for him to have a free profiling exercise for any new potential client should have during the profiling process, the conversations are held.

8.3 The Counsel at the first instance made a submission that the Respondent has been found Prima Facie guilty of Clause (2) of Part-IV of First Schedule. A bare reading of the said clause shows that at first, there has to be an opinion of the ‘Council’ that the aforesaid act on the part of the Respondent brought disrepute to the profession or the Institute. In this regard, he stated the said clause reads as under:-

“PART IV: – Other misconduct in relation to members of the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he –

1. x x x

2. in the opinion of the Council, brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work”.

8.4 It may be noted that the Chartered Accountants Act was amended in the year 2006. While amending the provisions of the Act, especially related to the Disciplinary mechanism of the Institute, all the powers vested with the Council in the pre-amended Act, has been vested in Director (Discipline), Board of Discipline and Disciplinary Committee as the case may be. As per the present scheme, the prima facie opinion is formed by Director (Discipline) and in turn placed before Board of Discipline or Disciplinary Committee as the case may be
for its approval. Whereas, the Board of Discipline consists of Presiding Officer, a member of the Council and a nominee of Central Government, the Disciplinary Committee consists of a Presiding officer, two members of the Council and two nominees appointed by the Central Government. Further, the Central Government has also notified  Chartered  Accountants    (Procedure    of  Investigation of Professional and Other Misconduct and Conduct of Cases)  Rules, 2007 laying down the manner to deal with the complaints / information  so received by the Disciplinary Directorate.

8.5 Further, it is the contention of the Board that on earlier several occasions the misconduct of other Respondents under this clause was considered by the Board in terms of provisions of Section 22 of the Chartered Accountants Act, 1949 which reads as under:-

22. Professional or other misconduct defined for the purposes of this Act, the expression “professional or other misconduct” shall be deemed to include any act or omission provided in any of the Schedules, but nothing in this Section shall be constructed to limit or abridge in any way the power conferred or duty cast on the Director (Discipline) under sub-section (1) of Section 21 to inquire into the conduct of any member of the Institute under any other circumstance.

In view of the above the Board does not agree with the submission made by the Respondent.

8.6 The next plea raised by the Counsel for the Respondent is that the Rule 14(1) of the Chartered Accountants (Procedure of Investigation of Professional andOther Misconduct and Conduct of Cases) Rules, 2007 provides for summary procedure therefore, the Board of Discipline cannot summon a witness and if being so the Respondent may also been given an opportunity. He further pointed out that Rule 14(1) of the said Rules reads as under:-

“14. Procedure to be followed by the Board of Discipline:

(1) The Board of Discipline shall follow summary disposal procedure in dealing with all cases before it, as laid down in this chapter.”

8.7 The Board agrees with the contentions raised that the Board of Discipline shall follow summary procedure. However, the Board wishes to mention here that it is the Respondent himself who has raised the objection that in the telecast version the channel has distorted the original clip. In order to clear the air of doubt on the sting operation and keeping in view the importance attached to the matter, the Board decided to call for the raw footage of the sting operation. During the course of hearing the Respondent has not disputed that the contents of information tallies with the conversation contained in the raw footage.

8.8 The Counsel for the Respondent further submitted that the Channel has intruded into the privacy of the Respondent and made him fall into a trap. In support of this submission he has attempted to draw strength from the judgement of Hon‟ble Supreme Court in the Criminal Petition No. 747 and 748/2010 (Rajat Prasad Vs. CBI-SC) dated 24th April, 2014.

8.9 Thereafter, the Board decided to examine the contentions of the Respondent given in the written submission based on the merits of the allegation made out against the Respondent. The Board observed the written representation of the Respondent who had submitted as under:-

“A CA has hard job in hand while convincing a tax evader to comply with the law and to pay taxes. A straight call to pay taxes, in the very first meeting would not yield any positive result from a tax evader. On the contrary, it would only jeopardize the prospects of getting a new client. A CA has to carefully choose his strategy to retain the good impression of the potential client. Therefore, a CA is likely to strike a conversation that would find a meeting ground with a potential client. During this process of relationship building, in response to coaxing by the potential client, if a CA reacts to help him, it has to be considered as a normal human behaviour, after all survival of a CA depends on finding his clients. In this background it is submitted that a conservation or two between a CA and a potential client that sounded as loose talk cannot become the yardstick to establish that the professional has behaved unethically”.

8.10 The Board has gone through the contents of the judgment relied upon by the Counsel for the Respondent. The Board finds that the reliance on the aforesaid Order is misplaced as the same relates to criminal proceedings. The Board, on having viewed the telecast footage and the raw footage of the sting operation finds that the Respondent himself during the initial part of his discussion with the reporter has asked individual to give the reference so that he can discuss the matter. This makes the intent and objective of the Respondent very much clear.

8.11  The  Board  has  carefully  considered  and  deliberated  on  the  aforesaid submission of the Respondent and is of the view that the way and manner in which the Respondent has expressed himself as depicted in the discussion / telecast with the potential client is completely unethical. The manner of the discussions shows that these types of activities suggested by the Respondent are a regular practice indulged in by him and he does not bother about the legality of the advice given by him. In fact as per the video footage, the Respondent  was  also  there  and  he  was  also  handling  the  demonetised currency notes. This shows that he was dealing in those nefarious and illegal activities in a regular manner without any feeling of guilt.”

7. Thus, the Board of Discipline found the Appellant guilty of other misconduct falling within the meaning of clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949 and subsequently awarded the unishment as supra.

(ii) Anil Kumar Aggarwal vs. The Institute of Chartered Accountants of India [Appeal No. 14/ICAI/2017]

8. This appeal has been filed by the Appellant before this Authority against theOrder dated 30th May, 2017 (Impugned Order) passed by the Board of Discipline of the Institute of Chartered Accountants of India (ICAI) under Section 21A (3) of the Chartered Accountants Act, 1949 read with Rule (15) of the Chartered Accountants (Procedure of Investigation and Other Misconduct and Conduct of Cases) Rules, 2007, whereby, the Appellant has been awarded the punishment of the removal of his name from the Register of Members for a period of three months and also imposed a fine of Rs.1,00,000/- (Rupees one lakh) upon him, consequent upon a Report of the Board of Discipline dated 26th April, 2017, wherein, the Appellant was held guilty under clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949. The said clause reads as under:

“PART IV: – Other misconduct in relation to members of the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he-

1. x x x

2. in the opinion of the Council, brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work”.

9. The facts of this appeal as narrated under Para No. (1) in the Report of the Board of Discipline are as under:

“1. A sting operation conducted by Aaj Tak News Channel and aired on 14th November, 2016  under  the  title “Jugadu  Mechanic  Part-3”  containing allegations  against  CA.  Anil  Kumar  Aggarwal  (M.  No. 093064),  Delhi (hereinafter referred to as the “Respondent”) was brought to the attention of this Directorate by CA. Deep Jain vide his email dated 14th November, 2016. On an examination of the contents of the above video clip, it was decided to treat the same as “information” within the meaning of Rule 7 of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.”

10. Accordingly,  this  matter  was  taken  up  for  consideration  by  the  Director (Discipline), who vide Order dated 3rd March, 2017 found the Appellant ‘Prima Facie’ guilty of the professional misconduct  falling within the meaning of Clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.

11. Pursuant to forming of the Prima Facie Opinion, the Director (Discipline), in terms of the requirements of Section 21 (3) of the Act read with rules as applicable, placed his „Prima-Facie Opinion‟ before the Board of Discipline of the Institute for consideration, which, in turn, on examination of the said complaint, written statements, evidence written as well as oral, further replies, ‘Prima-Facie Opinion’ and after hearing the parties, while agreeing with the ‘Prima-Facie Opinion’ decided to proceed further in the matter and accordingly gave its findings as hereunder:

“6.1 The allegations against the Respondent is that a sting operation was conducted by „AAJ TAK‟ news channel which was broadcast by the Channel on 14th November, 2016, under the title ‘Jugadu Mechanic Part-3’. In the
aforesaid  telecast,  the  Respondent  was  shown  discussing  with  some individual about the manner of converting black money into white money after charging a cost / charge of 30% to 40%. The aforesaid act on the
part of Respondent has caused grave disrepute to the entire fraternity and to the Institute.

6.2 The Counsel at the first instance made a submission that the Respondent has been found prima facie guilty of Clause (2) of Part-IV of First Schedule. A bare reading of the said clause shows that at first, there has to be an opinion  of  the ‘Council’  that  the  aforesaid  act  on  the  part  of  the Respondent brought disrepute to the profession or the Institute. In this regard, he stated that the said clause reads as under;

“PART IV: – Other misconduct in relation to members of the Institute generally

A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he-

1. x x x

2. in the opinion of the Council, brings disrepute to the  profession or the institute as a result of his action whether or not related to his professional work”.

6.3 It may be noted that the Charted Accountants Act was amended in the year 2006. While amending the provisions of the Act, especially related to the Disciplinary mechanism of the Institute, all the powers vested with
the  Council  in  the  pre-amended  Act,  has  been  vested  in  Director (Discipline), Board of Discipline and Disciplinary Committee as the case may be. As per the present scheme, the prima facie opinion is formed by Director (Discipline) and in turn placed before Board of Discipline or Disciplinary Committee as the case may be for its approval. Whereas, the Board of Discipline consists of Presiding Officer, a member of the Council   and   a  nominee   of   Central   Government,   the   Disciplinary Committee consists of a Presiding officer, two members of the Council and two nominees appointed by the Central Government. Further, the Central Government has also notified Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 laying down the manner to deal with the complaints/ information so received by the Disciplinary Directorate.

6.4 Further, it is the contention of the Board that on earlier several occasions the misconduct of other Respondents under this clause was considered by the Board in terms of provisions of Section 22 of the Chartered Accountants Act, 1949 which reads as under:-

22. Professional or other misconduct defined for the purposes of this Act, the expression “professional or other misconduct” shall be deemed to include any act or omission provided in any of the Schedules, but nothing in this Section shall be constructed to limit or abridge in any way the power conferred or duty cast on the Director (Discipline) under subsection (1) of Section 21 to inquire into the conduct of any member of the Institute under any other circumstance.

In view of the above the Board does not agree with the submission made by the Respondent.

6.5 The next plea raised by the Counsel for the Respondent is that the Rule 14 (1)   of   the   Chartered   Accountants   (Procedure   of   Investigation   of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 provides for summary procedure therefore, the Board of Discipline need not summon a witness and if so the Respondent may also been given an opportunity. He further pointed out that Rule 14 (1) of the said Rules reads as under:-

“14. Procedure to be followed by the Board of Discipline:

(1) The Board of  Discipline shall follow summary disposal procedure in dealing with all cases before it, as laid down in this chapter.”

6.6 The Board agrees with the contentions raised that the Board of Discipline shall follow summary procedure. However, the Board wishes to mention here that it is the Respondent himself who has raised the objection that in the telecast version the channel has distorted the original clip. In order to clear the air of doubt on the sting operation and keeping in view the importance attached to the matter, the Board decided to call for the raw footage  of  the  sting  operation.  During  the  course  of  hearing  the Respondent has not disputed that the contents of information tallies with the conversation contained in the raw footage.

6.7 The Counsel for the Respondent further submitted that the Channel has intruded into the privacy of the Respondent and made him fall into a trap. In support of this submission he has attempted to draw strength from the judgement of Hon‟ble Supreme Court in the Criminal Petition No. 747 and 748/2010 (Rajat Prasad Vs. CBI-SC) dated 24th April, 2014.

6.8 The Board has gone through the contents of the judgment relied upon by the Counsel for the Respondent. The Board finds that the reliance on the aforesaid Order is misplaced as the same relates to criminal proceedings. The Board, on having viewed the telecast footage and the raw footage of the sting operation finds that the Respondent himself during the initial part of his discussion with the reporter has asked individual to give the reference so that he can freely discuss the matter. This makes the intent and objective of the Respondent very much clear.

12. Thus, the Board of Discipline found the Appellant guilty of other misconduct falling within the meaning of clause (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949 and subsequently awarded the punishment as supra.

13. Aggrieved by the same the Appellants are in appeal before us.

14. Both  the  Appellants  and  their  Counsel  Mr.  Sandeep  Manaktala  vehemently challenged the Impugned Orders. Per Contra, the Learned Counsel Ms. Pooja M. Saigal appearing on behalf of ICAI vehemently supported the Impugned Order. Voluminous set of documents were also filed by both the parties.

15. The Appellants have raised a number of grounds of appeal which are similar in nature. Firstly, we take up following ground of appeal:

“c. NON-APPLICABILITY OF THE FIRST SCHEDULED, PART-IV, CLAUSE (2) OF THE CHARTERED ACCOUNTANTS ACT, 1949

1 It is further brought to the attention of the Hon‟ble Board (Sic. Authority) that the undersigned has been held guilty under First Schedule, Part-IV, Clause (2), of the Act, which read as follows:-

“A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he –

1. XXX

2. in the opinion of the Council, brings disrepute to the  profession or the institute as a result of his action whether or not related to his professional work.”

On behalf of the Appellants, it has been submitted that for invoking the above provision, it is necessary for the “Council” to arrive at a clear finding  or opinion that the actions of the member, proposed to be charged of  “Other  Misconduct”  have  brought  disrepute  to  the  profession  or  the  Institute,  which has not been done in the present cases . Therefore, the  proceedings are not valid.

16. This ground has been taken in both the appeals. We have noted that this issue has also been dealt with elaborately in the Impugned Order. The counsels of both the sides made their submissions in this regard.

17. It is  pertinent to note here that this Authority has already dealt with and decided this issue in the Appeals earlier namely Gyan Prakash Agarwal (Appeal No. 08/ICAI/2014), Rajiv Maheshwari (Appeal No. 05/ICAI/2014) and Sameer Kumar Singh Vs. ICAI (Appeal No. 07/ICAI/2014)  and has held as under:-

“15. Based on the above and by taking note of the written submissions made on behalf of the Institute of Company Secretaries of India,  the Institute of Cost Accountants of India and the Institute of Chartered Accountants of India containing the detailed analysis of the issue in question, we are of the considered view that the proper and correct interpretation which can be given to Clause (2) of Part-IV of the First Schedule to the respective Acts, in the light of the principles laid down and having regard to the case laws of various courts and further considering the basic objects, reasons and purpose of the amendment brought in the statutes as quoted above is that, ‘Prima facie Opinion (PFO)’ formed by the Director (Discipline) in all such complaints / information cases serves the purpose for proceeding further for taking disciplinary action against the errant members as in terms of the amended mechanism for conduct of cases, it is the Director (Discipline) who has to form the first Prima Facie Opinion for the disciplinary proceedings to be initiated. Therefore, the opinion of council as is mentioned in the clause (2) of Part-IV of the First Schedule to the Act has to be given a purposive meaning and has to be read in consonance with the letter and scheme of the enactment”.

18. In our considered view, the same shall mutatis mutandis apply in both these Appeals and accordingly, we find no merit in this ground. Thus, we hereby reject this ground of Appeal as taken by the Appellants.

19. Further, in both these appeals, a number of other grounds have also been taken while challenging the Impugned Order. In summary, they inter-alia relate to the following:-

I. The case was heard in a summary manner as per Rule 14 (1) of Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 and a summary trial was concluded. No opportunity was given to appellants to cross examine any witness.

II. The BOD failed to examine the reporter who allegedly did the sting operation and recorded the video as alleged and failed to examine the veracity of the alleged video.

III. The unedited video was not made available to the Appellants till very late and thereafter no proper opportunity was given to them to rebut  the same. [In case of Shri Radhey Shyam Bansal, it was made available to him pursuant to the direction of this Authority only].

VI. The  proceedings  were  concluded  in  undue  haste  without  giving  adequate opportunity to the Appellants to present their defence.

V. An allegation based on Sting operation is not admissible as an evidence as per the law prevailing in India.

20. The Learned Counsel appearing on behalf of the Appellants argued that the entire news telecasted by the said TV Channel and the sting was not based on the facts. He invited our attention to various letters submitted before the Director (Discipline) as well as before the Board of Discipline, stating that it was a manipulated video clip which was presented after a lot of editing and does not represented the truth. He denied the contents of the same and claimed that they were manipulated. He also submitted that the original uncut recording was not given to Appellants but was only displayed before the Board of Discipline and no reasonable opportunity was given to controvert the same. He further stated that the original recording was obtained by Shri Anil Aggarwal after filling a RTI application and in case of Shri Radhey Shyam Bansal; it was given only after the directions of this Authority. Thus in both these matters, the raw footage was given to them after Board of Discipline had issued its Report.

21. Additionally, he submitted that after receipt of the original unedited recording, both the Appellants have made detailed objections and submissions in that regard before this Authority. In these submissions, the Learned Counsel has jraised various objections about the authenticity, absence of proper procedure and lack of verification of the same.  It was further submitted that as per notes of hearing of the case on 17th April, 2017 one Dr. Puneet Jain from Aaj Tak Channel appeared and gave evidence about the originality of the said recording. However, he was not the person who recorded the sting operation. The person who recorded the same was never produced. No opportunity was given to Appellants to cross examine the said witness, whereas they had specifically asked for the same which is clearly recorded on page No. 2 of the Notes of Hearing held on 17th April, 2017.

22. The Learned Counsel appearing on behalf of the Appellants also submitted that the summary procedure of trial, adopted as per as per Rule 14 (1) of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 was wrongly followed. Summary trial does not mean that Principles of Natural Justice can be violated. It was submitted before us that in these matters neither reasonable opportunity was given nor the evidence relied upon was provided to the Appellants nor the veracity of the same was examined. Thus, he submitted that the Impugned Order is bad in Law. Further, no opportunity to cross examine the witness was given as was requested vide Para (9) of the letter dated 18th April, 2017 submitted before the Board of Discipline by the  Appellants.

23. Furthermore, the Learned Counsel for the Appellants has filed detailed objections before us, for which he submitted that the same could not be produced before the Board of Discipline as no reasonable opportunity of hearing was given. In these submissions, he has submitted para wise objections to the procedure and the raw footage as such.

24. The Learned Counsel further arguing about lack of opportunity, while narrating the chronological sequence of events, submitted before us that the cases were concluded only in one hearing on 17th April, 2017 and when the Appellants wanted to submit the objections to the footage, he was given only time of one day and asked to submit by next day as mentioned in Para (5.2) of the said Order. It was informed to us that the Appellants have submitted detailed objections on 18th April, 2017 by two letters raising all the above mentioned objections.  However,  the  said  letter  dated 18th  April, 2017  was  not  even  considered while holding him guilty, whereas the said Report of the Board of  Discipline  was  finalised  on 26th  April, 2017.  He  further  argued  that  these objections have not been even referred to in the said Report of the Board of Discipline.

25. In case of Shri Radhey Shyam Bansal, in addition to above, it was submitted that the father of Shri Bansal had expired on 15thApril, 2017 and the hearing of 17th April, 2017 was adjourned to 21st April, 2017 despite his request for a longer time. Shri Bansal also filed a detailed reply vide letter dated 21st April, 2017, where he could not be present due to rituals in his family. But the letter was not considered and the hearing was concluded in a hurried manner on 21st April, 2017 without appreciating the physical and mental state of Shri Bansal and the matter was concluded in a great hurry in total violation of the Principles of Natural Justice.

26. Further, challenging the correctness of sting operation and the proceedings, the Learned Counsel of the Appellants have raised various grounds before us that the case was disposed of in a summary manner and even the veracity of the said raw footage has not been proved. He invited our attention towards Letter of the ICAI dated 5th April, 2017 informing that the Editor in Chief of the India Today Group was summoned in the matter but he never appeared. It was thus submitted that the authenticity of the raw footage was never proved and relied upon without any basis.

27. The Learned Counsel appearing on behalf of the Appellants also pleaded that it was an act of entrapment which was not legal and cannot be considered as evidence.

28. Finally, the Learned Counsel appearing on behalf of the Appellants placed reliance upon the following pronouncements in support of his arguments:-

a. Alagaapuram R. Mohanraj v/s Tamil Nadu Legislative Assembly (SC) (2016) 6 SCC 82

b. Rajat Prasad v/s CBI (SC) (2014) 6 SCC 495

c. Court On Its Own Motion v/s State [146 (2008) DLT 429]

29. As regards the punishment awarded to the Appellants, the Learned Counsel submitted that it was very harsh and un-justified.

30. On the other hand, the Learned Counsel appearing on behalf of the Institute vehemently supported the Order passed by the Board of Discipline. She argued that the proceedings were rightly concluded under summary procedure as per Law. She further stated that the Appellants have neither disputed any part of  raw footage of the sting operation nor they have challenged their presence in the sting operation. Furthermore, she submitted that in view of the admission by the Appellants no further evidence was required to be produced and thus the matters were correctly decided.

31. Additionally, as regards not giving copy of raw footage, she submitted that it was duly played in the meeting of the Board of Discipline and the Appellants had adequate opportunity to repudiate the same. She also submitted that adequate opportunity was given to Appellants and thus this argument of the Appellants is not justified. Besides, she also pleaded that there was no entrapment by the Institute rather it was a third party sting operation and therefore the same was not entrapment.

32. As regards the admissibility of sting operation as evidence, she relied heavily on the judgement of Hon’ble Supreme Court in the case of R. K. Anand V/s Registrar Delhi High Court (SC) (2009), 8 SCC 106 and submitted that such sting operation is admissible as evidence in any judicial or quasi-judicial proceedings. Thus she prayed to sustain the orders passed by the Board of Discipline under challenge before us.

33. We have heard rival submissions of all the parties and also examined all the documents,  pleadings  and  evidence produced  before  us  and  before  lower authorities. We have also viewed the telecasted version of the sting operation besides, examined the verbatim version of the relevant portion of un-edited raw footage and submissions made by both the parties in that regard in addition to perusing the judicial pronouncements cited by both the parties.

34. Regarding  the  summary  procedure  as  per  Rule 14 (1)  of  the  Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, we have already decided the instant issue in principle, in Appeal No. 05/ICAI/2014 namely Rajiv Maheshwari Vs. ICAI  & Others dated 25th September, 2017, in which he have held as under:-

“16. However, to see that the disposal by summary procedure do not require collection of any evidence, will not be appropriate to say so. The summary procedure only means disposal quickly and by adopting such means as would curtail the allegations in a summary manner such as by taking Affidavits from both the sides, as is being done for disposal of a summary suit under Order 37 of Civil Procedure of Code, 1908. Similarly, other way to decide the matter summarily may involve calling upon the parties to admit/deny the documents filed by them and then take note of the admitted documents for disposal of the controversy.

Following the same, in our view, the summary procedure cannot abridge the Principles of Natural Justice or do away the need of producing proper evidence to hold the member charged as guilty.

35. In the present Appeals, it is true that the Appellants have not denied their appearance in the sting operation but from the very beginning they are denying the contents and the manner in which it was presented to the Institute. The raw footage which was the basic evidence in these Appeals should have been made available to the Appellants and reasonable time should have been given to them to controvert the same. Admittedly, in both these Appeals, the raw footage of the video was given to them after the Board of Discipline had issued the Report of holding them guilty. It is also not understandable why the final Order was passed so hurriedly and more so in the case of Shri Bansal, whose father expired on 15th April, 2017 which is a very valid ground for giving him more time of defence.  It is relevant to note here that after receipt of the raw footage, the Appellants  have  submitted  detailed  objections  which  need  to be  properly examined, which Board of Discipline could have done, had raw footage of the video of sting operation given in time to the Appellants.

36. We are very surprised to note that most of the objections taken before us were filed before the Board of Discipline well within the time given by them but the Board of Discipline has not even dealt with the same in its Report. In fact, there is not even a mention of the same in the Report. We fail to understand why the same were not considered in the Impugned Report.

37. As far as the issue of admissibility of the sting operation is concerned, the Hon’ble Supreme Court has prescribed many safe guards before accepting  the  same  as  evidence.  The  most  important  is  that  the veracity of the evidence must be established. In case of R. K. Anand supra, relied upon by the Institute, the same principle has been upheld. In  the  instant  Appeals,  one  witness  namely  Mr.  Puneet  Jain  was examined but it is not on record how he verified the veracity of raw footage of the video recorded based on which news were telecasted. The request of the Appellants to cross examine him was also not acceded, which, in our considered view is not justified.

38. In the light of these deficiencies in the procedure followed by the Board of Discipline in the name of summary procedure, we have no other option but to remand back both these Appeals to the Board of Discipline for consideration of all the issues as raised by both the Appellants herein and to decide these matters by passing a fresh Order within a period of six months from the date of receipt of this Order. Needless to mention that the Board of Discipline will provide to the Appellants adequate opportunity of being heard. We also grant liberty to both the Appellants to raise before Board of Discipline all issues raised before us or any other issue as well and produce any evidence in support of their defence. The Board of Discipline will be entitled to admit the evidence of sting operation only after following procedure as per law. If any witness is examined or already examined by the Board of Discipline, then full opportunity to cross examine the same will also be given to the Appellants, if required or asked by the Appellants, an opportunity to lead evidence in rebuttal may also be granted subject to time frame.

39. Since, we have decided to remand back these Appeals to the Board of Discipline, under the circumstances, we do not consider it necessary to comment on the other grounds raised by the Appellants. However, the Appellants will be entitled to raise all those grounds before the Board of Discipline.

40. Before finally disposing of these Appeals, we wish to express our serious concerns over the casual and careless manner in which these matters were decided by the Board of Discipline. Even the issues raised by the Appellants within the time allowed to them were not considered. The whole process was completed in an unnecessary hurry without any justifiable cause.  We direct the Board of Discipline to be more careful in future while deciding the matters of  such nature.

41. These appeals are disposed off accordingly. Interim orders, if any, are vacated. No order as to cost.

42. Registrar of the Authority is hereby directed to keep a copy of this common Order in both the Appeal files for records, future reference and compliance at the end of the Registry.

Source- Radhey Shyam Bansal & Anil Kumar Aggarwal Vs. ICAI (Appellate Authority); Appeal No. 12/ICAI/2017 and 14/ICAI/2017;18/10/2018

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