SC directs ICAI to provide complainant’s statement to CA for alleged misconduct.

SC directs ICAI to provide complainant’s statement to CA for alleged misconduct. High Court to interpret Regulation 16 of the CA Regulations 1988.

ABCAUS Case Law Citation:
ABCAUS 2006 (2017) (07) HC/SC

Brief Facts of the Case:

Disciplinary proceedings on the alleged charges of misconduct were initiated by the ICAI against a Chartered Accountant (CA). However, copies of written submissions of the complainant were not supplied to the CA. When pointed out, the ICAI passed order for reconsideration.

The CA approached the High Court and challenged that non supply of the said material had vitiated the proceedings on the ground of non-observance of principles of natural justice. The ICAI submitted that it was willing to conduct the further enquiry and also supply written submissions (WS) made by the complainant to the CA so that the he had opportunity to meet the contentions raised in WS.

However, the CA submitted that the order for reconsideration suffered from virus of procedural irregularities in as much as the same was not permissible under Regulation 16 of the Chartered Accountants Regulations 1988.

The High Court observed that non-supply of the written submissions by complainant to the CA would have vitiated the proceedings on the ground of non-observance of principles of natural justice as it would result in using the material, of which the CA had no opportunity to meet.

However, the High Court observed that in any case, by providing copy of the WS, no prejudice would be caused to the CA against whom enquiry is pending. The High Court was of the prima facie view that Regulation 16 did not prohibit the procedure as adopted by ICAI

However, on the request of the petitioner CA, the Hon;ble High court admitted interpretation of Regulation 16 as above.

On the request of interim relief, the High Court opined that if granted, it would  forestall the enquiry proceedings, however, it ordered that the further enquiry by ICAI shall be subject to the final outcome of the petition.

Unsatisfied with the order of the High Court, the CA approached the Hon’ble Supreme Court by way of filing a special leave petition (SLP). The Hon’ble Supreme Court, recently disposed off the SLP with direction that all the necessary documents shall be handed over to the  CA within   three weeks and the enquiry may continue, subject to finalization of the writ petition pening in the High Court.

Note: The Writ Petition pending with High Court is listed in August, 2017 for final hearing