1956 (7) TMI 50 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the respondent failed to discharge his professional obligations to the complainant.
2. Whether the respondent obtained a sum of Rs. 8,250/- by wrongful representation and attempted to obtain a larger sum by holding out a threat.
3. Whether the respondent charged fees on a percentage basis, violating the Chartered Accountants Act, 1949.

Detailed Analysis:

1. Failure to Discharge Professional Obligations:
The first charge against the respondent was that he failed to discharge his professional obligations by not appearing at the hearing of the appeals. The court found that there was no question of the respondent being bound to appear before the Appellate Tribunal, as the complainant had already engaged other representatives and briefed Counsel to appear for him. Thus, the respondent was effectively discharged from his obligation to appear. The court also noted that the evidence suggested the respondent was not present at the hearing, but this non-appearance could not ground a charge of misconduct as he was no longer required to appear. Therefore, the first charge was not proved.

2. Wrongful Representation and Attempt to Obtain Larger Sum:
The second charge was that the respondent obtained Rs. 8,250/- by wrongful representation and attempted to obtain a larger sum by holding out a threat. The court found that the complainant's testimony was unreliable and did not fit well with the nature of the payments made. The payments were made in small sums, which did not align with the claim that they were for advance payments to Counsel. The court also noted inconsistencies in the complainant's statements regarding the dates and reasons for the payments. Therefore, the second charge was not established as misconduct.

3. Charging Fees on a Percentage Basis:
The third charge was that the respondent charged fees on a percentage basis, violating Clause (m) of the Schedule to the Chartered Accountants Act, 1949. The court found ample evidence to support this charge, including the respondent's own letters. The court rejected the defense that the fees included payments for Counsel, noting that the stipulation was that the respondent would receive 10% of the relief obtained. The court also dismissed the argument that the respondent was functioning in a different capacity, noting that he was engaged and acted as a Chartered Accountant. This charge was thus established.

Conclusion:
The court concluded that the first and second charges were not proved, but the third charge was established. The respondent was found guilty of misconduct for charging fees on a percentage basis. Considering the respondent's comparative immaturity and the manner in which he was approached by the complainant, the court decided to impose a moderate penalty. The respondent was suspended from practice for a period of three months. No order for costs was made.