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2013 (10) TMI 502 - HC - Companies LawDisciplinary proceedings against the member of ICAI - irregularities in audit report - MAOCARO, 1988 - Temporary cancellation of membership - Professional misconduct - Held that:- A perusal of the record shows that the Company, whose Audit Report is stated to have been prepared by respondent No.1 contrary to the prescribed norms, has not made any complaint against respondent No.1. One of the Directors of the Company, namely, Vipan Gupta, appeared before the Disciplinary Committee as a witness but he did not state a word about the aforesaid Audit Report. He also did not say what damage or prejudice has been caused to the Company on account of that report. Amarjit Kamboj, the complainant, in our opinion had no locus standi to make a complaint in this respect - The Disciplinary Committee while returning the aforesaid finding of guilt against respondent No.1, has not referred to particular portions of the report, which according to the findings, were not in conformity with the prescribed norms. It has not pointed out, what matters were not commented upon and what was the effect of this omission. Similarly, it is not pointed out what matters were not applicable, which were omitted by respondent No.1 and how and to what extent has it harmed the interests of the Company. It has also not been pointed out by whom and in what manner the Audit Report was proved. Witnesses examined during the course of inquiry are found to have been cross-examined by the members of the Disciplinary Committee and by the complainant. Such a procedure is unknown to Indian jurisprudence and it in our opinion vitiates the entire proceedings of the Disciplinary Committee, being contrary to the settled principles of natural justice that one cannot be a judge and a prosecutor at the same time - proceedings of the Disciplinary Committee are found to be based on no evidence and are even otherwise vitiated. The Council did not apply its mind to the facts and circumstance of the case, accepted the report of the Disciplinary Committee in a mechanical manner and has made this reference to this Court - Disciplinary Committee is found to have observed that the proceedings could not continue in the absence of Registrar of Companies. However, the Registrar of Companies never participated in the proceedings - Another circumstance that needs to be highlighted is that the Company went before the Companies Law Board and entered into a compromise with the auditors' company. Complaint as regards the charge under reference, did not survive but the Disciplinary Committee for reasons best known to it, proceeded with the inquiry and avoided a reference to the settlement, referred to above. This renders approach of the Disciplinary Committee biased and, therefore, unacceptable - Decided against petitioner.
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