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2016 (9) TMI 714 - HC - Indian LawsCharges against a chartered accountant - professional misconduct - Held that:- In the present case, the complainant appeared before the Committee - on 19.01.2011 and explained the circumstances under which the agreement, embodied in the MOU, were entered into. The complainant, in fact did not withdraw his allegations; he also deposed that the criminal proceedings against the respondents continued and that the amounts agreed to be paid to him had not been in fact paid. The complainant relies on a subsequent MOU, the terms of which appear to be different, inasmuch as the complainant did absolve the respondent of all misconduct and withdraw the allegations. These facts, i.e. the parties appearing to have entered into another MOU on 16.04.2012 were material and had to be investigated. The impugned order does not take that into consideration at all. Whatever the truth of that document, the Council should have gone into it and called the complainant to depose before it, in the light of the later development. This, in the Court’s opinion, is a serious infirmity with the impugned order. The next question is whether in the circumstances of the case, particularly having regard to the nature of evidence and the materials placed before it, the Council could have concluded that the respondent was guilty of cheating or indulging in fraud, causing loss to the complainant. No doubt, the complaint does mention the relative amounts, the challans, the amounts allegedly collected as due, and the amounts paid. However, the relative or corresponding demands from the Service Tax authorities or the assessment orders, or even the service tax returns, are not on the record. These would have substantiated to a large measure the complainant’s allegation. Likewise, there is no material to suggest that the amounts were deposited in some other concern’s account. Quite possibly the respondent has been charge criminally for an offence. However, that ipso facto does not transform into proof of such criminal misconduct; the prosecution or the complainant would have to establish his guilt. While disciplinary proceedings may not be in the nature of court proceedings, yet when a professional, such as a chartered accountant is arrayed for misconduct which has quasi criminal overtones, the Council has to be circumspect; some modicum of objective evidence- both documentary and oral (and not only the say of the complainant- possibly the relative bank records and relevant statement of bank officers, too have to be considered) evidence is necessary. The cumulative picture which emerges is that the Council appears to have acted with haste and great dispatch. While its zeal to complete proceedings is understandable, one is reminded of an aphorism “Swift justice demands more than just swiftness” (Justice Potter Stewart, US Supreme Court). It was obligatory on the part of the Council not only to investigate the truth of the later MOU, but also satisfy itself that the basis of the complaint, i.e., that amounts were appropriated and lower amounts were paid into the accounts of Service tax authorities, were established objectively through documentary material. The findings recorded - from the state of the record, are such that they cast a slur on the professional integrity of the respondent, without proof of essential foundational facts. In the light of the above discussion, this court is of opinion that the matter requires to be gone into afresh by the Council. Having regard to the gravity of the allegations, it is but appropriate that the Council considers all the relevant materials, including the documents and the deposition of the complainant before preparing a fresh report. Accordingly, this court hereby in exercise of its jurisdiction, under Section 21 (6) (d) refers the case to the Council for further inquiry and report. The Council shall complete its task expeditiously and in any case within 6 months. The respondent is directed to present himself before the Council for further proceedings within three weeks from today. The Council shall complete the task, firstly by summoning the complainant, recording his deposition, and, thereafter proceeding to inquire into the material documents.
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