TMI Blog2003 (1) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... If proprietary concerns of chartered accountants are really inefficient, there appears no reason why they have been made eligible to audit Government and public sector undertakings in the aforesaid States. Further, if there was a paucity of partnership firm of chartered accountants in a given State, the services of partnership firms, who were said to be efficient based in other States could be taken. Under such circumstances, we are of the view that the impugned notification does not stand the test of article 14 of the Constitution. - CIVIL APPEAL NO. 11458 OF 1995 - - - Dated:- 21-1-2003 - V.N. KHARE, ASHOK BHAN AND S.B. SINHA, JJ. Ranjit Kumar, S. Wasim A. Qadri, and Mrs. Anil Katiyar for the Appellant. JUDGMENT V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s listed therein only need apply 4. (d) The proforma should be signed by a partner on behalf of the firm ... proprietary firms of F. C. As with registered offices in the following States only are being considered for audit in those States : Orissa, Jammu and Kashmir, Assam, Manipur, Meghalaya, Nagaland, Tripura." (emphasis supplied) The respondent herein submitted an application for enrolment on the panel, but the same was rejected on account of the fact that his firm was not a partnership firm, but a proprietary concern. Aggrieved, the respondent filed a writ petition under article 226 of the Constitution challenging the exclusion of proprietary concerns from their empanelment as being discriminatory, arbitrary and violative of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions for empanelment in connection with entrustment of audit work of Government companies, the respondent is enjoined to see that it does not insist in continuing the artificial sub-classification of chartered accountants who are carrying on profession as chartered accountants in partnership .... with costs." The appellant filed a Letters Patent appeal before the Division Bench of the High Court, but the same was dismissed. It is against the said judgment and order of the High Court that the appellant is before us. It was first contended by learned counsel for the appellant that the appellant's decision to invite applications exclusively from partnership firms was a matter of policy and, therefore, beyond the pale of review by this cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation would be seen to pass the test of reasonableness on account of the intelligible differentia between partnership firms on the one hand, and proprietary concerns on the other in terms of factors such as size, flexibility and continuity. It was also submitted that the said differentia bore a reasonable nexus to the object which was sought to be achieved by the impugned advertisement, namely the efficiency and effective auditing of Government companies. To substantiate the point, reference was made to such instances as the ability of one partner to substitute or supplement another in an exigency; the continuity of the partnership firm normally assured upon the demise of one of the partners, if not in law then in practice ; the inabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst only for the reason that he has chosen to act alone in the professional career and has not been able to form a partnership firm. The efficiency, as pointed out by the High Court, springs from the personal experience, proficiency and personal capacities. It is, therefore, not possible to link these characteristics and professional acumen to a person or persons in a firm alone. A single individual as an auditor in a proprietary concern can have such characteristics and professional acumen by himself and also through the assistance of an experienced auditor who could be in his services as efficient as any partnership firm. It is often seen in many cases that some of the partners of the partnership firm are sleeping partners with no profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation seeking an audit of its accounts or an individual seeking a remedy in court. A clear line of command is also known to prevent a diffusion of responsibility. As such, a chartered accountant cannot be discriminated against merely because he elected to invest his professional expertise in a proprietary concern, rather than to express it in the form of a partnership firm. In any event it would not follow as a categorical imperative that a partnership is better placed for auditing Government concerns simply because "two minds are better than one". There could be several instances when a partnership firm, which is ostensibly an association of contributing individuals, is in actual fact found to consist of a solitary working partner wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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