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Council of the Instt. Of Chartered Accountants of India Versus Anil Kumar & Anr.

2017 (2) TMI 77 - DELHI HIGH COURT

Guilty of misconduct as defined under Clauses 5, 6, 7 and 8 of Para I of the 2nd Schedule to the Chartered Accountants Act, 1949 - false audit report - justification of audit report for the year 2001-02 in which the amount deposited by the complainant with the society was certified to be ₹ 3.88 lacs as against ₹ 6.88 lacs certified in the audit reports for the two previous years - Held that:- Having perused the reply we find not a word uttered in the reply to counter the conclusions .....

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It has not been explained in the reply as to under what circumstances for the previous two years the respondent certified that the complainant had made a deposit totalling ₹ 6.88 lacs. - Under the circumstances we accept the finding returned by the Disciplinary Committee as approved by the Council. Keeping in view the gravity of the misconduct the proposed penalty is also accepted. - The reference is disposed of levying penalty of removal of name of the respondent from the Institut .....

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ard learned counsel for the petitioner. 3. Avtar Vinayak, the complainant and a member of Hilansh CGHS Cooperative Group Housing Society made a complaint against M/s.Anil Garg & Co. informing in the complaint that Anil Garg & Co. were the auditors of the society and had audited the account of the society for the financial years 1999-00, 2000-01, 2001-02, and 2002-03. The audit reports for the years 1999-00 and 2000-01 certified that ₹ 6.88 lacs was deposited by the complainant and .....

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6. Respondent thereafter submitted his comments on the pleadings on October 31, 2006. 5. In accordance with Regulation 12(11) of the Chartered Accountants Regulations, 1988 the papers were forwarded to the Council, which at its meeting held on February, 2008 opined that prima facie case to conduct an inquiry was made out. Matter was thereafter referred to the Disciplinary Committee of the Council. 6. The Disciplinary Committee heard the parties and submitted a report on February 02, 2009. The fi .....

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t has taken three contradictory stands (a) Mr.Avtar Vinayak has wrongly represented his balance ₹ 6,88,000/- and to compensate this error, he issued two cheques Nos.120010 dt. 14.04.2000 for ₹ 1,00,000/- and Ch. No.581767 dt. 30.09.1999 for ₹ 2,50,000/- drawn on Punjab & Sind Bank, Anand Vihar, Delhi which were also bounced and never entered in the books of accounts during his tenure as Secretary, (b) to find out the correct position of members deposit he has gone through t .....

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r. 14.1 As regards the stand taken by the respondent mentioned in point (a) above, the Committee observed, that the ledger account relied upon by the respondent duly reflects the credits and debits in respect of the two bounced cheques of ₹ 2.5 lakhs and ₹ 1 lakh each and at no stage in the ledger account, the balance of the Complainant is reflected as ₹ 6.88 lakhs. The Committee has not been able to understand as to how the respondent certified the balance as on 31st March, 19 .....

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ces on the accounts of eight members aggregating to ₹ 3,00,314/- (as against ₹ 3 lakhs) while the certificate dated 30th May, 2008 of M/s. M.M.Goyal & Co. certifies the difference of ₹ 1 lakh each in three account only. Even the names of three members in the second certificate do not tally with the names of members in the earlier certificate. Therefore, these two certificates also cannot be much credence. The Committee also observed that even if the contention of the respon .....

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es with the Society, especially when the balance of a member was reduced by ₹ 3 lakhs and it was in the knowledge of the respondent that there was a dispute between old and new management of the society. According to the Committee, the circumstances warranted third party confirmation, which the respondent before issuing the audit report ought to have done as a prudent Chartered Accountant. 14.4 The Committee also observed that the respondent has failed to report in his audit report with re .....

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ation that two cheques in sum of ₹ 1 lac and ₹ 2.5 lacs had been returned dishonoured and were not entered in the books of accounts, the Committee brought out that if this be so the amount credited would have to be reduced by ₹ 3.5 lacs and not ₹ 3 lacs. The Committee highlighted that if this was so it was not understood as to how the respondent had certified the balance as of March 31, 1999 and March 31, 2000 in sum of ₹ 6.88 lacs during the audit of the earlier tw .....

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