# In the matter of the Counsel of the I.C. A. of India v. Shri R.L. Narula

- **Citation:** (2012) 3 ILRA 1087
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2012-08-22
- **Bench:** Devi Sunil Ambwani, Aditya Nath Mittal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/in-the-matter-of-the-counsel-of-the-i-c-a-of-india-v-shri-r-l-narula-42330
- **Pages:** 5

## Headnote

Chartered Accountants Act,1949Section
21(5)-reference on basis of enquiry
report
the
council
found
guilty
of
professional misconduct-committed by
Respondent-disciplinary committee after
considering each and every aspect found
violation of the provision of Regulation
32-B-decision of Disciplinary Committee
as well as council based on recordconclusion drawn by self speaking order
suffers from no illegality of perversityreference answered against respondent.

Held: Para-17

In the facts and circumstances, as
discussed above, we are of the view that
the
decision
of
the
Disciplinary
Committee as well as of the Council are
based on material on record. Both the
authorities have taken into consideration
all
the
aspects
and
explanations
submitted before it. The conclusions are
drawn by a self-speaking detailed order.
We
do
not
find
any
illegality
or
perversity
in
the
findings
of
the
disciplinary Committee and the Council.
There is no sufficient reason to interfere
with the findings recorded against the
respondent. The reference is liable to be
answered against the respondent.
Case Law discussed:
AIR 1958 SC 72

## Text

3 All] In the matter of the Counsel of the I.C. A. of India V. Shri R.L. Narula
1087
SPECIAL ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.08.2012

BEFORE
THE HON'BLE DEVI SUNIL AMBWANI, J.
THE HON'BLE ADITYA NATH MITTAL, J.

Reference Case No. - 01 of 1989

In the matter of the Council of the
Institute of Chartered Accountants of
India

...Petitioner
Versus
Shri R.L.Narula

 ...Respondent

Counsel for the Petitioner:
Sri Vinod Swarup

Counsel for the Respondents:
Sri V.K.Singh
Sri A.K.Srivastava
Sri K.K.Shangloo
Sri R.B.Singhal

Chartered Accountants Act,1949Section
21(5)-reference on basis of enquiry
report
the
council
found
guilty
of
professional misconduct-committed by
Respondent-disciplinary committee after
considering each and every aspect found
violation of the provision of Regulation
32-B-decision of Disciplinary Committee
as well as council based on recordconclusion drawn by self speaking order
suffers from no illegality of perversityreference answered against respondent.

Held: Para-17

In the facts and circumstances, as
discussed above, we are of the view that
the
decision
of
the
Disciplinary
Committee as well as of the Council are
based on material on record. Both the
authorities have taken into consideration
all
the
aspects
and
explanations
submitted before it. The conclusions are
drawn by a self-speaking detailed order.
We
do
not
find
any
illegality
or
perversity
in
the
findings
of
the
disciplinary Committee and the Council.
There is no sufficient reason to interfere
with the findings recorded against the
respondent. The reference is liable to be
answered against the respondent.
Case Law discussed:
AIR 1958 SC 72

(Delivered by Hon'ble Aditya Nath Mittal, J.)

1. This reference has been filed
under Section 21(5) of the Chartered
Accountants Act, 1949 (hereinafter called
the 'Act' for short) in respect of R.L.
Narula, Chartered Accountant.

2. The facts of the case are that R.L.
Narula, Chartered Accountant, failed to
pay stipend due to his articled clerk,
Neeraj Kumar Jain, as required by
Regulation
32-B
of
the
Chartered
Accountants
Regulations,
1964
(hereinafter called the 'Regulations' for
brevity). The Council of the Institute of
Chartered Accountants of India, upon
enquiry, came to the conclusion that the
respondent was guilty of professional
misconduct and, accordingly, referred the
case to the Disciplinary Committee.

3. The Disciplinary Committee, after
hearing
the
parties
and
recording
evidence, came to the conclusion that the
respondent had violated the provision of
Regulation 32B of the Regulations within
the meaning of Sections 21 and 22 of the
Act read with clause (1) of part II of the
Second Schedule to the Act.

4. Considering the report of the
Disciplinary Committee, the Council of
the
Institute
gave
its
finding
and
recommended that the name of the
respondent be removed from the register
of Members for a period of 15 days.
1088 INDIAN LAW REPORTS ALLAHABAD SERIES [2012

5. After receipt of reference, notice
to R.L. Narula, Chartered Accountant,
was issued by this Court, who has
submitted his objections.

6. We have heard Sri Vinod
Swaroop, learned counsel for the Institute
of Chartered Accountants of India, and
Sri K.K. Shangloo, learned counsel for
the respondent.

7.

Learned
counsel
for
the
respondent has submitted that the report
of
the
Disciplinary
Committee
is
erroneous and the charges are not
cogently proved against him. It has also
been submitted that the respondent had
sent the amount of stipend by hand to the
complainant, who refused to accept it.
Subsequently, the same was sent by
registered post, which was also refused by
the complainant. A cheque of Rs.
3,752.50 P. was thereafter sent on
22.6.1987 to the Institute for delivery to
the complainant, which shows the efforts
of payment by the respondent. It has also
been submitted that the Council has
blindly concurred with the erroneous
report of the Disciplinary Committee and
since no stipend was proved to be due any
more to the complainant, hence the
finding of the Disciplinary Committee is
liable to be set aside. It has further been
submitted that if any technical violation of
Regulation 32B of the Regulations is
found by this Court, the respondent is, at
the most, liable to be reprimanded for the
same. The punishment awarded to the
respondent is liable to be set aside and the
respondent should be given the benefit of
doubt.

8. Learned counsel for the applicant
has submitted that the reply of the
respondent is incorrect, misconceived and
contrary to record. As per Regulation 32B of the Regulations, the respondent was
under obligation to make timely payment
of the stipend to the complainant and
efforts
made
by
the
respondent,
subsequent to the complaint made against
him, were nothing but an after thought,
which could not absolve the respondent
from the consequences of violation of
Regulation 32-B of the Regulations.
Regulation 32-B of the Regulations
provides as under :

"32-B -- Stipend to Articled Clerks.

(1) Every member engaging an
articled clerk on or after 1st July 1973
shall pay to such clerk a minimum
monthly stipend at the rates specified in
sub-regulation (2) or in sub-regulation
(3) hereof, as the case may be.

(2) If the normal place of service of
an articled clerk is situated in Bombay,
Calcutta, Delhi, New Delhi, Kanpur or
Madras- the following shall be the
minimum rates of the stipend payable
under Sub-regulation (1) :

(a) In respect of the first year of
articled training ..... Rs 60/- per month

(b) In respect of the second year of
articled training ..... Rs. 100/- per month

(c) In respect of the remaining period
of articled training ... Rs. 150/- per month

(3) If the normal place of service of
an articled clerk is situated in a place
other than the places specified in subregulation (2) hereof, the minimum rates
at which such employer shall pay stipend
under sub-regulation (1) hereof shall be
computed at 50% of the respective rates
3 All] In the matter of the Counsel of the I.C. A. of India V. Shri R.L. Narula
1089
for the various stages of articled training
specified in Sub-regulation (2) hereof :

Provided that nothing contained in
this regulation shall entitle an articled or
audit clerk registered with effect from a
date prior to 1st July 1973, to any stipend
under sub-regulation (2) or (3) hereof.

Explanation : For the purpose of
determining the rate at which stipend is
payable under sub-regulation (2) or subregulation (3) hereof, the period of
articled training of the clerk under any
previous employer or employers (not
being any such period prior to the 1st
July. 1973) shall also be taken into
account.

(4) The stipend under sub-regulation
(2) or (3) hereof, as the case may be, shall
be paid by the member to an articled clerk
either (a) by a crossed account payee
cheque every month against a stamped
receipt to be obtained from the articled
clerk; or (b) by depositing the amount
every month in an account opened by the
articled clerk in his own name with a
branch of the bank to be specified by the
member."

9. The complainant started his
training with effect from 28.2.1984 and a
Savings Bank A/c. No. 3425 was opened
with the Punjab National Bank on
22.1.1985. The said account was closed
on 19.6.1986. It was alleged in the
complaint that R.L. Narula, while getting
the above account opened, got issued a
cheque book bearing cheque Nos. 895541
to 895550 and got all the cheques blankly
signed so that any amount, if deposited in
this account, may be withdrawn by R.L.
Narula.

10. As per provisions of Regulation
32-B of the Regulations, the monthly
stipend was to be paid every month
against a stamped receipt to be obtained
from the articled clerk or by depositing
the amount every month in an account
opened by the articled clerk in his own
name with a branch of the bank to be
specified by the Member. Accordingly,
the first stipend became due on 31.3.1984
and so on. The respondent has alleged that
on 9.5.1987 a draft of Rs. 2,250.50 P. was
sent to the complainant but he refused to
accept it. Later on, the said draft was sent
by registered post on 11.5.1987, which
was also refused by the complainant.
Subsequently, on 22.6.1987, a cheque of
Rs. 3,750.50 P. was sent to the Institute
for delivery to the complainant.

11. It is relevant to mention that the
complaint
was
made
on
28.7.1986
regarding non-payment of stipend, which
was required to be paid on monthly basis.
All the efforts shown by the respondent
started in the month of May, 1987, which
is much latter even after the complaint.
No explanation has been given as to why
the stipend was not paid on monthly basis,
becoming due since 31.3.1984. Certainly,
the respondent could have deposited the
amount of stipend in the S.B. A/c. opened
by the complainant, regarding which the
respondent was having due knowledge.
The complainant has also categorically
stated that no transaction took place in the
said account and an interest of 0.8 paise
and 0.12 paise were credited in this
account upto the date of closure of the
account on 19.6.1986. As mentioned
above, the complaint was made on
28.7.1986, i.e. even prior to the date of
making complaint the stipend was not
either deposited in the S.B. A/c. nor paid
in cash against a stamped receipt.
1090 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
Therefore, the alleged attempt of payment
of stipend to the complainant is wholly
misconceived
and
devoid
of
any
substance.

12. The proceedings regarding
professional misconduct are not a civil
proceeding,
but
a
quasi-judicial
proceedings. The test applicable to prove
the guilt of a charged person should be
applied in such proceedings. In the instant
case there appears to be no reasonable
doubt about the fact that the respondent
has not paid the monthly stipend to the
complainant in view of Regulation 32-B
of the Regulations. The subsequent efforts
made by the respondent can only be said
to be an after thought with a view to avoid
disciplinary proceeding.

13. In Council of the Institute of
Chartered Accountants and another v. B.
Mukherjea (AIR 1958 SC 72) the Hon'ble
Apex Court, considering the jurisdiction
of High Court under Section 21 of the
Act, has held as follows :

"In hearing references made under S.
21, sub-s. (1), the High Court can
examine the correctness of the finding
recorded by the statutory bodies in that
behalf. The High Court can even refer the
matter back for further inquiry by the
Council and call for a fresh finding. It is
not as if the High Court is bound in every
case to deal with the merits of the finding
as it has been recorded and either to
accept or reject the said finding. If, in a
given case it appears to the High Court
that, on facts alleged and proved, an
alternative finding may be recorded, the
High Court can well send the case back to
the Council with appropriate directions in
that behalf. The powers of the High Court
under S. 21, sub-s. (3) are undoubtedly
wide enough to enable the High Court to
adopt any course which in its opinion will
enable the High Court to do complete
justice between the parties."

14. In our opinion, the Council was
wholly justified to form the opinion that
the respondent was guilty of professional
misconduct. The Disciplinary Committee
for enquiry had afforded full opportunity
of hearing to the respondent and has also
recorded statements made by the parties
and has taken into consideration the
documents produced by the parties. In the
enquiry
report,
the
Disciplinary
Committee has discussed each and every
aspect of the matter at length and has
come
to
the
conclusion
that
the
respondent has not at all taken seriously
the provision of Regulation 32-B of the
Regulations, which required him to pay
the stipend by crossed account payee
cheques every month. The Committee has
also come to the conclusion that the claim
of the respondent that he paid Rs. 4,000/-
to the articles clerk for the period from
1.7.1985 onwards was also not acceptable
to the Committee.

15. The copy of the report of the
Disciplinary Committee was sent to both
the complainant and respondent and they
were
asked
to
send
their
written
representations,
if
any.
Both
the
complainant and the respondent had also
submitted their written representations
dated 25.1.1988 and 5.2.1988 respectively
and both of them appeared in person
before the Council and also made oral
submissions. The report dated 9.9.1987
was considered in 132nd meeting of the
Council on 12.2.1988 and the Council,
after considering the written and oral
submissions of the respondent, did not
find any merit. The Council, concurring
3 All] IN RE V. Shri Anil Kumar Jindal & others
1091
with the conclusion of the Disciplinary
Committee and the reasons given by it,
found that the respondent is guilty of
professional
misconduct
within
the
meaning of Section 21 read with Section
22 of the Act for contravention of
Regulation 32-B of the Regulations in
respect of the charge of non-payment of
stipend
to
the
complainant
and
recommended to this Court that the name
of the respondent be removed from the
register of Members of the Institute for a
period of 15 days.

16. The intendment and object of the
Act is to maintain the standard of the
profession of Chartered Accountant at a
high level and it prescribes certain code of
conduct to the members, which they must
follow.

17. In the facts and circumstances,
as discussed above, we are of the view
that the decision of the Disciplinary
Committee as well as of the Council are
based on material on record. Both the
authorities have taken into consideration
all the aspects and explanations submitted
before it. The conclusions are drawn by a
self-speaking detailed order. We do not
find any illegality or perversity in the
findings of the disciplinary Committee
and the Council. There is no sufficient
reason to interfere with the findings
recorded against the respondent. The
reference is liable to be answered against
the respondent.

18. As the matter is pending since
long, in the circumstances of the case, the
removal of the name of the respondent
from the Register of Members for a
period of five days would meet the ends
of justice.

19. Accordingly, the reference is
answered in favour of the applicant and
against
the
respondent
with
the
modification that the name of the
respondent shall be removed from the
Register of Members for a period of five
days only.
---------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 10.09.2012

BEFORE
THE HON'BLE DHARNIDHAR JHA, J.
THE HON'BLE ASHOK PAL SINGH, J.

Contempt Application (Criminal) No. 3 of
2012

IN RE

 ...Applicant
Versus
Shri Anil Kumar Jindal & others

 ...Respondents

Counsel for the Petitioner:
A.G.A
Sri A.B.N.Tripathi

Counsel for the Respondents:
Sri V.M.Zaidi
Sri Jitendra Kumar Shishodia

Contempt of Court Act, 1971-Section 19District Consumer Forum whether a
Court?-held-within strict sense of Courtalthough not a Court-but possessing all
trappings like Court-is Court within the
ambit of Section 10 of Contempt Act.

Held: Para-57

In view of the above, we are of the view
that although a District Forum exercising
judicial function under the Consumer
Protection Act is not a Court within the
strict sense of a 'Court' but due to having
all the trappings of a 'Court' is a 'Court'
in the context of Section 10 of the
Contempt of Courts Act.