Wholesale Trading Services Pvt. Ltd. v. The Institute of Chartered Accountants of India & Ors.

1. Exemption allowed, subject to all just exceptions.

2. The applications stand disposed of.

1. This Letters Patent Appeal has been preferred by the original petitioner, whose W.P.(C) 8081/2019 was dismissed by the learned Single Judge vide order dated 1st August, 2019 (Annexure A-1) with costs of ₹ 1 lakh. 2019:DHC:4492-DB

2. Factual matrix  This appellant is the original petitioner, who had preferred W.P. (C) 8081/2019 challenging an order, dated 1st February, 2019, passed by Board of Discipline constituted under the Chartered Accountants Act, 1949 (hereinafter referred to as “Act, 1949”) to be read with the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 (hereinafter referred to as “Rule, 2007”). The impugned order of the Board of Discipline, dated 1st February, 2019 (Annexure A-3 to the memo of this LPA), is under challenge, along with the order passed by the Director (Discipline), dated 24th September, 2018 (Annexure A-4).  This appellant is Wholesale Trading Services Pvt. Ltd. The person who has filed this writ petition has the general authority, as alleged by this appellant, to file complaint under Rule 3(4) of the Rules, 2007. This appellant submits that it is engaged amongst other things, in the business of trading of agricultural commodity, along with other goods.  This appellant (original petitioner) had filed a complaint on 26th September, 2016 (Annexure A-6) against Respondent No. 3 – Chartered Accountant Sh. Jayesh M. Gandhi who is a member of the Institute of Chartered Accountants of India and is a practicing chartered accountant. It is alleged in this complaint that the accounts and audit reports in respect of the following seven companies have not been prepared in compliance with the provisions of the Companies Act, 1956, and as per the directions issued by the Reserve Bank of India in respect of Non-Banking Financial Institutions. The seven companies are:

(i) Napean Trading and Investment Company Private

(ii) Prazim Trading and Investment Company Private

(iii) Regal Investment and Trading Company Private Limited,

(iv) Tarish Investment and Trading Company Private Limited,

(v) Vidya Investment and Trading Company Private Limited,

(vi) Zash Investment and Trading Company Private Limited,

(vii) Hasham Investment and Trading Company Private

Limited.  The audit reports and the accounts referred to by this appellant (original petitioner) were in respect of the following four financial years: (i) 2005-06 (ii) 2006-07 (iii) 2007-08 and (iv) 2008-09  These accounts pertained to the aforesaid seven private companies, and were certified by a firm of chartered accountants, M/s N.M. Raiji & Company. Mr. Jayesh M. Gandhi was a partner of the said firm of chartered accountants.  The complaint was filed on 26th September, 2016, which is after seven years of the audit report of the last financial year, 2008-09, for the aforesaid seven companies.  This appellant (original petitioner) has nothing to do with those seven companies. This appellant (original petitioner) is totally a stranger to the aforesaid seven companies, for the audit of which the complaint is filed.  As per the procedure delineated in the Rules, 2007, Director (Discipline) gave his prima facie opinion on 24th September, 2018 (Annexure A-4), that the complaint filed by this appellant, who is a complete stranger to the aforesaid seven companies, has filed the said complaint seven years past the last audit reports, which were for the financial year 2008-09, and looking at the written statement filed by Mr. Jayesh M. Gandhi, such a delay is beyond the period, as mentioned in Rule 12 of the Rules, 2007.  Earlier, the writ petition, as preferred by this appellant (original petitioner), being W.P. (C) No. 4873/2017, which was dismissed by this Court, against which LPA 440/2017 was preferred, was decided by this court vide order dated 24th August, 2017 observing, prima facie, that opinion should be given within a period of eight weeks and, further proceedings be completed within a period of six weeks thereafter.  Hence, Director (Discipline) has given a prima facie opinion under Section 21A of the Chartered Accountants Act, 1949 and Board of Discipline has also passed an order dated 1st February, 2019 (Annexure A-3), stating therein that the complaint is time barred, looking to the nature of the complaint and the written statement filed by Mr. Jayesh M. Gandhi, and looking to the provisions of the Act, 1949 read with the Rules, 2007.  Being aggrieved and feeling dissatisfied by the order of the Board of Discipline dated 1st February, 2019 (Annexure A-3) and also being aggrieved by the order of the Director (Discipline) dated 24th September, 2018 (Annexure A-4), this appellant had preferred W.P.(C) 8081/2019.  As W.P.(C) 8081/2019, preferred by this appellant, was dismissed by the learned Single Judge by order dated 1st August, 2019, the original petitioner has preferred the present Letters Patent Appeal.

3. Arguments canvassed by counsel for the appellant (original petitioner)  Counsel appearing for the appellant submitted that as per Rule 3(4) of the Rules, 2007, this appellant has general authorisation to make a complaint and as per Rule 3(4) of the Rules, 2007, there is no need of any specific authorisation.  It is further submitted by counsel for the appellant (original petitioner) that there is no mathematical bar under the Rules, 2007 to file a complaint against a chartered accountant.  It is further submitted by counsel for the appellant (original petitioner) that law does not require any locus and hence, even if this appellant has nothing to do with the aforesaid seven companies, a complaint can still be filed.  Counsel for the appellant has placed reliance upon a decision rendered by Hon‟ble the Supreme Court reported at (1983) 4 SCC 131 Narendra Singh v. Chhotey Singh & Anr. Paragraph 12 thereof reads as under: “12. Apart from this, a comprehensive view of the legislation as a whole would show that the Bar Council of India exercises general supervision and control over State Bar Councils and Disciplinary Committee of State Bar Council is a creature of State Bar Council. Bar Council of India enjoys all ancillary and incidental powers for efficiently discharging and carrying out functions prescribed in Section 7. The question of jurisdiction has to be viewed in this broad perspective and not from any narrow or constricted view which one may take in a private dispute between two individuals. A disciplinary proceedings against a member of a profession whose services are made available to society as a whole is to be viewed as between the profession and its erring member and not between the complainant and the delinquent advocate. This larger perspective must determine the jurisdiction of the bodies set up to carry out the purposes of the Advocates Act.”

4. Reasons  Having heard counsel for the appellant (original petitioner) and looking to the facts and circumstances of the case, we see no reason to entertain this Letters Patent Appeal, mainly for the following facts and reasons:

(i) This appellant is an original petitioner whose W.P.(C)