CHARTERED ACCOUNTANTS OF INDIA Vs. S. GIRIDHARAN

JUDGEMENT

(1.) This is a reference case filed by the Council of the Institute of Chartered Accountants of India (for short 'the Council') under Section 21(5) of the Chartered Accountants Act, 1949 (for short 'the Act',) for consideration of the recommendation made by the Council for removal of the name of the respondent S. Giridharan, a practicing Chartered Accountant, from the register of members, maintained by it, for a period of one year.

(2.) The brief facts of this case are that with regard to the audit report and the balance sheets signed by the respondent a Statutory Auditor of M/s. Great Western Industries Ltd., (for brevity 'M/s. GWIL'), as on 30.09.98, 30.09.99 & 30.09.2000 a complaint was filed by the Superintendent of Police, CBI EOW, Chennai on 18.08.2006 before the Council alleging certain charges against the respondent. To the said complaint, the respondent submitted his written reply on 26.02.2007. To the said reply, the complainant filed a rejoinder on 16.04.2007, to which the respondent submitted his reply on 21.06.2007. The complainant as well as the respondent were heard by the disciplinary committee of the Council. After concluding the hearing on 24.03.2010, the disciplinary committee submitted a report dated 10.06.2010 and recorded a finding that the respondent was guilty of professional misconduct within the meaning of Clauses (5), (6), (7), (8) and (9) of Part I of II Schedule to the Act read with Sections 21 and 22 of the Act. Vide Communication dated 11.10.2010, copies of the report of the disciplinary committee were given to the complainant and the respondent, to which the parties were required to submit their response. Adjournments were granted by the Council and finally on 11.04.2011, the respondent submitted his written representation on the report of the disciplinary committee and the complainant also filed his written representation on 26.04.2011. On 01.09.2011, the petitioner informed the respondent as well as the complainant that the report of the disciplinary committee would be considered in the meeting of the Council to be held from 19th to 21st September 2011. The respondent submitted a written representation on 12.09.2011. As per the extract taken from the minutes of the 310th meeting of the Council held from 19th to 21st September 2011, the Council decided to accept the report of the disciplinary committee holding the respondent guilty of professional misconduct and recommended to refer the matter to the High Court for removal of the name of the respondent from the register of members maintained by the Council, for a period of one year.

(3.) In the complaint lodged by the Superintendent of Police, Central Bureau of Investigation on 18.08.2006, the allegation against the respondent primarily were that he, as a Chartered Accountant of the company GWIL, had connived with the Directors of the Company and for the years 1997-98, 1998-99, did not disclose in the Balance Sheet of the company that the company had availed credit facilities from the Times Bank Limited (subsequently HDFC Bank) and that the balance sheet for the period ending 30.09.2000 was signed without verifying the correct facts and without preparing the audit report, though mentioned to have been annexed. The relevant paragraphs 5, 6, 7, 8 & 9 of the said complaint are re-produced below: