S GANESAN Vs. A K JOSCELYNE

JUDGEMENT

(1.) This is a reference under Section 21(1), Chartered Accountants Act with respect to a complaint against one Mr. A. K. Joscelyne, who is a partner of Messrs. Lovelock and Lewes, a firm of Chartered Accountants of Calcutta. The Council's finding against him is that in certifying a Profit and Loss Account of a company, called the Deccan Sugar and Abkhari Co., Ltd.. for the year ending on 31-12-1946, as correct and prepared in accordance with law, he has been guilty of misconduct of the varieties mentioned under items (o) and (p) of the Schedule to the Act.

(2.) It appears that from 1946 to 1952, Messrs. Lovelock and Lewes were appointed auditors of the Deccan Sugar and Abhkari Co., Ltd., in each successive year; The work was handled in different years by different partners of the firm. The Managing Agents of the company were another company, called Parry and Co., Ltd. At the time the Indian Companies Act was amended in 1936. the Managing Agents were already holding their office under an agreement which would not expire till 15-1-1957, Nevertheless, in 1946 the managed company came to, think that in view of the expansion of its activities in recent years, it would be advantageous to conclude a fresh agreement with the Managing Agents for a fixed period. With that end in view, the company issued a Circular Letter to its shareholders, dated 30-4-1946, in which it was stated that it was proposed, to enter into a fresh agreement with the Managing Agent for a fixed period of twenty years from 7-6-1946, "on exactly the same terms as to remuneration as they are at present receiving." The Circular Letter then proceeded to state what the existing terms as to remuneration were and the same were set out as follows : --

(3.) Paragraph 1 of the Agreement stated that the company was thereby appointing the then existing Managing Agents to be the Managing Agents as on and from 7-6-1946 "upon the terms and conditions hereinafter expressed." Paragraph 3 set out the terms and conditions. In so far as material, it was provided that the Managing Agents would receive