COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA Vs. JNANENDRA NATH SAIKIA, A.C.A., CHARTERED ACCOUNTANTS

JUDGEMENT

(1.) THIS is a case for orders of this Court under Section 21, Chartered Accountants Act, 1949. The respondent is a chartered accountant practising at Jorhat. He was appointed auditor by the Golaghat Bijuli Supply Company Ltd. for the year ending 30 -6 -50. Mr. Majumdar, another chartered accountant, complained that in accepting the appointment, the respondent had contravened the provisions of Clauses (h) and (i) of the schedule to the Chartered Accountants Act, 1949. The Secretary of the Council, on receiving the complaint, asked the respondent to put in his written statement. Having obtained the written statement from him placed the matter before the Council in its meeting held on 16 -9 -50.

(2.) THE facts of the case are admitted. There is no dispute about them. In the first Ordinary General Meeting of the Company, an auditor was appointed. The complainant, Mr. Majumdar, was the auditor. In the second Annual General Meeting, no auditor at all was appointed. The meeting was held on 7 -3 -50. The Company informed the respondent by their letter on 26 -9 -51 that he had been appointed auditor for the year ending 30 -6 -50. The respondent, by his letter, dated 23 -10 -51 enquired from the Company before accepting the appointment whether notice of his nomination as auditor had been given by the company to the retiring auditor as well as to the Members. The Company informed the respondent by their letter, dated 26 -10 -51, that no auditor had been appointed at the previous annual general meeting.

(3.) THE requirement of Section 144(3) is mandatory. The Company has to appoint at its annual general meeting an auditor for the ensuing year. It is admitted that this appointment was not made. The Company, therefore, failed to comply with the requirements of Section 144, Clause (3). There can be no controversy about it. The respondent could not fail to realise that the Company had failed in its obvious statutory duty. He was informed that he was being appointed by the Directors. His case before the Disciplinary Committee and before us was that he bona fide believed that the Directors were filling a casual vacancy under Clause (8).