Facts of the Case
The disciplinary proceedings arose
from a complaint filed by Shri Vinod K. Kala against CA Munish Mehta, a
practicing Chartered Accountant and partner of a Chartered Accountancy firm at
New Delhi.
The matter was registered as
PR/277/15/DD/285/2015/BOD/287/2017 and examined by the Board of Discipline
constituted under Section 21A of the Chartered Accountants Act, 1949 read with
the Chartered Accountants (Procedure of Investigations of Professional and
Other Misconduct and Conduct of Cases) Rules, 2007.
Upon examination of the complaint
and material on record, the Board of Discipline had earlier recorded its
findings holding the Respondent guilty of “Other Misconduct” falling under Item
(2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949
read with Section 22 thereof.
Subsequently, the Respondent
challenged the findings before the Hon’ble Delhi High Court and obtained an
interim stay, due to which the disciplinary proceedings remained pending.
Issues Involved
- Whether the Respondent was guilty of “Other
Misconduct” under the First Schedule to the Chartered Accountants Act,
1949 as already recorded by the Board of Discipline.
- Whether the disciplinary proceedings could be
concluded after the interim stay granted by the High Court was vacated.
- What penalty was appropriate in view of the gravity
of misconduct and mitigating circumstances.
Petitioner’s Arguments
The Petitioner submitted that the
Respondent had acted in violation of professional ethics and standards
prescribed under the Chartered Accountants Act, 1949.
It was contended that the conduct
of the Respondent amounted to “Other Misconduct” and justified disciplinary
action as per the statutory framework governing the profession.
The Petitioner relied upon the
findings already recorded by the Board of Discipline holding the Respondent
guilty.
Respondent’s Arguments
The Respondent had earlier
approached the Hon’ble Delhi High Court and obtained an interim stay against
the Board’s findings. The High Court subsequently vacated the interim stay and
directed the disciplinary authority to conclude the proceedings.
At the final hearing before the
Board of Discipline, the Respondent did not dispute the findings of misconduct
and requested the Board to take a lenient view.
The Respondent submitted that he
was facing adverse professional, economic and medical circumstances and prayed
that these aspects be considered while determining the penalty.
Court Order / Findings of the
Board of Discipline
The Board of Discipline considered
its earlier findings, the directions of the Hon’ble Delhi High Court vacating
the interim stay, and the submissions made by the Respondent.
After evaluating the gravity of
the misconduct and the mitigating factors pleaded, the Board exercised its
powers under the Chartered Accountants Act, 1949 and the applicable Rules.
The Board imposed a monetary
penalty of Rs. 10,000 (Rupees Ten Thousand only) on CA Munish Mehta.
Important Clarification
This order clarifies that
disciplinary findings under the Chartered Accountants Act, 1949 remain
operative once judicial stay is vacated, and the disciplinary authority is
duty-bound to bring the proceedings to their logical conclusion.
The order also underscores that
while personal and professional hardships of the Respondent may be considered
for determining the quantum of penalty, they do not absolve the Respondent of
established professional misconduct.
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