In the matter of Shadi Lal Batra v. . — 1967 DIGILAW 49 (DEL)

Judgement JUDGEMENT :- This case has been placed before us under Section 21 of the Chartered Accountants Act No. XXXVIII of 1949 with a recommendation of the Council of the Institute of Chartered Accountants of India (hereinafter called the Council) that Shri Shadi Lal Batra, F.C.A. Chartered Accountant, has been guilty of misconduct in the discharge of his professional duties. 2. It appears that in July, 1959, the Council received a complaint dated 30-6-1959 from the Sterling Electrical Traders Corporation, Private Limited through its Director Shri B D. Dhingra against M/s. Batra and Company. Chartered Accountants, New Delhi. After several unsuccessful attempts by the Council to have a reply from Shri S.L. Batra to the allegation in the complaint, the Council considered the matter in September, 1960 and decided to refer the case to the Disciplinary Committee for enquiry because the Council was prima facie of opinion that Shri Batra was guilty of professional or other misconduct. The Disciplinary Committee held its sitting in January, 1961 at New Delhi and after examining a number of witnesses, recorded its report, the findings whereof were summarised in the following words :- "The respondent's contention that the audit of the complainant's accounts was not completed towards the end of February 1959 but that only certain preliminary checking of accounts was done by a junior assistant cannot be accepted. There is before us the copy of the Balance Sheet admittedly typed by the respondent's staff, at his office and containing an unqualified report thereon (unsigned) produced by the complainant. There is also the reminder dated 2-3-1959 sent by the respondent to the complainant regarding his bill for Rs. 300/-. There is and can be no explanation to an unqualified report appended to the Balance Sheet produced by the complainant and the version of the respondent that this was also typed in a mechanical fashion in his office even before the audit had really commenced does not merit serious consideration. The attempt of the respondent to establish that the complainant failed to afford him facilities for completing his audit has also failed. "Another point which we are constrained to note in this case is that in spite of several opportunities given to the respondent between August, 1959, and March, 1960 the respondent has failed to file a written statement to the complaint against him. "Another point which we are constrained to note in this case is that in spite of several opportunities given to the respondent between August, 1959, and March, 1960 the respondent has failed to file a written statement to the complaint against him. This attitude of his has been unhelpful and dilatory in the matter of this enquiry. It is, therefore, clear that the respondent raised several queries and wrote several letters to the complainant with a view to making him agree to the audit fee of Rs. 300 which the complainant was not prepared to accede to." 3. On behalf of the respondent Chartered Accountant, it has been argued that the evidence on the record does not justify the findings contained in the report and it is emphasised that the Disciplinary Committee has ignored that in cases involving professional misconduct in which punishment is imposed the charge should be clearly established and unless there is reasonable doubt about the guilt of the Accountant concerned no penalty should be imposed. 4. 1 may now turn to the facts of the case as seem to us to be supportable on the material on the record. Messrs. Batra and Co. (hereinafter called the Company) were elected as auditors of the Sterling Electrical Traders Corporation Private Ltd., (hereinafter called the Corporation) on 24-2-1958 for the current year on a remuneration to be fixed later by the Board of Directors. In the Trading and Profit and Loss Account for the year ending 30-9-1958, the audit fee for the current year was entered as Rs. 300. It is common case of the parties that for the preceding year, the audit fee was Rs. 150. On 2-3-1959, the Company reminded the Corporation about payment of Rs. 300 on account of audit fee for the year ending 30-9-1958 and of Rs. 100 on account of income-tax representation fee for the assessment year 1958-59. On 16-3-1959, the Company required further clarification from the Corporation in regard to their accounts, the audit of which was conducted by the former. This was well within the competence of the Company, argues Shri Bhagirath Das. On 7-4-1959, the Corporation acknowledged receipt of this letter and expressed surprise at its contents, it being observed that since the audit of the accounts had already been completed in every respect and all the books examined, it was not understood under what circumstances this enquiry was necessitated. On 7-4-1959, the Corporation acknowledged receipt of this letter and expressed surprise at its contents, it being observed that since the audit of the accounts had already been completed in every respect and all the books examined, it was not understood under what circumstances this enquiry was necessitated. It was asserted that even the balance-sheet duly sent by the Company for adoption and signatures by the Corporation had been returned for the signatures of the auditors. Visit from the Company was invited for the purpose of inspecting the relevant books of account and other documents of the Corporation. Emphasis was laid on the fact that the last date for holding the annual general meeting under the Companies Act was fast approaching and it was requested that early steps should be taken to finalise the audit. Shri Bhagirath Das points out that the Corporation did not care to give the details required, though the offer was made for the inspection of the relevant books of account and other documents. On 8-4-1959. the Company sent a further reminder to the Corporation about the payment of Rs. 100 in connection with the income-tax representation fee for the assessment year 1958-59, for which the bill had already been sent. On 9-4-1959 the Company acknowledged receipt of the letter dated 7-4-1959, and replied by saving that the audit is to be deemed to be complete only when the auditors sign the statements of accounts. The statements of accounts sent by the Corporation to the Company for the latter's signatures were described as unauthenticated documents because they were not signed by any one nor were they adopted by the Board of Directors in accordance with Section 251 of the Companies Act, 1956. Attention was specifically invited to Section 215(3) of the said Act. Ignorance about adoption of the statements of accounts by the Board of Directors was expressed in this letter and it was pointed out that this matter had been raised even in the letter dated 16-3-1959. Examination of books of account was stated to be unnecessary as they had already been examined thoroughly. A request was made to the Corporation to send to the Company a list of books of account maintained by the Company, on receipt of which if some more books remained unexamined and required examination, time would be fixed up for doing the needful. A request was made to the Corporation to send to the Company a list of books of account maintained by the Company, on receipt of which if some more books remained unexamined and required examination, time would be fixed up for doing the needful. Delay, it was pointed out, was due to non-compliance of the provisions of law by the Corporation and its Directors. The information or explanation requested in the letter dated 16-3-1959 was stated to be in accordance with the provisions of Section 227 of the Companies Act and early compliance was requested. On 14-4-1959, the Corporation acknowledged receipt of this letter and expressed willingness to co-operate and to supply full information. A number of books maintained by the Corporation were mentioned in this letter and it was stated that these had already been inspected by the representative of the Company. A request was made for the return of the copies of the statement of accounts so that they may be got adopted by the Board of Directors as advised by the Company. Referring to the enquiry made by the Company in the letter dated 16-03-1959. It was stated, inter alia as under :- '(i) We enclose herewith a copy of the Resolution passed by the Company in the Annual General Meeting appointing you as its Auditors for the year ending 30-9-1958. (ii) The last general meeting was held on 24-2-58 and a notice for the same was duly sent to you by post, (iii) Provisions of Section 314 of the Companies Act, 1956 were duly complied with in connection with the holding of the office of profits by the two Directors A copy of the resolution passed in respect thereof is enclosed herewith. (iv) No amount of audit fee was fixed at the last general meeting as it was presumed that the audit fee would remain the same Furthermore, no indication for any change in the amount of audit fee from your end substantiates the presumption. (v) As has been requested above, please send us the statement of accounts for the year ending 30-9-58 for adoption by the Board. * * * * *" I have repeated only what has been considered necessary by the learned counsel al the bar for the purposes of the present dispute. (v) As has been requested above, please send us the statement of accounts for the year ending 30-9-58 for adoption by the Board. * * * * *" I have repeated only what has been considered necessary by the learned counsel al the bar for the purposes of the present dispute. This letter concluded with the hope that the information furnished would enable the Company to finalise the matter at their earliest. On 15-4-1959, the Company returned to the Corporation the statements of accounts requesting that the remaining information may be given soon enough so that the representative of the Company may visit the office of the Corporation and finalist the audit. This letter was acknowledged by the Corporation as per letter dated 21-4-1959 and certain inaccuracies in the Trading and Profit and Loss Accounts statements prepared by the Company were pointed out. The Trading and P and L Account together with the balance-sheet duly prepared afresh was sent to the Company for confirmation and return for adoption by the Board. It was further intimated that the remuneration of the Company was increased to Rs. 200 for the year ending 30-9-58, it being recited that this had already been communicated to the Company and consent obtained on telephone. A provision for Rs. 200 as fee payable to the Company was stated to have been made in the balance-sheet. Trial balance-sheet for the year 30-9-1958. list of loans and advances and details of sundry debtors were also enclosed with the letter. Hope was expressed that it would be convenient for the Company to pay a visit to the office of the Corporation at the earliest convenience to finalise the audit. On 23-4-1959, the Company acknowledged this letter and wrote back that the statements of accounts returned by the Corporation had not vet been adopted by the Board of Directors which was desirable The discrepancies, if any, it was pointed out, should be removed before adoption by the Board and for the report of the auditors. With this remark, the statements of accounts were returned to the Corporation for further action. It was pointed out that adoption of the account; should be expedited in the interest of speedy finalisation of the audit. On 25-4-1959. With this remark, the statements of accounts were returned to the Corporation for further action. It was pointed out that adoption of the account; should be expedited in the interest of speedy finalisation of the audit. On 25-4-1959. 8 copies each of the Trading and Profit and Loss Account and the balance-sheet passed and adopted at the Board of Directors' meeting held on that day and duly signed by all the Directors were forwarded to the Company by the Corporation and a request was made to finalise the audit at the earliest so that notice of annual general meeting could be issued in time. On 1-5-1959 the Corporation wrote to the Company requesting for return of the account and the balance-sheet for the year ending 30-9-1958. pointing out that notices had to be issued for the annual general meeting proposed to be held on 23-5-1959. On 2-5-1959 the Company acknowledged receipt of this letter and expressed inability to finalise the audit in such a short time. It was, however stated that Mr. M.P. Gupta was being deputed, to quote the exact words. "to take up your work and we will see that the audit is completed as early as possible." On 4-5-1959, the Corporation wrote to the Registrar of Companies, seeking extension of about 2 months' time for compliance of the statutory provisions of law It appears that correspondence was going on between the Corporation and the Registrar of Companies for extension of time for holding the annual general meeting if the shareholders and it was pointed out to the Registrar that the auditors of the Company had taken up the audit of the accounts in hand sometime in the beginning of 1959 but the matter had been lingering on all this while. A copy of the letter dated 2-5-1959 received by the Corporation from the Company was forwarded to the Registrar. On the same day the Corporation acknowledged the letter of the Company dated 2-5-1959 and requested once again to finalise the audit of the accounts so that the Corporation may fulfil the statutory obligations required under the Indian Companies Act. On 6-5-1959 the Corporation wrote to the Company stating that their letter dated 4-5-1959 was opened by some member of the staff of the Company and after copying put the letter, the peon of the Corporation was asked to go back. On 6-5-1959 the Corporation wrote to the Company stating that their letter dated 4-5-1959 was opened by some member of the staff of the Company and after copying put the letter, the peon of the Corporation was asked to go back. The matter being urgent, the Corporation requested the Company to send a representative for completing up the work. On 7-5-1959 a telegram was sent by the Corporation to the Company acknowledging receipt of the letter dated 2-5-1959 and it was pointed out that the visit of the representative of the auditors was awaited and that completion of audit was being unnecessarily delayed. The auditors were informed that responsibility would be theirs. On the same day a letter was written by the Corporation to the Company confirming the despatch of the telegram. On 8-5-1959, the Company acknowledged the letters dated 4-5-1959 and 6-5-1959 as also the telegram. They still alleged that the Corporation was not cooperating with the auditors and it was pointed out that Mr. Gupta and Mr. Batra had both visited the office of the Corporation but they were merely told that the audit had been finalised and the Company was employing only delaying tactics. On 15-5-1959, the Corporation acknowledged this letter which was stated to have been delivered to them only on that date. This delay, according to this letter, was due to the fact that the Company had given incomplete address of the Corporation on the envelope. Visit of Mr. Gupta on 29-4-1959, 1-5-1959 and 5-5-1959 was denied; 90 was the allegation of the visit of Mr. Batra on the morning of 7-5-1959. The Information required by the Company was then supplied to. In the end, it was hoped that the information given would enable the Company to return to the Corporation the balance-sheet and the Profit and Loss Account duly signed. Whatever objections were desired to be made, could be appended to the balance-sheet to enable the Corporation to present the same to the shareholders in the annual general meeting. On 16-5-1959, the Company expressed surprise on the denial by the Corporation of the visits of Mr. Gupta and Mr. Batra on 7-5-1959. Whatever objections were desired to be made, could be appended to the balance-sheet to enable the Corporation to present the same to the shareholders in the annual general meeting. On 16-5-1959, the Company expressed surprise on the denial by the Corporation of the visits of Mr. Gupta and Mr. Batra on 7-5-1959. It was, however, complained that the Corporation had ignored the request of the Company for the production of the relevant minute-book for examination and had failed to give the requisite information to the Company whether or not the special resolution had been filed with the Registrar of Companies and if so, on what date and also as to when the filing-fee had been paid. It was further pointed out that a request had been made to advise the Company whether any agenda had been issued for the particular special resolution and if so. a copy thereof with the annexures thereto was required for the Company's record. This was stated to be proof of denial of necessary cooperation on the part of the Corporation which delayed the audit unnecessarily. On the same day, the Company wrote to the Registrar of Companies, New Delhi, in answer to his letter dated 13-5-1959 and explained the difficulty in finalising the audit of the Corporation. In this letter the Company sought the assistance of the Registrar in finalising the audit of the Corporation. On 19-5-1959 the Corporation wrote to the Company acknowledging letter No. 22406/145B dated 16-5-1959 delivered by the peon of the Company at the office of the Corporation at 3 P.M. on 19-5-1959. In this letter, it is pointed out that the Corporation had been affording all necessary facilities to the Company to finalise the audit and assurance was given that Shri Batra and Shri Gupta were most welcome to visit the office of the Corporation and all books and documents would be placed at their disposal for the purpose of finalising the audit. It was also pointed out that the special resolution in question had been examined by the Company while conducting the audit for the previous year ending 30-9-1957 and the balance-sheet and the Profit and Loss Account for that year were signed by the Company without any objection about the special resolution. It was in the circumstances stated not to be proper to withhold the balance-sheet and the Profit and Loss Accounts on this plea. It was in the circumstances stated not to be proper to withhold the balance-sheet and the Profit and Loss Accounts on this plea. It was again reiterated that the annual general meeting of the Corporation had to be held before 24-5-1959 and a request was made to return immediately the aforesaid documents duly signed. The letter ended with a request to the Company to send a representative to the office of the Corporation in connection with the finalisation of the audit. A copy of this letter was forwarded to the Registrar of Companies New Delhi the Secretary to Government of India, Ministry of Commerce and Industry, Law Admn (Cos), New Delhi, and the Secretary, Institute of Chartered Accountants of India, New Delhi, for favour of information and necessary action. This was stated to be in continuation of the earlier letter dated 15-5-1959 addressed to the Company with a copy to these three departments. On 23-5-1959, the Corporation seems to have addressed a letter to the Secretary, Institute of Chartered Accountants of India, New Delhi, in which reference was made to the copies of the letters of the Corporation to the Company dated 15-5-1959 and 19-5-1959 forwarded to the Secretary of the Institute and all the controversy with the Company was stated in detail. In the end, it was prayed that in the interest of justice, the Secretary may guide and advise the Corporation as to how M/s. Batra and Co. could be induced to perform their duty towards the Corporation. It was added that in order to meet the ends of justice, an investigation into the entire episode may be ordered. An interview in this connection was also sought for further explaining the matters. This, I may point out, appears to mark the beginning of the complaint, out of which the present proceedings have arisen. On 27-5-1959, the Company sent to the Corporation statements of accounts as made up to 30-9-1958 duly signed by the auditors along with a separate report of the same date annexed thereto. This letter contained a note expressing displeasure at the denial by the Corporation of the visits of Shri Batra and Shri Gupta to the office of the Corporation and pointing out that the company had mentioned in a separate report the fact of the information sought from the Corporation having been withheld. This letter contained a note expressing displeasure at the denial by the Corporation of the visits of Shri Batra and Shri Gupta to the office of the Corporation and pointing out that the company had mentioned in a separate report the fact of the information sought from the Corporation having been withheld. On 29-5-1959, the Corporation thanked the Company for the letter dated 27-5-1959, and acknowledged receipt of two copies each of the balance-sheet and Profit and Loss Account and the report of the auditors to the share-holders of the Corporation and the revised bill for Rs. 200. A request was made for sending to the Corporation the remaining copies of the balance-sheet and Profit and Loss. Account duly signed by the Company for the purpose of submitting the same to the Registrar of Companies and various other Authorities as required by the Companies Act. It was also stated that the revised bill for audit fee of Rs. 200 had been passed for payment and a cheque for the said amount would be sent to the Company immediately on receipt of the balance copies of the balance-sheet and profit and Loss Account duly signed by the Company. Visits of Shri Batra and Shri Gupta to the office of the Corporation, as alleged by the Company, was again denied, it being pointed out that there was no point in the Corporation withholding any Information or refusing to show to the Company the minute books. In the end it was emphasised that the remaining copies of the balance-sheet etc. should be sent so as to enable the Corporation to forward the cheque on account of the audit fee. On 30-6-1959, a formal complaint was presented to the Council of the Institute of Chartered Accountants against the Company in which reference was made to the earlier letter dated 23-5-1959. Before referring to the oral evidence in the case, it is desirable at this stage to mention two documents to which reference may have to be made at a later stage. There is one chit Exhibit 48 at p. 138 of the record, torn and then joined up bearing the date 23-5-1959 addressed by one Balraj Kishan to Batra Sahib. The purport of this chit is to note the visit of Mr. Batra to the office of the Corporation on 7-5-1959. The writer Shri Balraj Krishan was supposed to be sitting there. The purport of this chit is to note the visit of Mr. Batra to the office of the Corporation on 7-5-1959. The writer Shri Balraj Krishan was supposed to be sitting there. It is further stated that soon thereafter Mr. Dhingra came whereupon the writer Shri Balraj Krishan left the office of the Corporation. The writer however, could not say as to what talk took place between Mr. Batra and Mr. Dhingra. The other document is Exhibit 13 dated 26-5-1959 also written by Shri Balraj Krishan Sood on the printed letterhead of ''Balraj Krishan Sood Contractor" addressed to Shri Dhingra. This document is at p. 89 of the record. Shri Balraj Krishan Sood in his evidence before the Disciplinary Committee deposed that these two documents were dictated to him by Shri S.L. Batra, who was a close friend of his and in whom he was very much interested and indeed he had helped Shri Batra both financially as well as in the matter of getting clients for him. Mr. Sood had indeed gone to Shri Batra for getting the audit finalised and for the return of the balance-sheet and it was on that occasion that according to his statement on oath, Shri S.L. Batra induced him to write these two documents on the promise of returning the balance-sheet. It is necessary to point out that Shri Sood is a Director of the Corporation and it is perhaps for this reason that he felt interest in both the parties and indeed he had actually stated in his statement that he requested Shri Batra to close the Chapter. To his evidence, I would revert at a later stage. 5. The complaint dated 23-5-1959 received by the Institute of Chaptered Accountants of India on 27-5-1959 summarised the grievance of the Corporation In the following words :- "(a) Messrs Batra and Co. issued to us their bill for the audit fee and subsequent reminders thereto only when they had already completed the audit to their satisfaction. (b) In the ordinary course had we paid them the audit fee arbitrarily fixed by them (which of course we could not do in the face of Boards' resolution to pay Rs. 200.00 nP), they would have returned the Balance Sheet and Profit and Loss Account, duly signed without all the fuss. (b) In the ordinary course had we paid them the audit fee arbitrarily fixed by them (which of course we could not do in the face of Boards' resolution to pay Rs. 200.00 nP), they would have returned the Balance Sheet and Profit and Loss Account, duly signed without all the fuss. (c) instead of pursuing the fair and just course which their profession demands Messrs Batra and Co on the contrary, but deliberately and wilfully, preferred to harass us by adopting dilatory tactics such as repeatedly raisins objections which had already been answered by us. predating letters which actually reached us very late -and deliberately giving insufficient address on the envelopes so that they should reach is very late the object of all these being to prevent us from holding the Annual General Meeting on the 23rd May, 1959 (being the last date to do so) (d) Without ever sending their representative and Shri S.L. Batra to our office (in spite of our ardent desire and repeated requests) for further examining our records Messrs Batra and Co. have stooped to concocting stories to avoid responsibility for their deeds of omission and to justify their calculated delay (e) Apparently the conduct of M/s. Batra and Co in this instance is tantamount to professional misconduct which has been indulged in with the sole object of creating trouble for us Such a behaviour on the part of a man belonging to a noble and honourable profession, could hardly be expected for obviously it casts a slur on the profession". 6. In the written statement on behalf of Shri S.L. Batra Chartered Accountant, it was denied that the audit for the period ending 30-9-1958 had been completed and it was asserted that the only thing which had been done was the routine checking of the accounts as produced by the Corporation for the relevant period Sending of the bill on account of audit fee according to the written statement was not an indication of the finalisation of the audit since several other matters had to be enquired into and explanation received thereof to enable the Chartered Accountant Shri S.L. Batra to finally deal with the matter. Visits of Mr. Gupta and Mr. Visits of Mr. Gupta and Mr. Batra were asserted and it was denied that there was any intention on the Dart of the Chartered Accountant to delay the audit Along with the written statement the document dated 23-5-1959 written by Shri Balraj Krishan Sood was produced and it was pleaded that this document gave a complete lie to the letter dated 26-5-1959 written by Mr. Balraj Krishan Sood to Mr. Dhingra as also the letter dated 28-5-1959 addressed by the complainants to the Secretary of the Institute. The written statement further proceeded to plead that the letter dated 26-5-1959 was fabricated by Mr. Dhingra, it being added that the endorsement certified as true copy was dated 25-5-1959 whereas the letter was dated 26-5-1959. With denial of the other allegations, it was submitted that Shri S.L. Batra Chartered Accountant, the answering respondent, was not guilty of any professional misconduct. This reply is dated 12-1-1961. On 11-1-1961, the Corporation had produced before the Secretary of the Institute of Chartered Accountants certain documents, offering to supply further information, if required. This was done in reply to a letter from the Institute and in continuation of the letter of the Corporation dated 21-12-1960. It was pointed out by the Corporation that no appointment letter had been issued or demanded by Messrs Batra and Co. for the reason that the relevant resolution passed by the shareholders in the general meeting held on 24-2-1958 had been drafted by the auditors Messrs Batra and Company and moved with their consent and knowledge. On 12-1-1961, Shri S.L. Batra also submitted to the Secretary of the Institute a list of documents attaching therewith those in his possession or power. The Council of the Institute of Chartered Accountants, it may be pointed out. enquired from Messrs Batra and Company, Chartered Accountants, about the names of the members of the firm concerned as required under Regulation 11(5)(b) of the Chartered Accountants Regulations, 1948 so as to have written statement from the members concerned. The Council of the Institute of Chartered Accountants, it may be pointed out. enquired from Messrs Batra and Company, Chartered Accountants, about the names of the members of the firm concerned as required under Regulation 11(5)(b) of the Chartered Accountants Regulations, 1948 so as to have written statement from the members concerned. To this S.L. Batra stated in his letter dated 22-8-1959 that he was the member concerned, Shri Batra on receipt of a copy of the complaint and relevant enclosures in reply wrote to the Institute on 22-8-1959 expressing his inability to send the necessary reply within 14 days as required by the Secretary of the Institute, stating that the notice was too short and he had to go out of Delhi for about 7 days in connection with his professional engagements, further adding that in order to give a suitable reply, he would have to trace the entire history of the Company since its incorporation up-to-date which would involve a mass of correspondence and preparing documentary evidence to be submitted alone with his reply. He also desired to have his reply approved by his legal adviser. For all these reasons he requested for time up to 21-9-1959 for submitting his reply. This prayer was granted. On 21-9-1959, Mr. Batra again wrote to the Secretary expressing his inability to prepare the reply within the extended period and asked for further extension up to 30-9-1959. He gave assurance that he would not require any further extension for his reply This request was also conceded. Shri Batra, however, did not give his reply as undertaken, with the result that the Secretary of the institute had to send a reminder to him on 2-11-1959, asking him to file his written statement forthwith. On 14-12-1959, Mr. Batra wrote a letter stating that he had to attend to a case arising out of a complaint made by the Company Law Administration against him in the High Court on 18-12-1959 and that for this reason. he was obliged to ask the Institute for further extension up to the end of December 1959. This prayer was also acceded to but Shri Batra neither sent his written statement by the end of December, 1959 as promised nor did he care to apply for further extension. he was obliged to ask the Institute for further extension up to the end of December 1959. This prayer was also acceded to but Shri Batra neither sent his written statement by the end of December, 1959 as promised nor did he care to apply for further extension. On 19-12-1960, however, Shri Batra sent a letter stating that it had not been possible for him to send the necessary reply so far on account of illness of his daughter and his engagements outside Delhi. He accordingly sought permission to file the reply by 29-2-1960. This prayer was also granted. On 3-3-1960. Mr Batra again wrote to the Secretary stating that his daughter was still ill and, therefore, he wanted further extension of time till the end of March, 1960. While granting this extension as prayed, the Secretary made it clear that this was the fast extension of time and that if no written statement was filed within the time extended, the complaint would be considered by the Council in accordance with Regulation 11(7) of the Chartered Accountants Regulations, 1949, without his written statement Even this warning according to the record was not heeded to by Shri Batra and he did not care to file his written statement The complaint was thereupon considered by the Council without the written statement from Shri Batra and it was decided to refer the case to the Disciplinary Committee for enquiry prime facie case having been established against Shri Batra. It was in these circumstances that the written statement dated 12-1-1961 was presented by Shri Batra. It may be pointed out that the enquiry by the Disciplinary Committee started on 12-1-1961 at New Delhi at 3 P.M. The record discloses that at the commencement of tin proceedings among the parties present, was Shri R.K. Relan, describing himself as partner of the respondent Shri S.L. Batra before the Committee. It may be pointed out that the enquiry by the Disciplinary Committee started on 12-1-1961 at New Delhi at 3 P.M. The record discloses that at the commencement of tin proceedings among the parties present, was Shri R.K. Relan, describing himself as partner of the respondent Shri S.L. Batra before the Committee. He informed the Committee that Shri Batra had left Chandigarh at 11 A.M. that morning and his car had, according to a telephonic message, broken down at Karnal where arrangement for another car were being made As Shri Batra had admittedly had ample notice of the date of hearing it was not considered proper to wait for him and the proceedings were begun Shri Relan on enquiry being made by the Committee replied that he was not representing Shri S.L. Batra Shri Relan was in the circumstances desired to retire which he did Shri Chopra, counsel for the complainant, then opened the case. At about 3.45 P.M. Shri Batra appeared with his counsel and a clerk Shri Relan also seems to have returned. The Committee examined, inter alia, Ram Parkash Arora. Stenographer of the Corporation, Harbans Singh, Receptionist of the C. W. E's Office at the relevant time, B.K. Sood and Shri Dhingra and Shri S.L. Batra was allowed to explain his position. 7. We have been taken through the entire relevant record by the learned counsel for the parties. Shri Bhagirath Das, learned counsel for Shri Batra, has submitted that his client was doing his professional duty according to law and the accepted standards, but the Corporation felt annoyed with him on his having sent a bill for Rs. 300 for his professional fee for the year in question. It was as a counterblast of this bill for Rs 300 that the Corporation presented this complaint. According to the learned counsel, his client was fully justified in not finalising the balance-sheet and the Profit and Loss Account because of non-compliance with the requirements by the Corporation. He has also submitted that his client's conduct does not fall within the definition of the word "misconduct" as contained in Section 22 read with the Schedule of the Chartered Accountants Act No. 38 of 1949. 8. Dealing with the second point first it is desirable here to read Section 22 :- "22. He has also submitted that his client's conduct does not fall within the definition of the word "misconduct" as contained in Section 22 read with the Schedule of the Chartered Accountants Act No. 38 of 1949. 8. Dealing with the second point first it is desirable here to read Section 22 :- "22. Professional misconduct defined For the purposes of this Act, the expression 'professional misconduct' shall be deemed to include any act or omission specified in any of the Schedules, but nothing in this section shall be construed to limit or abridge in any way the power conferred or duty cast on the Council under Sub-Section (1) of Section 21 to inquire into the conduct of any member of the Institute under any other circumstances." In the Second Schedule, clause (7) of Part I is the only clause which could have any relevance, but that, according to the learned counsel, was not the case as made out in the complaint. Referring to Part II of the Schedule the learned counsel has stated that there was no contravention of any provision of the Act or the Regulations made thereunder with the result that the reference according to the learned counsel, is bad and incompetent. I may point out that the recent amendment of the Chartered Accountants Act in 1959 does not affect the substance of the provisions to which reference is necessary in the case in hand 9. I may point out that the recent amendment of the Chartered Accountants Act in 1959 does not affect the substance of the provisions to which reference is necessary in the case in hand 9. Shri K.K. Jain, learned counsel appearing for the Council, has while dealing with the second point, drawn our attention to a decision of the Supreme Court In Council of the Institute of Chartered Accountants v. B. Mukherjea, AIR 1958 SC 72 , in which Gajendragadkar, J. (as he then was) speaking for the Court after considering the relevant sections dealing with enquiry into professional misconduct, observed as follows :- "It must be conceded that the conduct of the respondent in the present case cannot attract any of the provisions in the schedule and may not therefore be regarded as falling within the first part of S. 22; but if the definition given by S. 22 itself purports to be an inclusive definition and if the section itself in its latter portion specifically preserves the larger powers and jurisdiction conferred upon the Council to hold inquiries by S. 21, Sub-S. (I), it would not be right to hold that such disciplinary jurisdiction can be invoked only in respect of conduct falling specifically and expressly within the inclusive definition given by S. 22, In this connection it would be relevant to mention S. 8 which deals with disabilities. Section 8, Sub-Ss. (V) and (Vi) support the argument that disciplinary jurisdiction can be exercised against Chartered Accountants even in respect of conduct which may not fall expressly within the inclusive definition contained in Section 22. We, therefore, take the view that, if a member of the Institute is found, prima facie, guilty of conduct which, in the opinion of the Council, renders him unfit to be a member of the Institute even though such conduct may not attract any of the provisions of the schedule it would still be open to the Council to hold an inquiry against the member in respect of such conduct and a finding against him in such an inquiry would justify appropriate action being taken by the High Court under Section 21, Sub-Section (3). It is true that the High Court would take action against the offending member only if the High Court accepts the finding made by the Council and not otherwise. It is true that the High Court would take action against the offending member only if the High Court accepts the finding made by the Council and not otherwise. This conclusion is strengthened if we bear in mind the extended meaning of the expression 'to be in practice' given in Section 2, Sub-Section (2) which we have already dealt with." In this reported case, the Court while dealing with the question of final order to be passed against the delinquent Chartered Accountant observed as under :- "The conduct of the respondent is, in our opinion, wholly unworthy of a Chartered Accountant in practice. His refusal to give prompt replies to the letters received from the Assistant Controller of Insurance followed by his failure to return the documents and all securities and cash received by him as liquidator leave no room for doubt that he was unable to return the said amount and the said securities and cash and that he was merely employing delaying tactics with the object of postponing the evil day. It is not conduct which is only technically improper or unworthy, it is conduct which is grossly improper and unworthy and as such it calls for a deterrent order." After making these observations, the Chartered Accountant concerned in that case, who had been appointed a liquidator by the Calcutta High Court, was held to be absolutely unworthy of his status and unfit to be a member of the Institute. His name was directed to be removed from the Register for four years. This decision provides a clear-cut answer to the second objection raised on behalf of Shri Batra. Our attention has indeed also been drawn to an unreported judgement of the Supreme Court in H.A.K. Rao v. Council of Institute of Chartered Accountants, Civil Appeals Nos. 447 and 501 of 1965 decided by a Bench of five Judges on 13-12-1966 : (reported in AIR 1967 SC 1257 ), in which also it is observed that for purposes of the Chartered Accountants Act, the expression ''professional misconduct" includes the act or omission specified in the Schedules to the Act. It is urged that inclusive definition is not to be construed as exhaustive, which contention, prima facie appears to be correct. 10. It is urged that inclusive definition is not to be construed as exhaustive, which contention, prima facie appears to be correct. 10. Coming now to the merits, the case of the Corporation before the Committee and of the Council in this Court has been that Shri S.L. Batra had with the object of forcing the Corporation to pay him the sum of Rs. 300 by way of audit-fee, attempted to delay the finalisation of the balance-sheet and the Profit and Loss Account and that this constituted misconduct on his part. After going through the evidence, which mainly consists of documentary evidence, we are inclined to take the view that although the conduct of Shri S.L. Batra discloses want of due sense of responsibility, nevertheless, it is not possible to come to a positive conclusion that the slack manner in which he has dealt with the Corporation was inspired by the motive to force it to pay him the sum of Rs. 300 by way of his audit fee. 11. During the course of arguments, the question arose about the test to be applied to the cases of professional misconduct in determining the guilt of Chartered Accountants charged with professional misconduct. The counsel for the parties took adjournments for looking up law on the point. At the resumed hearing, our attention was drawn to cases of professional misconduct committed by legal practitioners, it being conceded that the same test would be applicable to the cases of Chartered Accountants. One case of Chartered Accountant has also been cited to which I would advert after dealing with the cases of legal practitioners. In the case of A., a Pleader v. Judges of the High Court of Madras, AIR 1930 PC 144, it was laid down as a broad principle that charges of professional misconduct must be clearly proved and should not be inferred from mere ground for suspicion, however reasonable, or what may be mere error of judgement or indiscretion. It was further held there that enquiry in a serious case of professional misconduct should proceed on formulated charges not only in fairness to the person charged with professional misconduct but in order that the evidence may relevantly bear on the particular issue and the evidence should be carefully taken and judged according to the ordinary standard of proof. In Dogar Mal Amir Chand v. P, a Pleader. In Dogar Mal Amir Chand v. P, a Pleader. AIR 1930 Lah 947, this Privy Council decision was followed by a Bench of the Lahore High Court. The Supreme Court in B. Nageshwara Rao v. Hon'ble Judges of the Madras High Court, AIR 1955 SC 223 recorded its view in the following words :- "On the facts and circumstances of the case we think that charges 4 and 5 have not been brought home to the appellant or at any rate, the appellant is entitled to the benefit of the doubt. In the circumstances, we hold that the order passed by the High Court should be reversed and we direct that the complaint against the appellant do stand dismissed as not proved." In Nityanand Mathur v. Babu Ram, AIR 1937 All 506 it was observed that a man's professional reputation is as valuable as a trader's financial reputation it being added that proceedings under S. 13, Legal Practitioners Act though not described as a prosecution, are something very akin to a prosecution. In Emperor v. Surjya Narayan Singh, AIR 1920 Pat 84, a Full Bench of that Court observed that the proof which is required in order to convict on a criminal charge, is that which leaves no reasonable doubt in the mind of the Court that the offence has been committed, and the same standard ought to be applied to cases arising under the Legal Practitioners Act. A Special Bench of the Rajasthan High Court in Amar Singh v. Madanmohan, AIR 1956 Raj 58 relied on the aforesaid decisions of the Supreme Court, Privy Council and Patna High Court. Special Bench of the Orissa High Court in Annada Devi v. Banchhanidhi, AIR 1959 Orissa I, laid down that the standard of proof required in cases under the Legal Practitioners Act to prove the charge of unprofessional conduct is the same which is required in order to convict an accused on a criminal charge. The decision of the Supreme Court in Nageshwara Rao's case, AIR 1955 SC 223 and of the Rajasthan High Court in Amar Singh's case, AIR 1956 Raj 58 were referred to in the course of the judgement. The decision of the Supreme Court in Nageshwara Rao's case, AIR 1955 SC 223 and of the Rajasthan High Court in Amar Singh's case, AIR 1956 Raj 58 were referred to in the course of the judgement. The case of a Chartered Accountant cited at the bar is reported as S. Ganesan v. A.K. Josceiyne, AIR 1957 Cal 33, wherein it was observed as follows :- "Professional misconduct on the part of the person exercising one of the technical professions cannot fairly or reasonably be found, merely on a finding of a bare non-performance of a duty or some default in performing it. The charge is not one of inefficiency, but of misconduct and in an allegation of misconduct an imputation of a certain mental condition is always involved. I think, it would be impossible for any professional man to exercise his profession if he was to be held guilty of misconduct simply because he had not, in a given case, been able to do all that was required in the circumstances or that had misconceived his duty or failed to perform a part of it. I think the test must always be whether in addition to the failure to do the duty, partial or entire. which had happened, there had also been a failure to act honestly and reasonably." In this case, after applying this test, the Court was unable to hold that the Account ant concerned had acted with reasonable care, but the charge in that case was of gross negligence and in view of the nature of the charges framed the Court found. It difficult to take any action in the matter On the evidence, the High Court expressed its view in the following words :- "All that can be said on the facts proved is that he failed to take normal and reasonable care in informing himself of the true position under S. 132(3) and Regulation 107 in relation to the Agreement and the Profit and Loss Account as drawn up. The position, therefore, seems to be that in view of the absence of any charge of negligence and the withdrawal of the particular allegation, it is not possible to hold that the charges actually framed had been established, although, as I have found, the respondent does not appear to me to have acted with reasonable care." Considering the evidence in the light of the ratio of the various decisions cited at the bar, it is not possible for us to hold that it irresistibly leads to a clear conclusion that Shri S.L. Batra had raised several queries and had written several letters to the Corporation with the object of securing agreement to the audit fee of Rs. 300 to which the complainant was not prepared to agree. The evidence on the question whether Shri Gupta visited the office of the Corporation on 29-4-1959, 1-5-1959 and 5-5-1959 and Shri Batra did so on 7-5-1959. cannot be considered to be sufficiently satisfactory to justify a safe conclusion either way, though it does appear that there was no plausible reason why the Corporation, anxious as it was to expedite finalisation of the accounts, and balance-sheet, should have failed to co-operate with the Company. The evidence of Mr. Sood explaining the circumstances in which he had written the chit Ex. P. 48 - a document purporting to establish Shri Batra's visit to the office of the Corporation - is most unimpressive and it does seem to suggest that there was perhaps something more than meets the eye so far as the dealing between Mr. Batra and Mr. Sood are concerned. It is somewhat difficult to place Implicit reliance on the testimony of Mr. Sood in this connection. We are undoubtedly inclined to take the view that time factor in finalising the audit report, the balance-sheet and the Profit 4 Loss Account, in the present case, was of the greatest importance and Shri S.L. Batra, who as a professional man should have realised its importance, failed to attach to this factor the importance it deserved at his hands and to that extent he has betrayed an element of inefficiency and carelessness, but from this it, does not necessarily follow that he had raised several queries and had written several letters to the Corporation-complainant with a view to securing an agreement to the audit fee of Rs. 300 which amount the Corporation was not prepared to accept. We are of course not minimising the importance of expecting from the Chartered Accountants appropriate standard of efficiency, promptness, sense of responsibility and straightforwardness, but at the same time, we find it a little difficult to relax the standard which is required in arriving at conclusions on evidence relating to misconduct of a professional man. Indeed the learned counsel for the Council has also not canvassed that the standard of proof in this case should be lower than that laid down by the Privy Council in the Madras case of "A, a Pleader''. It is true that Shri Batra was once before also proceeded against before the Council of the Institute of Chartered Accountants in Chartered Accountant Case No. 2-D of 1959 decided by a Bench of the Punjab High Court on 29-8-1960, when a warning was given to Shri Batra for non-compliance with Section 244 of the Indian Companies Act. 1913. In that case, on the recommendation of the Council, a lenient view was taken of the lapse on his part. This previous incident of lapse on the part of Shri Batra, quite damaging though it is to his reputation, also does not improve the quality of the evidence on the charge with which the present proceedings are concerned. We are therefore, not persuaded to hold that the charge in question namely that Shri Batra had raised several queries and had written several letters with the object of securing an agreement to his audit fee of Rs. 300 to which the Corporation was not agreeable, has been fully brought home to the respondent so as to justify penal action on that score. The report of the Council discloses that the members were considerably influenced by the conduct of Shri Batra in persistently failing in spite of a number of opportunities to file written statement to the complaint against him. This attitude is undoubtedly difficult to appreciate and we are constrained to disapprove of it. But this too would not be enough to bring home to him the charge mentioned above because nervousness on his part on account of these proceedings and consciousness of his negligence, carelessness and indifference towards his client's interests may well account for these delaying tactics. 12. But this too would not be enough to bring home to him the charge mentioned above because nervousness on his part on account of these proceedings and consciousness of his negligence, carelessness and indifference towards his client's interests may well account for these delaying tactics. 12. As a result of the foregoing discussion, though we are constrained to hold that the evidence on the record does not clearly prove that Shri S.L. Batra was guilty of misconduct by raising several queries and writing several letters to the Corporation with the object of securing agreement to the audit fee of Rupees 300 to which the Corporation was not agreeable, nevertheless, we are fully satisfied that he has been extremely negligent and careless in not attaching due importance expected of a professional man to the factor of delay in the matter of preparation of the Profit and Loss Account and the balance-sheet of his client. On this view of the matter, we think that in the circumstances of the case it would serve the ends of justice if we reprimand Shri S.L. Batra.