JUDGMENT : M.R. SHAH, J. 1. Present Reference is made under Section 21(5) of the Chartered Accountants Act, 1949 in respect of Shri Manoj Harivadan Lekniwala, Chartered Accountant. 2. One Shri Alkesh C Shah of M/s. Alkesh C Shah & Co, Ahmedabad made a complaint against the respondent Chartered Accountant and made following allegations : (1). The respondent has carried out the statutory audit of M/s. Gandhinagar Hotels Ltd., Gandhinagar Leasing and Finance Ltd. and Pragna Finance Pvt. Ltd. for the year ended 31.3.2002 and onwards as per the search certificates issued by M/s. Bhadresh Patel & Associates, Chartered Accountants. The respondent has neither intimated to the complainant of his appointment as auditor nor did he seek the complainant's no objection certificate before accepting the said audits. (2). All the aforesaid three companies have not paid undisputed audit fees, which the respondent knew very well. (3). The aforesaid charges, if proved, would render the respondent guilty of “Professional Misconduct” falling within the meaning of Clause (8) of Part I of the First Schedule & Notification No. ICA(7) 46/99 dated 28.10.1999 read with Sections 21 and 22 of the Chartered Accountants Act, 1949. 2.1. That after giving fullest opportunity as required under the provisions of the Chartered Accountants Act and Chartered Accountants Regulations, 1988, the Council was prima facie of the opinion that the respondent was guilty of professional and/or other misconducts and therefore, it was decided to cause an inquiry to be made in the matter by the Disciplinary Committee. The Disciplinary Authority heard the respondent. Though, complainant did not remain present but he filed detailed representation duly signed by him. The respondent did not plead guilty. That thereafter, considering the material on record and the submissions made on behalf of the parties, the Disciplinary Committee held respondent guilty of professional misconduct with respect to second charge under the Notification No.1 CA(7)/46/99 dated 28.10.1999 issued under Clause (ii) of Part II of the Second Schedule r/w Sections 21 and 22 of the Chartered Accountants Act, 1949 and held in not guilty with respect to the charge falling within the meaning of Clause (8) of Part I of the First Schedule of the Chartered Accountants Act, 1949. Accordingly, Disciplinary Committee submitted the report dated 3.2.2008. 2.2. Copy of the Disciplinary Committee report was forwarded to both the parties. Accordingly, Disciplinary Committee submitted the report dated 3.2.2008. 2.2. Copy of the Disciplinary Committee report was forwarded to both the parties. They were requested to send written representation, if any, in the matter and also if they so desire, they might appear before the Council either in person and/or through a member of the petitioner duly authorized by them and to make their oral submissions. The complainant submitted the written representation dated 26.09.2009. The respondent submitted written representation dated 10.10.2009. Thereafter on considering the report of the Disciplinary Committee along with written representations dated 26.09.2009 and 03.05.2010 received from the complainant and the written representations dated 10.10.2009 and 15.03.2010 received from the respondent on the report of the Disciplinary Committee and also the oral submission made by the Council of the complainant, the Council decided to accept the report of the Disciplinary Committee and accordingly held that the respondent was: (a). Guilty of professional misconduct with respect to second charge under the Notification No.1 CA(7)/46/99 dated 28.10.1999 issued under Clause (ii) of Part II of the Second Schedule r/w Sections 21 and 22 of the Chartered Accountants Act, 1949. (b). not guilty with respect to first charge falling within the meaning of Clause (8) of Part I of the First Schedule of the Chartered Accountants Act, 1949. 2.3. Hence, present Reference by the Council. 3. Shri B.D. Karia, learned advocate has appeared on behalf of the Council and Shri Kalpesh Shastri, learned advocate has appeared on behalf of the respondent no.1. 4. Shri Karia, learned advocate for the Council has requested to accept/approve the recommendation of the Council to reprimand the respondent as the respondent is found guilty of professional misconduct with respect to second charge under the Notification No.1 CA(7)/46/99 dated 28.10.1999 issued under Clause (ii) of Part II of the Second Schedule r/w Sections 21 and 22 of the Chartered Accountants Act, 1949. Shri Karia, learned advocate for the Council has taken us to the material on record, more particularly, findings recorded by the Council in the report, more particularly, admission on the part of the respondent recorded in para 19 of the report. 5. Shri Karia, learned advocate for the Council has taken us to the material on record, more particularly, findings recorded by the Council in the report, more particularly, admission on the part of the respondent recorded in para 19 of the report. 5. Shri Kalpesh Shastri, learned advocate for the respondent has vehemently submitted that in fact the respondent companies and clients were ready and willing to pay professional fees to the complainant, however, complainant did not accept the same as they insisted for entire payment as claimed by them. Relying upon the affidavit in reply, he has submitted that companies were following mercantile accounting system and therefore, the professional fees of the complainant was not settled. Therefore, he has requested to accept the explanation and not to approve/confirm the recommendation of the Council to reprimand the respondent. 6. We have heard Shri Karia, learned advocate for the Council and Shri Shastri, learned advocate for the respondent at length. We have considered the material on record. We have also considered in detail the report/recommendation made by the Council. At the outset, it is required to be noted that the respondent is held guilty of professional misconduct with respect to second charge under the Notification No.1 CA(7)/46/99 dated 28.10.1999 issued under Clause (ii) of Part II of the Second Schedule r/w Sections 21 and 22 of the Chartered Accountants Act, 1949. It has been established and proved that respondent accepted audit of the concerned companies and clients of the complainant before any audit fees of the complainant was paid. It has also been established and proved that from the audited financial statements of all the three companies for the year ending on 31.3.2001 and 31.3.2002. At this stage, it is required to be noted that even the respondent admitted that it was a mistake on his part that undisputed outstanding professional fee of the complainant was not paid before acceptance of audit as stipulated in the Notification No.1 CA(7)/46/99 dated 28.10.1999. At this stage, it is required to be noted that even the respondent admitted that it was a mistake on his part that undisputed outstanding professional fee of the complainant was not paid before acceptance of audit as stipulated in the Notification No.1 CA(7)/46/99 dated 28.10.1999. Notification dated 28.10.1999 reads as under: “In exercise of the powers conferred by clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949 the Council of the Institute of Chartered Accountants of India do hereby specifies that a member of the institute in practice shall be deemed to be guilty of professional misconduct, if he accepts the appointment as auditor of an entity in case of undisputed audit fee of another Chartered Accountant for carrying out the statutory audit under the Companies Act, 1956 or various other statute has not been paid.” 6.1. Thus, the Council has rightly held the respondent guilty of professional misconduct with respect to Second Charge, which reads as under: “In conclusion and in view of the above, the Committee holds the respondent guilty of professional misconduct with respect to second charge under Notification No. 1CA(7)/46/99 dated 28.10.1999, issued under Clause (ii) of Part II of the Second Schedule read with Sections 21 and and 22 of the Chartered Accountants Act, 1949 and holds him not guilty with respect to the charge falling within the meaning of Clause (8) of Part I of the First Schedule of the Chartered Accountants Act, 1949.” 7. So far as submission on behalf of the respondent that respective companies were following mercantile accounting system and therefore, at the relevant time the professional fee of the complainant might not have paid is concerned, at the outset, it is required to be noted that same defence seems to be an after thought. It is required to be noted that even after the respondent has signed the report for all the three companies for the year ending 31.3.2002 the audit fees outstanding in the name of complainant firm remain unpaid by the companies. Even otherwise, it is required to be noted that as such respondent had admitted that it was mistake on his part that undisputed outstanding professional fee of the complainant was not paid before he accepted the audit of the three companies. 7.1. Considering the aforesaid facts and circumstances, we concur with the finding and recommendation made by the Council. Even otherwise, it is required to be noted that as such respondent had admitted that it was mistake on his part that undisputed outstanding professional fee of the complainant was not paid before he accepted the audit of the three companies. 7.1. Considering the aforesaid facts and circumstances, we concur with the finding and recommendation made by the Council. We approve the recommendation made by the Council to reprimand the respondent having found guilty of professional misconduct with respect to Notification No.1 CA(7)/46/99 dated 28.10.1999. Order accordingly. Present Reference stands disposed of accordingly.