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PETITIONER: THE  COUNCIL  OF THE INSTITUTE OF CHARTERED  ACCOUNTANTS  OF

       Vs.

RESPONDENT: B. MUKHERJEA

DATE OF JUDGMENT: 10/09/1957

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. BHAGWATI, NATWARLAL H. DAS, S.K.

CITATION:  1958 AIR   72            1958 SCR  371

ACT: Chartered  Accountant-Misconduct      during appointment  as liquidator  by Court-If amounts to professional  misconduct- Reference-Power of High Court-Chartered Accountants Act,1949 (XXXVIII Of 1949), SS. 2(2), 21 and 22.

HEADNOTE: Respondent,  a  chartered  accountant and a  member  of  the Institute of Chartered Accountants, was appointed liquidator of  three insurance companies in pursuance of the orders  of the High 48 372 Court.   He received records, cash and securities on  behalf of  these companies.  The Assistant Controller of  Insurance found   that   his   conduct  as   liquidator   was   wholly unsatisfactory  and  that  he would not even  reply  to  the letters addressed to him.  His appointment was cancelled and another person was appointed.  In spite of repeated  demands he failed to return all the records, cash and securities.  A complaint  was  lodged against him with the Council  of  the Institute  of  Chartered  Accountants.   After  inquiry  the respondent  was found guilty of misconduct, and  the  report was forwarded by the Council to the High Court for necessary action  under S. 21 of the Chartered Accountants  Act  1949. The High Court rejected the reference on the ground that the conduct  of which the respondent was found guilty could  not be  said to be professional misconduct and did  not  attract the provisions of ss. 21 and 22 of the Act. Held,  that  the respondent, when working as  a  liquidator, must  be  deemed  to have been in practice  as  a  chartered accountant  within the meaning Of S. 2(2) of the  Act.   The definition  of  misconduct  in S. 22 is  inclusive  and  the Council  may  hold an inquiry and find a  member  guilty  of conduct  which,  in its opinion, renders him unfit to  be  a member  of the Institute, even though such conduct does  not attract any of the provisions of the schedule referred to in S.  22.  The conduct of the respondent was grossly  improper and unworthy and amounted to professional misconduct  within the meaning of the Act. In  a  reference under S. 21 of the Act the High  Court  has

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ample powers to adopt any course which would enable it to do complete  justice between the parties.  It can  examine  the correctness of the findings recorded by the Council or refer the  matter  back for further inquiry and call for  a  fresh finding.   The  High  Court is not bound to  deal  with  the merits of the finding as it has been recorded and either  to accept or reject it.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 170 of 1956. Appeal  by special leave from the judgment and  order  dated the  12th  January,  1955, of the  Calcutta  High  Court  in exercise  of  its Special Jurisdiction under  the  Chartered Accountants Act, 1949, in Matter No. 107 of 1954. M.   C. Setalvad, Attorney-General for India, S. N.  Andley, J.    B.   Dadachanji   and   Rameshwar   Nath,   for    the appellants. Aswini Kumar Ghose, T. S. Venkataraman and K.     R. Chaudhury, for the respondents. 373 1957.  September 10.  The following Judgment of the Court was delivered by GAJENDRAGADKAR J.-The material facts leading to the  present appeal are not in dispute and may be conveniently stated  at the  outset.  On July 17, 1933, the respondent was  enrolled as  a registered accountant under the  Auditors  Certificate Rules, 1932.  When the Chartered Accountants Act, 1949, came into,  operation,  the respondent’s name was  entered  as  a Member of the Institute of Chartered Accountants of lndia on July  1,  1949.  On September 13, 1950, the  respondent  was appointed  a Liquidator of three companies.  The  respondent obtained  refund  of the sums and  securities  deposited  on behalf  of  the  three companies with the  Reserve  Bank  of India.   He, however, made no report about the  progress  of liquidation of the said three companies.  Repeated  requests made  to him by the Assistant Controller of Insurance  found no response.  As Liquidator the respondent gave a cheque  to Shri  S. K. Mandal, Solicitor to the Central  Government  at Calcutta, towards payment of the taxed costs in the winding- up  proceedings  of one of the companies.  The  said  cheque was,  however, returned dishonoured on the ground  that  the payment  had  not  been arranged for.   When  the  Assistant Controller  of  Insurance  found that  the  conduct  of  the respondent as Liquidator was wholly unsatisfactory and  that he would not even show the ordinary courtesy of replying  to the  letters  addressed to him, he proceeded to  cancel  the appointment  of the respondent as Liquidator by  his  letter dated October 29, 1952.  The respondent was then called upon to hand over all books of account, records, documents, etc., to  Shri  N. N. Das, who was appointed a Liquidator  in  his place.   Shri  Das as well as the  Assistant  Controller  of Insurance  then made repeated demands on the  respondent  to deliver  to  Shri Das the assets and records  of  the  three companies.  It is common ground that the respondent had with him securities of the value of Rs. 11,950 and a cash sum  of Rs. 642 on account of the United Common 374 Provident   Insurance  Co.  Ltd.   He  had  also  with   him securities  to  the value of Rs. 12,100 on  account  of  the -Asiatic  Provident  Co. Ltd., and securities and  cash   on account  of  the Citizens of India Provident  Insurance  Co. Ltd.   Out  of these amounts the  respondent  returned  only securities  of the face value of Rs. 10,000 and Rs.  350  of

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Asiatic  Provident  Co.  Ltd., and United  Common  Provident Insurance  Co.  Ltd., respectively.  He failed to  send  any further  securities  or cash held by him on account  of  the said three companies.  It was at this stage that a complaint was  lodged against the respondent with the Council  of  the Institute of Chartered Accountants of India in Calcutta.  As required  by  the provisions of the  Act,  the  disciplinary committee  of the Council inquired into the matter.   Notice was  served  on  the  respondent but  he  filed  no  written statements  within  the time fixed.  On August  1,  1953,  a letter was received from the respondent that he was ill  and was  unable to attend personally.  The respondent  had  also requested for the adjournment of the case.  Proceedings were accordingly adjourned to August 29, 1953, on which date  the respondent  was  represented  by a  counsel  who  filed  the respondent’s affidavit stating that he was prepared to  hand over  the entire cash, books of account, etc., to the  newly appointed   Liquidator  without  rendering   the   necessary accounts.   It  appears  that  Shri  Das,  the  subsequently appointed Liquidator, gave evidence before the  disciplinary committee.   Though several opportunities were given to  the respondent  to appear before the disciplinary  committee  he failed  to  appear  or  to take  part  in  the  proceedings. Ultimately  the committee made its report on  September  13, 1953,  and  found that the respondent was  guilty  of  gross negligence  in the conduct of his professional duty  in  not handing  over charge of the assets and the books of  account of  the  said companies to the newly  appointed  Liquidator. This report was considered by the Council itself as required by  the Act.  Tile Council agreed with the finding  recorded by  the  disciplinary committee in substance, but  took  the view that the      375 acts and omissions of the respondent were more serious  than what  can be described as gross negligence.  The finding  of the  Council  was  then  forwarded  to  the  High  Court  of Judicature at Calcutta as required by section 21 (1) of  the Act  and the matter was heard by the learned  Chief  Justice and  Mr.  Justice Lahiri.  By their  judgment  delivered  on January  12, 1955, the reference was rejected on the  ground that  no action could be taken against the respondent  under the  Act  though  the facts proved  against  the  respondent showed that " he had been guilty of grossly improper conduct if  not  dishonesty".  On these facts the main  point  which arises  for  our decision is what is the nature,  scope  and extent  of  the  disciplinary  jurisdiction  which  can   be exercised  under  the  provisions of this  Act  against  the respondent. It  would  now  be necessary to examine the  scheme  of  the material provisions of the Act.  This Act came into force in 1949  and it was passed, because the Legislature thought  it expedient   to   make  provision  for  the   regulation   of professional  accountants  and  for  that  purpose  it   has provided for the establishment of the Institute of Chartered Accountants.  Section 2, sub-s. (1) (b) defines a  Chartered Accountant  as  meaning  "a person who is a  member  of  the Institute  and who is in practice".  Section 2,  sub-s.  (2) provides  that a member of the Institute shall be deemed  to be  in  practice when, individually or in  partnership  with chartered   accountants,   he,  in  consideration   of   the remuneration  received  or to be received, does any  of  the acts  mentioned  in the following 4  sub-clauses:  ......... Sub-clause (iv) is relevant for our purpose: "  S.  2  (2) (iv): " (Where a member)  renders  such  other services  as  in the opinion of the Council are  or  may  be

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rendered  by a chartered accountant, (he is deemed to be  in practice)." Section 4 provides for the entry of names in the register of chartered accountants.  Section 5 divides the members of the Institute  into  two  classes  designated  respectively   as Associates and Fellows.  Section 6 lays down that no  member of the Institute shall be 376 entitled  to  practise  unless  he  has  obtained  from  the ’Council  a  certificate  of practice.  Under  s.  7,  every member of the Institute in practice shall be designated   as a   chartered  accountant  and  no  person  practising   the profession  of  accountancy  in India shall  use  any  other designation  whether in addition thereto or in  substitution therefor.   Section 8 deals with disabilities.   Any  person who  incurs any one of the disabilities enumerated  in  sub- cls.  (i) to (vi) of s. 8 shall not be entitled to have  his name  entered in or borne on the Register.   Sub-clause  (v) deals with the disability arising by reason of conviction by a  competent  court whether within or without  India  of  an offence  involving  moral  turpitude  and  punishable   with transportation  or  imprisonment or of an offence not  of  a technical  nature  committed  by  him  in  his  professional capacity  unless in respect of the offence committed be  has either  been granted a pardon or, on an application made  by him in this behalf, the Central Government has, by an  order in  writing, removed the disability.  Sub-clause (vi)  deals with the disability in cases where the chartered  accountant is found on an inquiry to be guilty of conduct which renders him  unfit  to be a member of the  Institute.   Chapter  III deals  with the constitution of the Council, the  committees of the Council and the finances of the Council.  Chapter  IV deals with the register of members and the removal from  the Register of the name of a chartered accountant, as  provided by  s. 20, sub-cls. (a), (b) and (c).  Under s.  20,  sub-s. (2),  it is provided that the Council shall remove from  the Register  the name of any member who has been found  by  the High Court to have been guilty of conduct which renders  him unfit to be a member of the Institute.  Chapter V deals with the  question of misconduct.  It consists of ss. 21 and  22. Chapter VI deals with the constitution and functions of  the Regional Councils; chapter VII deals with penalties    and chapter VIII deals with miscellaneous matters.    Section 21 deals with the procedure of enquiries   relating          to misconduct of members of the Institute.      It reads thus: 377 "  S. 21. (1)-Where on receipt of information or on  receipt of  a complaint made to it, the Council is of  opinion  that any  member  of  the Institute has been  guilty  of  conduct which,  if proved, will render him unfit to be a  member  of the Institute, or where a complaint against a member of  the Institute  has  been  made by or on behalf  of  the  Central Government, the Council shall cause an inquiry to be held in such  manner  as  may be prescribe and the  finding  of  the Council shall be forwarded to the High Court. (2).................... (3).................... (4).................... Sub-sections (2), (3) and (4) of s. 21 deal with the  powers of the High Court in dealing with the reference made to  it, under s. 21, sub-s. (1).  Section 22 defines misconduct.  It reads thus: "  S.  22.   For the purposes of this  Act,  the  expression conduct which, if proved, will render a person unfit to be a member of the Institute " shall be deemed to include any act

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or  omission specified in the Schedule, but nothing in  this section  shall be construed to limit or abridge in  any  way the  power  conferred  on the Council under  sub-s.  (1)  of section 21 to inquire into the conduct of any member of  the Institute under any other circumstances." The learned Judges of the Calcutta High Court have held that the  conduct of which the respondent is proved to have  been guilty cannot be said to be professional misconduct properly so-called  and cannot, therefore, attract the provisions  of ss. 21 and 22 of the Act.  "There, thus, seems to be no room for  contending"# observes the learned Chief Justice in  his judgment, " that misconduct not connected with the  exercise of  the  profession  is also within the ambit  of  the  Act, provided it involves moral turpitude or appears to render  a person  unworthy  to  remain  a  member  of  a   responsible profession".   It has also been found by the learned  Judges that  even if they were to hold that the  misconduct  proved against  the respondent attracted the provisions of  ss.  21 and 22 of 378 the  Act  it would not be open to them to  take  any  action against the respondent on that ground because the  Institute cannot  expect the Court to take action in the present  case on  the  footing  that the respondent  had  been  guilty  of misconduct otherwise than in his professional capacity since that  is  not the finding which the Council arrived  at  and which  is reported to the Court.  It is the  correctness  of these  findings that is challenged before us by the  learned Attorney  General. lie contends that the learned  Judges  of the  Calcutta High Court have put an unduly  restricted  and narrow construction on the provisions of s. 21 and s. 22  in holding  that  the respondent’s conduct does not  amount  to professional  misconduct;  and he has also  urged  that  the technical  reason given by the learned Judges in not  taking any action against the respondent even if they had  accepted the broader interpretation of the two said sections proceeds on a misconception about the nature and extent of the powers of the High Court while hearing references made to it  under the  provisions of s. 21, sub-ss. (2), (3) and (4).  In  our opinion,  the  contentions raised by the  learned  Attorney- General are well-founded and must be upheld. Let us first consider whether the conduct of the  respondent amounts to professional misconduct or not.  In dealing  with this question it is necessary to bear in mind the provisions of  s.  2,  sub-s. (2) (iv) of the Act.   A  member  of  the Institute  under  this provision shall be deemed  to  be  in practice  when  he  renders such other services  as  in  the opinion of the Council are or may be rendered by a chartered accountant.   In  other  words,  just as  a  member  of  the Institute Who engages himself in the practice of accountancy is  by such conduct deemed to be in practice as a  chartered accountant, so is he deemed to be in practice as a chartered accountant when he renders other services mentioned in s. 2, sub-s.(2) (iv).  What other services attract the  provisions of this sub-section has to be determined in the light of the regulations framed under provisions of this Act.  Section 30 of the Act confers power on the Council to make  regulations by notification 379 in the Gazette of India for the purpose of carrying out  the object  of  the  Act and it provides that  a  copy  of  such regulation  should be sent to each member of the  Institute. Section 30, sub-s. 2 sets out the several topics in  respect of  which  regulations can be framed though,  as  usual,  it provides  that  the enumeration of the different  topics  is

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without prejudice to the generality of the powers  conferred by   s.   30,  sub-s.(1).  Sub-s.  (4)   lays   down   that, notwithstanding  anything contained in sub-ss. (1) and  (2), the  Central Government may frame the first regulations  for the  purposes mentioned in the section and such  regulations shall  be deemed to have been made by the Council and  shall remain  in force from the date of coming into force of  this Act  until  they  are amended, altered  or  revoked  by  the Council.  Regulation 78 is one of the regulations originally framed by the Central Government under s. 30, sub-s.   (4).. It reads thus: " Regulation 78.  Without prejudice to the discretion vested in  the Council in this behalf, a Chartered  Accountant  may act   as  liquidator,  trustee,   executor,   administrator, arbitrator,  receiver,  adviser, or  as  representative  for costing  financial  and taxation matter or may  take  up  an appointment that may be made by Central or State Governments and  Courts  of law or any Legal Authority, or  may  act  as Secretary   in  his  professional  capacity  not  being   an employment on a salary-cum-full time basis." The  last  clause  has  been  added  by  the  Council  by  a notification  dated August 22, 1953.  Now it is  clear  that when  the respondent accepted his appointment as  liquidator of  the three companies in question he agreed to work  as  a liquidator in pursuance of an order passed by the High Court of Judicature at Calcutta and there can be no doubt that  in working  as such liquidator he was rendering services  which in the opinion of the Council may be rendered by a chartered accountant.  The provisions of Regulation 78 must inevitably be  considered in the light of s. 2, sub-s.(2), cl.(iv)  and the  result  of  considering  the  two  provisions  together obviously  is  that  when the respondent was  working  as  a liquidator  in pursuance of an order passed by the  Calcutta High Court he 49 380 must be deemed to be in practice within the meaning of s. 2, sub-s.(2).  We feel no difficulty in holding that  chartered accountants who render services falling within s. 2,  sub-s. (2),  cl.  (iv) are as much entitled to be deemed to  be  in practice  as  those whose duties attract the  provisions  of cls. (i), (ii) and (iii) of sub-s. (2).  If that be the true position it is difficult to accept the view that the conduct of  the  respondent  while he discharged  his  duties  as  a liquidator  is not the professional conduct of  a  chartered accountant  even within the narrow and restricted  sense  of the  term.  If, while acting as liquidator,  the  respondent must be deemed to be in practice as a chartered  accountant, all acts and omissions proved against him in respect of such conduct   as  liquidator  must  be  characterised   as   his professional  acts and omissions.  "Practice"  according  to Webster’s New International Dictionary means Cc exercise  of any profession or occupation " and if the performance of the duties as liquidator attracts the provisions of s. 2, sub-s. (2), whatever the chartered accountant does as a  liquidator must be held to be conduct attributable to him in the course of  his practice.  The object with which cl. (iv) in  sub-s. (2)  of  s.  2  has  been  deliberately  introduced  by  the Legislature’  in our opinion, appears to be to bring  within the  disciplinary  Jurisdiction  of  the  statutory   bodies recognized  under the Act, conduct of chartered  accountants even  while  they are rendering services otherwise  than  as chartered accountants properly so-called.  It is because the Legislature  wanted to provide for a self-contained code  of conduct  in  respect  of  chartered  accountants  that   the

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denotation of the expression " to be in practice " has  been in a sense deliberately and artificially extended by  virtue of  s.  2, sub-s. (2), el. (iv).  We must,  therefore,  hold that, on the facts proved, the respondent is clearly  guilty of professional misconduct. This  would really dispose of the appeal before us,  because once   it  is  held  that  the  respondent  is   guilty   of professional  misconduct it would be obviously necessary  to deal  with him on that basis and make an  appropriate  order under s. 21, sub-s. (3) of the Act.  However, 381 since  the learned Attorney-General has alternatively  urged before  us  that in confining the exercise  of  disciplinary jurisdiction  only  to  cases  of  professional  misconduct, technically  so-called, the learned Judges of  the  Calcutta High Court have misconstrued the relevant provisions of  the Act,  we  propose to deal very briefly  with  that  question also. Section  21, sub-s. (1), deals with two categories of  cases in which the alleged misconduct of members of the  Institute can  be  inquired  into.   If  information  is  received  or complaint  is made to the Institute against the  conduct  of any chartered accountant the Council is not bound to hold an inquiry  straightaway.  The Council is required. to  examine the  nature of the information or complaint made and  decide whether, if the facts alleged against the member are proved, they  would  render the member unfit to be a member  of  the Institute.   In  other  words,  in the  case  of  a  private complaint made against members, it is only where the Council is  satisfied  prima.facie that facts  alleged  against  the member,   if   proved,  would  justify   the   exercise   of disciplinary  jurisdiction  against  the  member  that   the Council is required to hold an inquiry.  The conduct alleged must be such as, if proved, would render the member unfit to be a member of the Institute.  The other class of cases  has reference to. the complaint received by the Council from the Central  Government.  In regard to this class of cases,  the Council  is not required,-and indeed has no jurisdiction  to apply  the  primarily test-before holding an  inquiry.   The Council  is required to cause an inquiry to be held on  such complaint straightaway.  In both the cases when the  inquiry is  concluded,  the  findings  of  the  Council  are  to  be forwarded to the High Court.  Section 22 purports to  define the  expression  "conduct which, if proved,  will  render  a person  unfit  to be a member of the Institute".  It  is  an inclusive  definition  ;  it includes any  act  or  omission specified  in the schedule but the latter portion of  s.  22 clearly  lays  down that nothing contained in  this  section shall be construed to limit or abridge in any way the  power conferred  on  the Council under sub-s. (1) of s.  21.   The position thus 382 appears  to  be that though the definition of  the  Material expression used in s. 21, sub-s. (1), refers to the acts and omissions  specified in the schedule, the list of  the  said acts and omissions is not exhaustive;and, in any event,  the said  list  does  not purport to limit  the  powers  of  the Council  under s. 21, sub-s. (1), which may  otherwise  flow from the words used in the said sub-s. itself.  The schedule to  which  s. 22 refers has enumerated in cls.  (a)  to  (v) several  acts and omissions and it provides that, if any  of these  acts  or  omissions is  proved  against  a  chartered accountant, he shall be deemed to be guilty of  professional misconduct  which  renders  him unfit to be  member  of  the Institute.   Clause (v) is rather general in terms since  it

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provides  for cases where the accountant is guilty  of  such other act or omission in his professional capacity as may be specified  by the Council in this behalf by notification  in the Gazette of India.  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. (1), 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 s. 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 383 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 s. 21, sub-s. (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.   This   conclusion   is strengthened if we bear in mind the extended meaning of  the expression  "to be in practice" given in s. 2,  sub-s.  (2), which  we  have  already dealt with.  In this  view  of  the matter we must reverse the conclusion of the learned  Judges of  the Calcutta High Court that the conduct proved  against the respondent does not fall within as. 21 and 22 because it is not conduct connected with the exercise of his profession as a chartered accountant in the narrow sense of that term. The next question to consider is in regard to the extent  of the jurisdiction and powers of the High Court when the  High Court  deals with references under s. 21, sub-ss.  (2),  (3) and (4).  The learned Judges of the Calcutta High Court took the  view  that  even  if they had agreed  to  put  a  wider construction  on the material words used in ss. 21  and  22, they  would not be justified in passing any  orders  against the  respondent  in  the  present  proceedings  because  the finding  which had been referred to the High Court was  only one  and  that  was  that  the  respondent  was  guilty   of professional misconduct in the narrow sense of the term.  In other  words, the High Court thought that in accepting,  and acting or the larger construction of the material words  the High  Court would be making out a new case on the  reference and the High Court would not be justified in adopting such a course.   In  our opinion, this view  is  not  well-founded. Section  2  1,  sub-s. (2), lays down the  procedure  to  be followed  by  the  High Court when a  finding  made  by  the Council  is referred to it under s. 21, sub-s. (1).   Notice of the day fixed for the hearing of the reference has to  be given  to the parties specified in s. 21, subs. (1)  and  an opportunity of being heard has to be given to them.  Section 21,  sub-s.  (3),  then lays down that the  High  Court  may

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either  pass such final orders on the case as it thinks  fit or refer it back for further 384 inquiry  by  the Council and, upon receipt  of  the  finding after  such  inquiry,  deal  with the  case  in  the  manner provided in sub-s. (2) and pass final orders thereon.  It is clear  that, in hearing references made under s. 21,  sub-s. (1),  the  High  Court can examine the  correctness  of  the findings  recorded by the statutory bodies in  that  behalf. The  High Court can even refer the matter back  for  further inquiry by the Council and call for a fresh finding.  It  is not as if the High Court is bound in every case to deal with the merits of the finding as it has been recorded and either to accept or reject the said finding.  If, in a given  case, it  appears  to the High Court that, on  facts  alleged  and proved,  an  alternative finding may be recorded,  the  High Court  ’can  well  send the case back to  the  Council  with appropriate  directions in that behalf.  The powers  of  the High  Court  under s. 21, sub-s. (8), are  undoubtedly  wide enough to enable the High Court to adopt any course which in its  opinion  will,, enable the High Court  to  do  complete justice between the parties.  Besides, in the present  case, no  such  technical  considerations  can  really  come  into operation  because  the  material facts  have  not  been  in dispute between the parties at any stage of the proceedings. The  only  point  in dispute between the  parties  has  been whether on the facts proved disciplinary jurisdiction can be invoked  against the respondent under the provisions of  the Act.   We, therefore, take the view that the learned  Judges of  the  High Court were in error in holding that,  even  if they had accepted the broader interpretation of s. 21 and s. 22, they could not make an appropriate order in the  present case  against the respondent having regard to  the  specific finding recorded by the Council in the inquiry in question. It  would  now  be  necessary  to  refer  to  some  judicial decisions to which our attention has been invited.  In G. M. Oka, In re (1), it has been held by a Division Bench of  the Bombay  High Court that, when a chartered  accountant  gives evidence before a court of law and he is in the witness  box not as a chartered (1)  [1952] 22 Comp.  Cas. 168. 385 accountant  but as a witness, the falsity of his  ,statement does  not give rise to any disciplinary proceedings  against him  as a chartered accountant.  If he gives false  evidence he  may  be  guilty of perjury and if he  is  convicted  the conviction  itself may call for disciplinary action.   These observations  undoubtedly lend support to the view taken  by the  Calcutta  High Court.  It is of course. true  that  the conviction  of  a  chartered accountant  would  attract  the provisions  of  s.  8, sub-a. (vi) and  in  that  sense  the conclusion  of  the Bombay High Court  that  the  conviction itself  may  be the basis of disciplinary  action  is,  with respect, wholly correct; but the other observations on which reliance  is placed by the respondent before us  are  obiter and it also appears from the judgment that the attention  of the  learned Judges was not drawn to the provision of  s.  2 (2) (iv) and other relevant considerations do not appear  to have  been urged before them in that case.  As the  judgment itself  points  out, apart from the technical  points  which were  urged  before  the court on behalf  of  the  chartered accountant,  there  was  a large volume  of  other  evidence produced  against him which conclusively proved that he  was guilty  of  misconduct.  Mr. Ashwini Kumar  Ghosh,  for  the respondent,  has also sought to rely on Haseldine v.  Hosken

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(1).  In this case the solicitor had taken out an  indemnity policy  which insured him against loss arising by reason  of any  neglect,  omission  or  error  while  acting  in   his. professional  capacity.   During  the  subsistence  of  this policy, the solicitor sustained loss through having, without realizing  the fact, entered into a  champertous  agreement. When  the solicitor made a claim to be indemnified,  it  was held that the loss in respect of which indemnity was claimed did  not arise by reason of any neglect, omission  or  error committed by the solicitor in his professional capacity  but arose from his entering into a personal speculation.  We  do not see how this case can assist the respondent in any  way. In considering the question as to whether the respondent has been guilty of professional misconduct in the present  case, we are concerned with (1)  [1933] 1 K.B. 822. 386 the  material  provisions of the Chartered  Accountants  Act itself.    Observations  made  by  the  learned  Judges   in Haseldine’s   case  can  afford  no  assistance  to  us   in interpreting the said provisions.  Similarly the decision in Krishnaswamy  v. The Council of the Institute  of  Chartered Accountants (1) where the court was primarily concerned with the question as to whether orders passed under s. 21 (2)  of the  Act  are orders passed in civil proceedings or  not  is wholly  inapplicable  and gives us no help in  deciding  the points before us. The only question which now remains to be considered is  the final  order  to  be passed  against  the  respondent.   The conduct  of  the  respondent  is,  in  our  opinion,  wholl- yunworthy  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.   The respondent  was appointed a liquidator by the Calcutta  High Court  presumably because he was a chartered  accountant  in practice.  He thus received the benefit of this  appointment as  a  result  of  his status  as  chartered  accountant  in practice and in acting as a liquidator he has been guilty of conduct  which is absolutely unworthy of his status  and  it renders  him  unfit to be a member of  the  Institute.   We, therefore,  think that the ends of justice require that  the respondent’s  name should be removed from the  Register  for four  years.   In  regard  to  costs  we  direct  that   the respondent  should pay the costs of the appellants  in  this Court  and that the parties should bear their own  costs  in the court below. Appeal allowed. (1)  A.I.R. 1953 Madras 79. 387