IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.ra No. 2505 of 2010 Reserved on: September 29, 2010 Decision on; November 22, 2010 TALLURI SRINIVAS Petitioner Through: Mr. S. Ganesh, Senior Advocate with Mr. R. Sudhinder, Mr. Vibhu Bakru, Mr. Rahul Ravindran and Ms. Prerana Amitabh, Advocates. versus THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA TFIROUGH: ITS SECRETARY & ANR. ..... Respondents Through: Mr. Rakesh Agarwal with Mr. Pulkit Agarwal, Advocate for R-l/ICAI. Mr. Jatan Singh, CGSC for R-2/UOI. And W^(C) No. 5352 of2010 SUBRAMANI GOPALKRISHNAN Petitioner Through:Mr. N.K. Kaul, Senior Advocatewith Mr. R. Sudhinder, Mr. Amit Sibal and Mr. Rahul Ravindran, Advocates. versus THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA THROUGH: ITS SECRETARY & ANR. Respondents Through:Mr. Ramji Srinivasan, SeniorAdvocate with Mr. J. J. Bakshi, Mr. Zeyaul Haque and Mr. Amitesh S. Bakshi, Advocates for R-l/ICAI. Mr. Ravinder Agarwal, CGSC for R-2/U0I. CORAM: JUSTICE S. MURALIDHAR 1. Whether reporters of the local news papers be allowed to see the judgment? 'f 2. To be referred to the Reporter or not? 3. Whetherthejudgmentshouldbe reportedin the Digest?u—^ JUDGMENT 22.11.2010 W.P.(C)Nos. 2505&5352of2010 ^ogre1of39 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified .1. Althoughthe facts in these two writ petitions are sHghtly different,th questions involved are more or less similar. Both Petitioners,being the members of the Institute of Chartered Accountants of India (ICAF), i.e. the RespondentNo. 1 in both the petitions seek to challenge a prima facie opinion dated 17^'' September 2009 arrived at by the ICAI and the disciplinaryproceedings thathave commenced consequentthereto. Both Petitioners seek a direction to the ICAI to keep the respective disciplinary proceedingsagainst them in abeyance till the conclusionof the criminal cases against each of them. Factual Background 2. The Petitioner in Writ Petition (C) 2505 of 2010, Mr. Talluri Srinivas ('Srinivas') is a CharteredAccountantby professionand a member of the ICAI since 1990. Srinivaswas a partnerwith M/s PriceWaterhouse(TW); a firm of Chartered Accountants registered with the ICAI. In the year 2000, PW were appointedas the statutoryauditorsof Satyam ComputerServices Limited ('SCSL'). While the statutoryaudits of SCSL for the years 200l. to March 2007 were conducted and the reports were signed by Mr. Subramani Gopalkrishnan('Gopalkrishnan')(thePetitionerinWritPetition(C) 5352 qf 2010),the statutoryauditfor the quartersendingon 30^*^ June 2007 and 30'" September2008 wereconductedandsignedby Srinivas. 3. On 7^^ January2009, Mr. B. RamalingaRaju, the then Chairmanof SCSL wrote a letter to his Board of Directors in which inter alia he disclosed that the balancesheetof SCSL as on 30"^ September2008 carriedinflated(non existent)cash and bank balancesofRs. 5,040/-crores (as againstRs. 5361 W.P.{C)Nos. 2505&5352of2010 Poge2of39 crore reflected in the books) and accrued non-existent interest of Rs. 376 crores, an understated liability of Rs. 1,230 crores on account of funds: arranged by him and an overstateddebtors position of Rs. 490 crores (as againstRs. 2651 croresreflectedinthe books).He also disclosedthat for the Septemberquarter,thecompanyhad reporteda revenueofRs. 2,10(il-crores and an operatingmarginof Rs. 649 crores (24% of revenues)as againstthe, actual revenue of Rs. 2,112 crores and an actual operating margin of Rs. 61 crores (3% revenues).This had resultedin artificialcash and banlcbalances' going up by Rs. 588 croresin the SecondQuarteralone. Mr. Raju tendered his resignationas the Chairmanof SCSL and statedthat he was preparedtq subjecthimselfto thelaw ofthe landand face the consequencesthereof.. 4. On lO^'' January2009, the ICAI wrote a letter to M/s Price Waterhouse: Bangalore (PW, Bangalore)referringto the letter dated 7"" January 2009 addressedby Mr. Raju to the Board of Directorsof SCSL. It was statedby the ICAI that from the perusal of the said letter of Mr. Raju and. the newspaperreports,it emergedthatthe auditfiguresfor the years2004-05till the quarter ending on 30'*" September 2008 had been certified by PW, Bangaloreas reflectingthe true and fair pictureof the accounts,which was now admitted even by the Chairman of SCSL to be incorrect. This meant that the PW, Bangalore"had failedto carry out necessarycheckswhich are required while undertaking the audit of the financial statements-and certifyingthe quarterlyresultsof the company."ICAI allegedthat the-PW, Bangalorehad violatedthe accountingprincipleswhile auditing/certifying the accounts/quarterly results of SCSL for the aforementioned years/Quarters;that in spiteofthe aforestatedirregularities/manipulationsin W.p.(C) Nos. 2505&5352of2010 Poge3of39 0< the financial statements, PW, Bangalore had stated that financial statements together with the notes thereon gave a true and fair view; that PW, Bangalorehad failed to disclosematerialfacts which were not disclosedin financial statements of SCSL; that it had failed to report material mis- statementknown to it as statutoryauditors, which appeared in the financial statements of SCSL. It was thus alleged that PW, Bangalore did not exercise due diligenceand was grossly negligentin the conductof its professional duties as statutory auditors of SCSL for all these years. 5. In the said letterdated lO"" January2009 addressedto PW, Bangalorethe ICAI stated that the letter dated January 2009 of Mr. Raju and the newspaperreportshad been treatedas "information"withinthe meaning.;©f Section21(2) of the CharteredAccountantsAct, 1949 [as amended by the Chartered Accountants (Amendment) Act, 2006 with effect from 17-'' November2006] (hereinafter'CA Act'). PW, Bangalorewas calledupon."to disclose the name or names of the member or members who is/are answerableto the allegation/sand send a copy of the aforesaidinformatlQii letteralong with its enclosuresto the said member/membersand he/theybe requestedto send his/theirWrittenStatement,if any, in triplicate,within21 days of the receiptof this letter." It was ftirtherstatedthat the memberor members answerable, should also send a declaration duly signed in the enclosed format and iri the event that the name/s of member/s answerable was not disclosed "then all the members who were partners or employeesof the firm on the date of occurrence of the alleged misconduct, shall ^be responsible for answering the allegation or allegations contained in the information."On 14^*" January 2009, similar notices were sent to Price W.P.{C)Nos. 2505&5352of2010 Page4of39 Waterhouse, Kolkata (TW, Kolkata') and Price Waterhouse, New Delhi (TW, New Delhi'). . . 6. On30^^ January2009,PW repliedtotheICAI stating,interalia:- "As regards the furnishing of the names of member/s that are answerable to the allegations, key members are as under: ^ 1. Mr. S. Gopalkrishnan,Partner (MembershipNo. F - 18863),^ for the period April 1, 2000 to March 31, 2007. 2. Mr. S. Talluri, Partner (Membership No. F - 20864) for the period April 1, 2007 to September 30, 2008. 3. Mr. P. Shiva Prasad (Membership No. 204076) for the period. 5• April 1, 2001 and March 31, 2005. 4. Mr. C.H. Ravindranath (Membership No. 204494) for the period April 1, 2005 and September 30, 2008." 7. PW also informed that Gopalkrishnan and Srinivas had been arrested by the localpoliceandwere,therefore,out of reach.TheICAI was requestedto grant all the members, whose names were disclosed, some more time to respondto the noticedated lO'^ January2009. PW also gave its responseto the queriesraised.As mentionedhereinbefore,on 23^''January2009 Srinivas was arrested.Gopalkrishnanwas arrestedon 24^^^ January2009. 8. On 20'^ February 2009, the criminalinvestigationwas transferredto the Central Bureau of Investigation ('CBI') and RC No. 4(S)/2009 was registeredagainstGopalkrishnan,Srinivasand seven other accusedpersons under Sections 409, 420, 468, 471, 477-A, 201, 120-B IPC. 9. At the instance of the CBI, a Multi Disciplinary Investigation Team ('MDIT')was constitutedand a reportwas preparedby the ICAI Group-oii W.P.(C)Nos. 2505&5352of2010 Poge5of39 April 2009. In para 1.2 of the said reportit has been mentionedthat Mr; Uttam Prakash Agarwal, President of the ICAI and Mr. Amarjit Chopra, VicePresidentoftheICAI,representedtheICAI in the MDIT. In Para 1.3; it is statedthat Mr. Agarwalconstituteda group of local CharteredAccountant professionalsfrom Hyderabadunder the convenorshipof Mr. Shanti Lai Daga, a member of the Central Council of ICAI, based in Hyderabadto providerequisitesupportandtohelpthe CBI inits investigationofthe sc^rn, It is stated that Mr. Daga then led the group and interactedwith Mr. V.Y;. Laxmi Narayana,the DIG who was headingthe probe, and Mr. J.L. Negi, the Coordinator of the CBI investigationteam. Para 1.4 of the report of the ICAI Group states that the Group has been entrusted with the "task of verificationof compliancesor otherwiseby Price Waterhouse,the auditors of the company, with various auditing and assurances standards and guidancenotesissuedby ICAI, in respectof cash and bank balances,sales, receivables,interest accrued and tax deducted at source relating to fixed deposits and its impacton financialreportingand auditor'sreportthereohl Therefore,the verificationby the Group is limited to the above heads of account of the financial statements." The report further stated that the IQAI Group had "restrictedits enquiry to the aforesaidheads of accounts and relatedmattersfor the years ending 31^' March 2005, 31^*^ March 2006, 3.1 •• March2007, 31'^March2008 and for the quartersended 30"" June 2008 and 30^*^ September2008." 10. The ICAI Group in para 19.1 of its report arrived at the following conclusions: "19.1 The statutory auditors have failed to exercise reasonable W.P.(C)Nos. 2505&5352of2010 Page6of39 care and compliance with various auditing and assurance standards issued by the Institute of Chartered Accountants of India as a generally accepted auditing practice while reporting on the financial statements and the materiality of the misstatements are so huge that it has rendered the financial statements for all these years as untrue and unfair. However, the executive, management and staff have drawn substantial amounts as , remunerations, commission, incentives, bonuses, ESOPs. The management has also declared the dividends to its shareholders under the Companies Act, 1956. However, all these overstatements and misstatements have reported the EPS at a higherlevelin the financialreportingannuallyas well as quarterly which has directly impacted the movement of the share prices in. the stock exchanges market in India and abroad." 11. On 7^*" April 2009, the CBI filed its first chargesheetin the Courtof the AdditionalChiefMetropolitanMagistrate('ACMM') namingthe Petitioners Gopalkrishnanand Srinivasand sevenothersas accusedpersons.Amongthe documentsreliedupon by the CBI was the reportof the ICAI Group,which was a part of the MDIT. 12. Under Section 21(2) of the CA Act, on receipt of any information-©r complaintby the ICAI, the Director (Discipline)should arrive at a prima facie opinion on the occurrenceof the allegedmisconduct.Under Sectiori 21(3),it is statedthatwherethe Director(Discipline)is ofthe opinionthat a memberis guiltyof any professionalor other misconductmentionedin, the First Schedule to the CA Act, then the matter will be placed before ,the Board of Disciplineand where the Director(Discipline)is of the opinion that a memberis guilty of any professionalor other misconductmentioned W.P.(C)Nos. 2505&5352of2010 Poffe7of39 in the Second Schedule or in both the Schedules, then the matter will he placed before the Disciphnary Committee. 13. The Director (Discipline)placed the primafacie opinion dated l?'*" September2009 before the DisciplinaryCommittee. The view expressed therein was that Gopalkrishnanand Srinivas were prima facie guilty,of professionalmisconductwithinthe meaningofClauses(5), (6), (7), (8) and (9) ofPart I ofthe Second Scheduleto the CA Act. Aprimafacie opinion was also formed that the two Petitioners were guilty of other misconduct withinthe meaningof Section22 read with Section21 of the CA Act. . 14. On the basis of the aboveprimafacie opinionwhichwas consideredby the DisciplinaryCommittee,a separatenotice dated 8^^ October2009 was. sent by the ICAI to each of the Petitionersenclosingthe copy of the prima facie opinionand asking each ofthem to send theirwrittenstatementalong with supportingdocumentsand a list of witnesseswithin 21 days. At th^t pointoftime,boththe Petitionerswere injudicialcustody. .~ 15. On 22"'' November2009, a supplementarycharge sheetwas filed by the CBI. Asecondsupplementarychargesheetwas filedon 7* January2010. 16. On 4"" February2010, Srinivaswas grantedbail by the SupremeCourtin Crl. AppealNo. 257 of2010.Therelevantportionofthe orderread as under:.: "We do not expressany opiniononthe meritsof this case regarding. the nature of offenceor gravitythereof allegedlycommittedby the accused-appellant. W.P.(C)Nos. 2505&5352of2010 PoQe8of39 Havingregardto the fact that the appellanthad been in custodyfor more than one year, we are of the view that he be released on bail subject to certain conditions 1. The appellant is permanentresident of Hyderabad. He will reportto the investigatingofficer- S.P. (C.B.I.)once in two months in the first week. 2. The appellantshall appearin Court as and when the case is posted for hearing. 3. The appellant shall be available for further interrogation/investigationas and when required on the written requisition by the investigating agency. 4. The appellant shall not tamper with any evidence and shall not influence the prosecution witnesses. 5. The appellant shall execute bail bonds of Rs.20 lacs (Rupees twenty lacs only) with two solvent sureties of the like amount to the satisfaction of the Trial Court. 6. On executing the bail bonds he be released on bail pending trial." 17. On26'''February2010,noticeswere issuedby the ICAIto Srinivaswith respectto the disciplinaryproceedingspendingagainsthim as well as Mr. Ch. Ravindranath.On 26^^ March 2010, Srinivasrepliedto the ICAI stating, that Mr. Ravindranath had been cited as a witness in the criminal case pendingbeforethe SpecialCourt,CBI againstSrinivas.The proceedingsfor which the ICAI had summoned Srinivas as a witness in the disciplinary ' proceedingsagainst Mr. Ravindranatharose from the very same acts of allegedomissionor commissionwhich formedthe basis for variouscha;rges alleged against Srinivasin the pending criminalcase. Accordingly,it was submittedby Srinivasthat his appearanceas a witness in the disciplinar}' W.P.(C)Nos. 2505&5352of2010 Page9of39 proceedingsagainstMr. Ravindranathwould severelyprejudicehis position in the criminal cases pendingtrial. As regards the disciplinaryproceedings against himself, Srinivas pointed out that he would be dealing with it separately.By a separateletterdated 26'^ March 2010, Srinivasstatedthat- the disciphnaryproceedingsagainsthim shouldbe deferredsincethe alleged acts of omission or commission on the basis of which disciplinary, proceedings had commenced formed not only the basis of prima facie opinion but also formed the basis for various charges against him in the criminal cases. Srinivas expressedhis apprehensionthat "any disclosure ©f my explanationsor defenses until the final conclusion of my aforesaid, pending criminal trial before the Special Court at Hyderabad, would seriouslyimpactmy defencein the abovecriminaltrial." 18. On 6"" April 2010, the ICAI wrote to Srinivasaskinghim to attendas:a witness in the disciplinaryproceedingsagainst Mr. Ravindranathfailing which he would be subject to the consequence of non-attendance as,laid down in Rule 12 of Order XVI of the Code of Civil Procedure, 1908 read with Section 21-C of the CA Act. By a separate communication received by Srinivason 9^^ April 2010,the ICAI informedhim that althoughthe hearing on 30'" March 2010 had been adjourned by the Disciplinary Committeej-the scope of inquiry by the DisciplinaryCommittee and that of the criminal court were on a separatefooting and, therefore,at the next date of hearing, i.e. 18^'' April 2010, he should remain present and further that ,ho adjournmentwouldbe grantedunder any circumstances. 19. W.P. (C) 2505 of2010 was filedby Srinivasin this Courton 15^^ ApriJ W.P.(C)Nos. 2505&5352of2010 Page10of39 2010. On 16'^ April 2010, while directingnoticeto issue in thepetition,this Court directed that the hearing fixed before the Disciplinary Committee of the ICAI on 18* April 2010 would be postponed by ten days. In the meanwhile, the Petitioner was to prepare and file a chart to show the exact allegationsin the charge-sheetofthe CBI and thosein the showcausenotice issued by the ICAI in the disciplinary proceedings. 20. On 25* June 2010 Gopalkrishnanwas grantedbail by the High Courtof Andhra Pradesh subject to the following conditions:- - .v;; "1. The petitioner-A.4shall execute bail bond of Rs.20,00,000/- (Rupeestwentylacs only) with two solventsuretiesof the amount to the satisfaction of the Additional Chief Metropolitan Magistrate, Nampally,Hyderabad,whereas petitioner-A.10 shall executebail bond of Rs.20,00,000/- (Rupees twenty lacs only) with two solvent sureties of the like amount to the satisfaction of the XIV Additional, Chief MetropolitanMagistrate,Hyderabad. 2. In view of the fact that the Investigation is still in progress in connection with diversion of funds, the petitioners are directed to reportbeforethe investigatingagency,daily at 10 a.m until further orders. 3. The petitionersshall appearinthe Courtas and whenthe case is posted for hearing. 4. The petitionersshallbe availablefor furtherinterrogationas and when required, on the written requisition by the investigating agency. 5. Thepetitionersshallnottamperwithany evidenceand shallnot influence the prosecution witnesses. 6. On executingthe bail bonds they be releasedon bail pending trial. However,theprosecutionis at libertyto file cancellationof bail, if it is broughttothenoticeoftheprosecutingagencythatthe present W.P.(C)Nos. 2505&5352of2010 Page11 of39 () petitionersviolatethe conditionsimposedby this Court." r 21. On 6"" July 2010, two separate letters were sent by the ICAI to Gopalkrishnan.One requiredhim to appearas awitnesson 23'^ July 2010 at 2 pm in the disciplinaryproceedingsagainstMr. Ch. Ravindranathand Mr. P. Shiva Prasad who had both managed audits with the PW, Bangalore. In the other letter, Gopalkrishnanwas asked to appear on 23"^ July 2010 at 3 pm in the disciplinaryproceedingsagainsthim. By separatelettersdated 19.^'' July 2010, Gopalkrishnanexplainedwhy he could not appear either as a witness in the disciplinaryproceedingsagainst Mr. Ravindranathand Mr. Shiva Prasad and also in the disciplinary proceedings against himself. This was more or less on the same lines as the stand of Srinivas. 22. Thereafteron 26^^ July 2010, by separate letters, the ICAI required Gopalkrishnanto again appear before the DisciplinaryCommitteeon 12"^ August 2010 with reference to both the enquiries initiated against Mr. Ravindranath and Mr. P. Siva Prasad as well as the one pending against him. In the circumstances,Gopalkrishnanfiled W.P.(C) 5352 of 2010 in this Courton 6'^ August2010. 23. As regards the plea of Gopalkrishnanthat he should not be asked to appear in the disciplinaryproceedingsagainst Mr. Ravindranathand Mr. Shiva Prasad, after hearing the submissions of counsel for both, the Petitioneras well as the ICAI,this Courton 9"" August2010 whiledisposing of the CM No. 10545 of 2010 passed the following order: "1. Notice. Mr. Tiku and Mr. Ravinder Agarwal, CGSC accept.. W.P.(C)Nos. 2505&5352of2010 Page12of39 noticeon behalfofRespondentNos.1and 2. ^ 2. There are two inquiriesfor whichtwo separatenoticesdated26*'' July 2010 have been issued to the Petitionerby the Institute of Chartered Accountants of India ('ICAF). The first show cause notice (at page 222 of the paper book) is regardingthe inquiry' againstthe Petitionerhimselfin whichhe has been askedto appear beforethe DisciplinaryCommitteeon 12"^August2010. ;' 3. In regard to the above inquiry, it is not in dispute that the Petitioner was head of the audit team of Price Waterhouse, the firm who were the statutory auditors for Satyam Computers Services Ltd for the years 2000 to 2007. He is facing criminal proceedings and a chargesheetin this regard has been filed againsthim by the Central Bureau of Investigation ('CBF). He was granted bail by the High Court of Andhra Pradesh. This case is pending in the court of concerned Additional Chief Metropolitan Magistrate at Hyderabad. 4. Mr. Talluri Srinivas, the Petitioner in Writ Petition (Civil) No. 2505 of 2010 was the head of the audit team of Price Waterhouse for the subsequentyears 2007 to 2009. He too is facing criminal trial,pursuantto the chargesheetfiled by the CBI in his case. This Court had passed an interim order on 16^*^ April 2010 in W.P.(C)No.2505 of 2010 postponingthe date ofthe disciplinao^ proceedings against Mr. Srinivas before the Disciplinar5'^ Committee of the ICAI. The said interim order has continued. The saidwritpetitionis listedin this Courtnexton 20'^ October2010. 5. Mr. Kaul, learned Senior counsel appearing for the Petitionef submits that as far as the enquiry against the Petitioner is concerned,the questionof lawraisedin the presentwritpetitionis identical to the question of law raised by Talluri Srinivas and, therefore, a similar interim relief should be granted to the Petitioner. W.P.(C)Nos. 2505&5352of2010 Page13of39 6. Mr. Kaul points out that, as done in the case of Mr. Srinivas, the Petitioner too has produced a chart to show that there is an overlapof the disciplinaryand criminalproceedings.He statesthat the Petitioner's case is covered by para 22 (ii) of the judgment of the Supreme Court in M Paul Anthony v. Bharat Gold Mines Ltd. (1999) 3 see 679. 7. Havingconsideredthe abovesubmissions,this Courtdirectsthat the disciplinary proceedings against the Petitioner shall remain stayed till the next date of hearing. 8. The secondnoticedated 26"" July 2010 requiresthePetitionerto remain present as a witness in the disciplinary proceedings initiated against Mr. P. Siva Prasad and Mr. Ravindranath which has also been fixed for 12^*^ August2010. Both Mr. P. SivaPrasad and Mr. Ravindranath have been cited as prosecution witnesses by the CBI in the chargesheet filed against the Petitioner. It is submitted that the Petitioner may not be compelled to make any statement before the Disciplinary Committee that may prejudice his defence in the criminal trial. 9. Mr. Tiku, on the other hand, submits that the Petitioner has been cited .as a witness by the above two persons and the Respondent ICAI is under an obligation under the statute to summon him. He, nevertheless, states that the Petitioner will be under no compulsion to make any statement before the Disciplinary Committee which he might think will prejudice his defence in the criminal trial. Mr. Tiku added that if the Petitioner appearsbefore the DisciplinaryCommitteeand statesthat he does not wish to make any statement in view of the pending criminal trial, the DisciplinaryCommitteewill not insist on his making a statement. 10. In view of the above statement of Mr. Tiku, there is no need for this Court to directthe postponementof the proceedings against W.P.iC)Nos. 2505&5352of2010 Page14of39 ^ • Mr. P. Siva Prasad and Mr. Ravindranath scheduled for 12"' August 2010. The Petitioner is under no compulsionto make any statement which might prejudice his defence in the criminal proceedings. No adverse inference will be drawn by the Disciphnary Committee if the Petitioner declines to make a, statement. 11. Mr. Kaul states that in view of the fact that the Petitioner is - , requiredto appearbeforethe CBI on 12'^August2010 at 10 am, he may be permitted to appear before the DisciplinaryCommittee after 1 pm. Mr. Tiku statesthat there will be no difficultyin this regard. 12. The application stands disposed of" Submissions of Counsel 24. Mr. S. Ganesh, learned Senior counsel appearing for the Petitioner Srinivas,refers to the specificparagraphsof the CBI's charge sheet and the parasoftheprimafacie opinionformedby the Director(Discipline),ICAIto show that the subject-matterof both the disciplinaryproceedingsas well as the criminalcase in the SpecialCourt, CBI against Srinivasare more or less identical. Referring to the list of witnesses cited by the CBI, he points out thatthe Superintendentof Police(SP), CBI as well as the GeneralManager, SEBI whose statements were relied upon in the disciplinary proceedings, are also the witnesses in the criminal trial. If Srinivas were to cross-examine .the SP, CBI in the disciplinaryproceedingsthen he will be requiredto disclose his entire defence and the cross-examination in.the criminal case will be an emptyformality.He pointedout that Mr. UttamPrakashAgarwal,President of the ICAI was also cited as a witness in the criminal trial, and he is also a witnessin the disciplinaryproceedings.A referenceis also made to a news W.p.(C) Nos. 2505&5352of2010 Page15of33 item where the ICAI was reported to have requested the CBI and the SEBI to share the evidence gatheredboth against Srinivas and Gopallorishnananid they had also requested the CBI and the SEBI to be their witnesses. A referencewas made to the report dated 5^^ April 2009 of the ICAI Group, whichformeda partoftheMDIT,the conclusionsofwhichformedthe basis for the prima facie opinion dated l?^'^ September 2009 of the Director (Discipline).The saidreportofthe ICAI Group also formedthe basis ofthe charge sheet. Relying on the judgmentsof the Supreme Court in M. Paul Anthony v. Bharat GoldMinesLtd. (1999)3 SCC 679 andIndian Overseas Bank V. P. Ganesan (2008) 1 SCC 650, it is submitted that since ..the criminal case against Srinivas is on identical facts as in the disciplinary proceedingsinitiatedby the ICAI and the chargesin the criminalcase wer§ of a grave nature, the disciplinaryproceedingsshould be.stayed till the conclusion of the criminal case. He submitted that since the Special Court, CBI is proceedingwiththe case whichis at the stage of framingof charges., and there is no other case before that court, the criminal trial is not expected to take any further time. It may be mentionedhere that after the hearjjrig. concluded,counselfor the Petitionersplaced beforethis Court a copy of an order dated 26'^ October2010 passedby the SupremeCourt in Crl.A. Nos, 2068-72 of 2010 cancelling the bail granted to Mr. Raju and four other accusedpersonsand directingconclusionofthe trialbythe SpecialCourtby 31^'July 2011. .• >- 25. Mr. Ganesh further submitted that it was not open to Srinivas to exercisq any rightofsilencebeforethe DisciplinaryCommitteeofthe ICAI and ifhe does so, an adverse inference could be drawn against him by-the W.P.(C)Nos. 2505&5352of2010 Page16of39 DisciplinaryCommitteein regard to the very same charges which formed the subjectmatterofthe criminalcase.He would,therefore,be compelledto disclose his defence and this would be violative of his fundamental right againstself-incriminationunderArticle20(3). 26. Appearingfor Gopalkrishnan,Mr. N.K. Kaul, learned Senior counsel pointed out that soon after the statement made by Mr. Raju, both Gopall<xishnanand Srinivashad been suspendedfrom PW. Gopallcrishnan, had since retired from PW. Mr. Kaul doubted the objectivity of the . proceedingsbeforethe DisciplinaryCommitteesincethe reportof the ICAI Group headed by its President and consisting of its Vice-President.had alreadyformedan opinionin theirreportdated5* April2009,whichformed the basis of the prima facie opinion of the Director (Discipline). The disciplinaryproceedingsconductedby the ICAI after such pre-judgmentof the conduct of the Petitioners was unlikely to be fair or objective. He alsc) referred to a statement made in the counter affidavit at para A of.the PreliminaryObjectionsthat "the discretionaryjurisdictionof this Hon'ble Court may thereforenot to be permittedto be used by the unscrupulous CharteredAccountantsas they are a part of the conspiracyinvolvinga fraud" of Rs. 7000 crores." Mr. Kaul submitted that statements like these betrayed the