Case: Institute Of Chartered Accountants Of India Vs. M.S.Rathi

2. Disciplinary action was taken against the Respondent herein for issuing certificates for consumption of raw materials showing the value of imported raw material as CIF value to the units without seeing the records since imported value of the raw materials should have been shown as value of the raw materials and not the CIF value. Further, the units did not maintain any record for past production, still the certificates were issued which shows that the figures were manipulated and the certificates issued were not correct3. After taking into consideration the reply filed and the submissions made by the Respondent herein, the Disciplinary Committee vide order dated 12th January, 1995 held that the Respondent while issuing the certificates to the units had failed to obtain sufficient information to warrant the expression of his opinion and found him guilty of professional misconduct within the meaning of Clauses (7) and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 read with Sections 21 and 22 of the said Act. The matter was thereafter placed before the Council of the Institute of Chartered Accountants of India, hereinafter referred to as the Council. The Council, after considering the submission of the Respondent herein, vide order dated 17th January, 1998 agreed with the findings of Disciplinary Committee and decided to recommend to the High Court that the Respondent be reprimanded.

Court's reasoning:
Thus, no adverse inference can be drawn against the Respondent on this ground8. Neither the complainant nor the Disciplinary Committee have chosen to call for those books of accounts and, therefore, no adverse inference can be drawn against the Respondent on this ground9. We are in full agreement with the findings and observations made by the High Court. We do not find any good ground to interfere with the order passed by the High Court.