S.K. Sanyal vs Mirza M. Hussain

In this matter the Institute of Chartered Accountants have asked for further directions in respect of an order which we made on the 5th February, 1953. By that order we referred hack to the Institute, u/s 21 (3) of the Chartered Accountants Act, a reference made by them regarding a complaint against the respondent, Mirza M. Hussain. Our direction was that the Institute should hold a further enquiry as to three matters and forward their findings to us by the 30th November. 1953. The Institute have reported that since the receipt of our order they held two meetings of the Council at which the order was considered and the matter was referred to the Disciplinary Committee for the purpose of the further enquiry directed by us. The Disciplinary Committee is said to have held a meeting on the 30th November. 1953, at which the respondent is alleged to have not been present. It is stated further that the respondent has, in the meantime, ceased to be a member of the Institute by reason of his failure to pay the membership fee and the cessation of his membership took effect on and from the 1st April, 1953. In those circumstances, the Institute have asked for directions as to whether the Disciplinary Committee will now have any jurisdiction to continue the enquiry against the respondent who is no longer a member and they have prayed that if our answer be in the affirmative, the time for submitting the fresh report may be extended up to the 30th September, 1954.

The only difficulty felt by the Institute appears to be that the respondent has ceased to be a member. I may point out at once that if the removal of the respondent''s name from the list of members has in fact created a difficulty, such difficulty has been of the Institute''s own making. It does not appear either from the Act or from the Rules made thereunder that upon the failure of a member to pay his annual subscription the removal of his name from the list of members shall be automatic. On the other hand, section 20 of the Act distinctly provides that the Council of the Institute may remove from the Register the name of any member of the Institute, who has not paid any prescribed fee required to be paid by him. It is thus clear that in order to bring about the removal of a member''s name from the list of members, mere non-payment of the membership subscription by him is not sufficient, but an order by the Council is further required. We are unable to understand why the Council of the Institute, knowing that the present proceeding against the respondent was pending, at all exercised their discretion u/s 20(b) of the Act and removed the name of the respondent from the Register, thus making the respondent a non-member and bring into existence the difficulty to which the Institute complain. We understand that the removal took place sometime in July or August, 1953. The only excuse I can think of is that the implications of the removal of the respondent''s name from the list of members, while the present enquiry was pending, were not realised or properly appreciated.

The question, however, still remains whether the Institute, or the Disciplinary Committee set up by them, has any jurisdiction under the Act to hold or continue to hold an enquiry against a person who was a member in the past, but has ceased to be so. In our opinion, such jurisdiction exists. Unless that be so, it would be a simple affair for any member, against whom a proceeding might be launched and who might have good reason to apprehend that the finding was going to be adverse to him, to defeat the enquiry altogether by simply ceasing to pay the annual subscription and not renewing his membership. In our opinion, in order that full effect may be given to the purpose, which the relevant sections of the Act have clearly in view, the word "member" in section 21 must be construed as including a past member for the purposes of the enquiry contemplated by the section. It is of course plain that the person complained against must be a member at the time when the misconduct alleged against him was committed. Membership at that point of time is certainly essential and is, indeed, the foundation of the jurisdiction of the Institute to hold any enquiry at all. But not only is such membership at the time of the commission of the alleged misconduct essential, but it is also sufficient. Once it is shown that the person complained against was a member at the time when the misconduct alleged against him was committed, it is not further necessary, in order that the Institute of the Disciplinary Committee may hold an enquiry against him, that he should be or continue to be a member during the enquiry proceedings. It may, however, be that a person who has ceased to be a member will not respond to the requisitions of the Disciplinary Committee and will not participate in the proceedings held by it; but if he elects to keep away, he will do so at his own risk. The Disciplinary Committee will in such circumstances proceed with the enquiry and come to its finding on such materials as may be available to it and if the person complained against finds that a finding has been arrived at against him on inadequate materials, he will have only himself to thank. It may also be that if he does not assist the Disciplinary Committee in the course of its enquiry, by co-operating with it and leading before it such evidence as he may desire to rely on and if he allows an adverse finding to be recorded and subsequently to be ratified by this Court, he will be in serious difficulty if he ever applies for the restoration of his name in the Register of members. We have referred to these matters only for the incidental purpose of showing that the cessation of membership on the part of a member does not render the continuation of the enquiry purposeless, nor does it oust the jurisdiction of the Disciplinary Committee.

We, therefore, direct that the Disciplinary Committee should proceed with the enquiry, giving all reasonable opportunities to the respondent for appearing before it and presenting his case if he should still be inclined to do so. The time for furnishing the re-port is extended up to the 30th September, 1954, as prayed for. No directions are necessary as regards costs.