Six months after a Delhi High Court order in the matter, National Spot Exchange Limited (NSEL) investor IGL Finance has initiated contempt of court proceedings against the Institute of Chartered Accountants of India (ICAI) and its disciplinary committee for not completing the proceedings in complaints against NSEL's auditor Mukhesh P Shah & Co. The contempt petition was filed in the Delhi High Court last week.
In two key prayers, the petition sought to hold the ICAI officials concerned guilty and liable for contempt of orders of the court and direct the institute to provide the petitioner with a copy of the 'prima facie' opinion in the complaint filed by the petitioner within one week.
An email seeking comments sent to the ICAI spokesperson did not elicit any response.
In May, the high court had disposed of a writ by IGL Finance after assurances by the ICAI's counsel of time-bound action. The investor said in its petition that despite repeated efforts, the institute has not done much. "The Petitioner has been continuously knocking the doors of the Respondent No 1, but the respondents/contemnors, despite repeated requests, on one pretext or another, have kept delaying the matter and avoiding the Petitioner," IGL said in its petition.
It added it had received a reply through the Right to Information (RTI) Act in August that the institute's director (discipline) had formed a 'prima facie' opinion on the complaints and the same was placed before the 'appropriate authority'. It had added the decision taken would be communicated in 'due course'. However, three months on, the ICAI has not disclosed what this opinion was. It has stonewalled subsequent queries and RTI appeals saying that the matter was "under investigation," the petitioner said.
The petitioner argued that ICAI's refusal to provide the copy of prima-facie opinion formed by the director (discipline) "is not only a direct and unequivocal violation of the Division Bench order passed by this Hon'ble Court on 05.05.2015 but is also in clear contravention to the Chartered Accountants (Procedure Of Investigations of Professional and other Misconduct and Conduct of Cases) Rules, 2007".
It added that Section 8 (1) (h) of the RTI Act, as mentioned in the reply sent by Respondents, was not applicable in the present circumstances, because of Rule 18 (2) of Chartered Accountants Rules, 2007. This rule mandated that if the committee decided to proceed further on the prima-facie opinion formed by the director (discipline), the committee shall expeditiously cause to deliver the respondent and the complainant, a copy of prima-facie opinion formed by the director along with the particulars and documents relied by the Director (discipline) in forming the opinion. "Thus, the Petitioner being one of the complainants in the present case is entitled to receive a copy of the prima-facie opinion," IGL Finance has said in the petition.