State Govt has no power to prosecute a Chartered Accountant

The Gujrat High Court, in the Matter of NAMAN GYANCHAND PIPARA Vs. STATE OF GUJARAT has ordered that no power to prosecute a Chartered Accountant.

By way of these applications under Section 482 of the Code of Criminal Procedure, 1973 as well as under Section 226 of the Constitution of India, the applicant seeks quashment of the identical but separate FIRs impugned being C.R. No.02 of 2021, No.03 of 2021 and No.01 of 2021, respectively, registered with the ACB Police Station, Bharuch for the offences punishable under Sections 409, 465, 466, 467, 471, 477A and 120B of the Indian Penal Code and Sections 12, 13(1)(A) and 13(2) of the Prevention of Corruption Act.

Facts about the Case:

Since the applicant is the same in all the applications and the allegations are also same in all three complaints impugned, therefore, all these applications are heard and decided together with consent of the learned advocates for the respective parties. The brief facts of the prosecution case are epitomized as under:

The work of Khet Talavadi at various different survey numbers carried out by the Gujarat Land Development Corporation, Bharuch at village: Kharach, Taluka: Hansot, District: Bharuch. has been inspected by the authority, wherein it is found that the applications were made on behalf of the farmer without their knowledge by the officials of the said Corporation and thereby misused their powers, shown said Khet Talavadi on papers, shown wrong measurement in the record, made payment in the account of the particular Contractors, created false record in connivance with the unqualified employee/s appointed by the Pipara and Company, a Chartered Accountant Firm, who, thereby committed an offence of the Chartered Accountant Act. Hence, the impugned complaints.

Heard learned senior advocate Mr. Manish R. Bhatt with learned advocate Mr. Munjaal M. Bhatt for M.R. Bhatt and Company for the applicant and learned Additional Public Prosecutor Mr.Chintan Dave for the respondents–State Authorities, at length.

Learned senior advocate Mr.Bhatt for the applicant has submitted that the present applicant is a well-known leading Chartered Accountant and his name is falsely implicated in the offence in question. He has submitted that he is a member of the formulating, drafting and issuance of forensic audit standards by the Institute of Chartered Accountants of India. He has submitted that the Firm of the applicant is situated in New Delhi and therefore, he has to appoint official staff in Gujarat. He has submitted that the role of the office of the Chartered Accountant was to carry out 10% physical verification of the soil work carried out by each charge on the filed on a random basis and hence, due to his alleged negligence, the officers and contractors were able to do fraud. He has submitted that there is no whisper about the alleged fraud committed by the applicant in the impugned FIRs. He has submitted that out of the fraudulent transactions, there is no whisper about siphoning and/or pocketing money by the applicant.

In Support of Submissions, relied upon the following decisions:

1. (2001) 6 SCC 181 – T.T. Antony versus State of Kerala (Paras: 25 to 27)

2. (2013) 6 SCC 348 – Amitbhai Anilchandra Shah versus CBI (Paras:58.3 to 58.5 and 58.9)

3. (2020) 14 SCC 12 – Arnab Ranjan Goswami versus Union of India (Paras:31, 33, 37)

4. Criminal Misc. Application No.16909 of 2019, dated 13.09.2019 – Pravinbhai Balchandrabhai Premal versus State of Gujarat

5. Criminal Misc. Application No.4421 of 2021, dated 30.04.2021 – Bhaumik Dilipkumar Gandhi versus State of Gujarat

6. Relevant provisions of the Chartered Accountants Act, 1949.

Order:

1. All these applications are allowed.

2. The impugned FIRs being C.R. No.02 of 2021, No.03 of 2021 and No.01 of 2021, respectively, registered with the ACB Police Station, Bharuch are hereby quashed and set aside, qua the applicant only.

3. Consequently, the proceedings arising out of the impugned FIRs, if any, are also hereby quashed and set aside, qua the applicant only.

4. Rule is made absolute in all these applications accordingly.

Direct service is permitted.

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