Page 428 - CA Final PARAM Digital Book.

the drawer of the cheque, the drawer of such cheque shall be deemed to have committed an
offence.
Case 1
Part III – Case Discussion
➢ In the given case the cheque was dishonoured with the remark “Insufficient Funds”.

Part IV – Conclusion
➢ Therefore, CA D is liable for misconduct under Clause 2 of Part IV of the First Schedule of the
Chartered Accountants Act, 1949
Case 2
Part III – Case Discussion
➢ In the instant case, CA. Preeto, a CA, had an account with a bank from which she withdrew the
amount of ` 2,75,000 and closed the account. This amount of ` 2,75,000 was pertaining to ` 5,000
minimum balance and ` 2,70,000 belonging to other account holder and inadvertently credited to
his account by the bank.
Part IV – Conclusion

➢ The said act of CA. Preeto to withdraw the money which does not belongs to her will bring disrepute
to the profession. Hence under this clause the bank can file a suitable complaint under Clause 2 of
Part IV of First Schedule of the Chartered Accountant Act, 1949 with the Institute of Chartered
Accountants of India.
Author’s Note
In the first case it is important to mention Negotiable Instruments Act 1881 in the answer. Even though it
is important to mention this in the answer students don’t mention this and loose marks.

First Schedule, Part IV,Cl,2 --Disrepute to Institute Old Course – (M13E, M16M, PM17, N17M,
QNO (Failed to Return Books) N18M)
733.000
TITANIUM CNO – PE.1440
CA. X, a practicing Chartered Accountant, failed to return the books of account and other documents of
ABC Ltd. despite many reminders from the company. The company had settled his entire fees dues
also.
Answer Part I -- Relevant Laws
▪ Section 21 of the Chartered Accountants Act, 1949

▪ Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949
Part II -- Requirements of Relevant Laws
➢ Section 21 of the Chartered Accountants Act, 1949
A member is liable to disciplinary action under section 21 of the Chartered Accountants Act, 1949,
if he is found guilty of any professional or “Other Misconduct”.

➢ Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949
As per Clause (2) of Part IV of the First Schedule to the said Act, a member of the Institute, whether
in practice or not, shall be deemed to be guilty of other misconduct, if he,
• In the opinion of the Council, brings disrepute to the profession or the Institute as a result
of his action whether or not related to his professional work.
• Is held guilty by any civil or criminal court for an offence which is punishable with
imprisonment for a term not exceeding six months;

A member may be found guilty of “Other Misconduct” as per Clause (2) under the aforesaid
provisions rendering himself unfit to be member if he retains the books of account and documents
of the client and fails to return these to the client on request without a reasonable cause.

Part III – Case Discussion
➢ In the given case, CA. X failed to return the books of accounts and other documents of his client
without any reasonable cause.

Part IV – Conclusion
➢ Therefore, CA X would be held guilty of other misconduct under the aforesaid provisions.

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