05 February 2005	Saturday	25 Zilhaj 1425

KARACHI, Feb 4: The Sindh High Court set aside on Friday inquiry proceedings instituted by the Institute of Chartered Accountants of Pakistan against one of its members.

A division bench, comprising Chief Justice Saiyed Saeed Ashhad and Justice Maqbool Baqar, however, allowed the institute to initiate fresh proceedings for professional misconduct in accordance with the provisions of the Chartered Accountants Ordinance, 1961.

The petition was moved by chartered accountants Haider Shamsi and Company through Advocates Syed Sami Ahmed and M.A. Baig. The institute was represented by Advocate I.H. Zaidi and the federation by Deputy Attorney-General Syed Zaki Mohammad.

The petitioner company was proceeded against by the institute for publishing a newspaper advertisement to compliment the chairman of the Securities and Exchange Commission of Pakistan for introducing rotation of auditors and for barring the award of consultancy assignments to the auditors of listed companies.

According to the advertisement, the decision would provide an even playing field to smaller firms of chartered accountants, who would get rid of the monopoly/clout of 'the so-called five big firms'.

The institute called upon the petitioner to show cause why 'disciplinary action' for 'professional misconduct' under Section 20B of the 1961 ordinance should not be taken against it. The petitioner regretted the advertisement if it amounted to an affront and said it had no intention to malign the institute.

Subsequently, it also expressed regrets for not disowning the advertisement 'the very next day' of its publication. The explanation was not found satisfactory and an investigation committee found the petitioner guilty of professional misconduct and decided to report the matter to the institute's council. Feeling aggrieved, the petitioner moved the high court.

After discussing the requirements of Sections 20A and 20B of the Chartered Accountants Ordinance, the bench noted that there was nothing on record to indicate that the fact of publication of the advertisement was placed or laid by the institute's secretary before the investigation committee or that any member or aggrieved person had brought the alleged misconduct to the notice of the committee.

Without complying with the provisions of Section 20A, the manager of the institute issued a letter purporting to be a show cause notice to the petitioner.

Provisions of Section 20B were also violated inasmuch as a show cause notice was issued before placing the allegedly objectionable advertisement before the investigation committee and preparation of a preliminary report by it.

It, the bench observed, is a settled principle of law that when a statute requires a thing to be done in a particular manner or lays down the manner in which it is to be done, it is obligatory on the part of the person concerned to follow the mode and manner in letter and spirit.

The provisions of a statute are to be strictly adhered to. The institute committed a grave and serious illegality by overlooking the provisions of Sections 20A and 20B, the bench observed.