Facts of the Case

The complainant, CA Brij Mohan Barwal, proprietor of M/s Barwal & Associates, appointed the respondent, CA Durgesh Kumar Mishra, as an employee on 29.04.2019. Prior to proceeding on leave for marriage from 12.02.2021 to 08.03.2021, the respondent was provided a Dell laptop and advances aggregating to approximately ₹1,00,000 for personal exigencies. After completion of leave, the respondent did not resume duties in the normal course, took copies of client data, and subsequently joined another employment without completing assignments or handing over work, assets, and data as required under the firm’s policies.

The complainant alleged breach of the appointment letter, including failure to serve the stipulated notice period of 60 days, joining another employment without prior intimation or consent, non-return of firm assets, non-clearance of advances, and consequential losses including reputational damage and loss of client assignments. Disciplinary proceedings were initiated under Section 21A of the Chartered Accountants Act, 1949.

Issues Involved

Whether the respondent Chartered Accountant was guilty of “Other Misconduct” under Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949, whether breach of the employment contract by not serving the notice period and joining another employment without prior intimation constituted professional misconduct, and whether disciplinary punishment was warranted.

Petitioner’s Arguments

The complainant submitted that the respondent was bound by the appointment letter which clearly stipulated a notice period of 60 days and restrictions on taking up other employment during the term without prior permission. It was contended that the respondent violated these conditions, failed to complete pending work, did not hand over data and assets, and joined another organisation, thereby causing operational disruption and loss to the firm. The complainant relied upon the appointment letter, communications, and sequence of events to substantiate the charges.

Respondent’s Arguments

The respondent contended that he tendered resignation during the relevant period and that pending work had been transferred. He also stated that his resignation was not acknowledged by the complainant and pleaded that there was no mala fide intent. The respondent sought leniency and submitted that disputes were contractual in nature.

Court Order / Findings

The Board of Discipline examined the appointment letter dated 27.10.2020, which provided for a notice period of 60 days for resignation and restrictions on accepting other employment without prior written permission. The Board noted inconsistencies in the respondent’s statements regarding dates of resignation and joining of other employment, absence of acknowledgment of resignation by the complainant firm, and evidence indicating that the respondent joined another organisation without serving the notice period and without obtaining consent.

The Board held that the respondent’s act of joining other employment without serving the stipulated notice period and without prior permission constituted a clear breach of the employment contract duly accepted by him. Such conduct, the Board observed, brought disrepute to the profession and amounted to “Other Misconduct” within the meaning of Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.

Important Clarification

The Board clarified that members of the profession are expected to adhere to contractual commitments and ethical standards in professional employment. Breach of an accepted employment agreement, particularly by joining another employment without serving the notice period or obtaining requisite permission, constitutes professional misconduct irrespective of subsequent explanations.

Final Outcome

The Board of Discipline held the respondent, CA Durgesh Kumar Mishra (M. No. 558358), guilty of Other Misconduct under Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. The Board directed removal of the name of the respondent from the Register of Members for a period of one (1) month.

Source Link- https://www.mytaxexpert.co.in/uploads/1768899139_CA.BrijMohanBarwalCA.DurgeshKumarMishraM.No.558358NewDelhi.pdf

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