Disciplinary discretion under chartered accountants law upheld: procedural rule on Board disagreement was held consistent with the statute.

Section 21A(4) of the Chartered Accountants Act, 1949 was read as giving the Board of Discipline discretion to close a matter where the Director (Discipline) finds no prima facie case, or to seek further investigation if it disagrees. The Director's prima facie view was treated as tentative, with the final decision on misconduct remaining for the Board of Discipline or the Disciplinary Committee. Rule 9(3)(b) was held to fit within that statutory framework because it sets out the procedure when the Board disagrees, rather than limiting the Board's powers. Accordingly, the rule was not ultra vires section 21A(4).

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Issues: Whether Rule 9(3)(b) of the Chartered Accountants (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 is ultra vires section 21A(4) of the Chartered Accountants Act, 1949.

Analysis: Section 21A(4) requires the Director (Discipline) to place information and complaints before the Board of Discipline where no prima facie case is found, and empowers the Board, if it agrees, to close the matter or, in case of disagreement, to advise further investigation. The expression "may" in the provision was held to confer discretion, not a mandate to order only further investigation. The prima facie view of the Director (Discipline) was treated as tentative, while the final decision on misconduct remains with the Board of Discipline or the Disciplinary Committee. Rule 9(3)(b), which provides the procedural route when the Board disagrees, was held to supplement the statutory scheme and not to transgress it.

Conclusion: Rule 9(3)(b) is not ultra vires section 21A(4) of the Chartered Accountants Act, 1949.

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