TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 1225
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....2017 sending therewith a copy of the judgment dated 07.10.2013 of the Hon'ble Delhi High Court in the Cr.LA no. 828 of 2009 filed by you. Relying on the aforesaid judgment dated 07.10.2013, you have stated that the Hon'ble High Court of Delhi has acquitted you from the charge levelled under Section 376(2)(g) of the Indian Penal Code, 1860. However it has been noticed that vide the same judgment, the Hon'ble Delhi High Court has convicted you under another Section 354 of the Indian Penal Code, 1860, i.e., 'Assault or criminal force to woman with intent to outrage her modesty' and also maintained your earlier conviction under Section 506-II of the IPC i.e. 'Punishment for criminal intimidation' (para 109, 110 and 113 of judgment). It has further been noticed that you had filed an application u/s 4 and 6 of the Probation of Offenders Act, 1958 read with Section 482 of the Code of Criminal Procedure Crl. M.A. No. 1117/3014 in Crl. Appeal No. 828/2009, seeking probation in terms of your conviction which was dismissed by the Hon'ble Delhi High Court vide its judgment dated 12.11.2014. In this connection, it is informed that the above matter along with your letter dated 27.01.2017 w....
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....0 by the Hon'ble Delhi High Court, vide judgment dated 07.10.2013 the Cr. LA No. 828 of 2009. In this connection, it is informed that the matter is now listed for hearing before the Council on 24th September 2020. You are hereby advised to appear before the Council on 24th September 2020 at 3:00 PM in the premises of the Institute located at ICAI Bhawan, Indraprastha Marg, New Delhi- 110002 to explain as to why action under Section 8(v) read with 20(1)(d) of the Chartered Accountants Act, 1949 should not be taken against you in view of your conviction under Section 354 and 506-II of the Indian Penal Code, 1860. Alternatively, you may also appear before the Council through Video Conference on the scheduled date and time for which separate link will be sent to you through Email at your request. You may also send your written submissions, if any, within 7 days of the receipt of this letter. It may also be noted that if no response is received from you in the matter within the stipulated time and/or you do noy avail the opportunity of hearing before the Council on the date, time and venue as specified above, the matter will be considered and decided by the Council without any fur....
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.... approximately 7 months, and a fine of Rs. 25,000/-. 8. Thus, after his enrolment as a CA, he was convicted and sentenced. He underwent imprisonment until suspension, for approximately seven months. Thereafter, however, he has continued to render his services as a CA. 9. After the decision in his Appeal challenging the conviction, the Petitioner filed an application on 6th January 2014, before the High Court under Sections 4 and 6 of the Probation of Offenders Act, 1958 read with Section 482 of the CrPC. In the said application he sought benefit of probation on the ground that the sentence already undergone by him would cast a stigma on his profession and he would be disqualified by the ICAI. The said application was negatived by a ld. Single Judge of this Court, vide judgment dated 12th November 2014, on the ground that once the Criminal Appeal had been disposed of, the Court had no power to alter its judgment, except to correct a clerical or arithmetical error. Given the fact that the period of conviction was already undergone, the Court held that it had become functus officio. The relevant portion of the said order reads: "This Court notes that after the appeal had been disp....
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....the Act should not be taken against him. He was also given liberty to file a written response to the said notice. On 26th October 2018, the Petitioner filed his detailed written response to the said show cause notice. On 14th September 2020, the impugned notice was served upon the Petitioner intimating him of the next date of hearing in the matter being 24th September 2020, to explain as to why he should not be disqualified under Section 8 of the Act. 13. Upon receiving the said impugned notice, the Petitioner filed the present writ petition to quash the said notice, as also the proceedings against him, on the ground that Section 8(v) was not applicable in his case. Proceedings in this writ petition: 14. Notice was issued in the present writ petition on 23rd September 2020, and Mr. Atul Kumar Gupta, the then President of ICAI, against whom allegations of malafide were raised, was impleaded in this petition as Respondent No. 3. On the said date, upon an assurance given on behalf of Respondent No. 1, the proceedings before the ICAI scheduled to be held on 24th September 2020 were postponed during the pendency of the present petition. In effect therefore, the proceedings pursuant t....
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....stry has clearly opined in the said letter that the Petitioner's case does not fall within Section 8(v) of the Act, as the incident was not professional misconduct, and in fact took place prior to the Petitioner acquiring his professional qualification. 20. Appearing in person, Mr. Bansal, has relied upon the judgment of the Andhra Pradesh High Court in Ch. Ramakrishna Rao v. State (Crl.A.M.P.No.751 of 2014 and batch, decided on 20th October 2014) to submit that offences under Section 8(v) would only be applicable if the accountant has committed an offence in professional capacity. He submits that in his case the offence was during his student days, i.e., during the year 2001 and he only qualified as a CA in 2008. He, thus, submits that the disability under Section 8 would not be applicable to his case, as the words 'in professional capacity', in the said provision, would have to be read along with its initial part, and there is no link to the offence committed by him with his services as a CA. 21. Mr. Bansal further relies upon the manual for members and students, which is circulated as part of the Background Material for orientation programs by the ICAI, to submit that on page ....
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....Ghosh and ors. v. ICAI, 2009 (111) BOMLR 1874; (v) Manubhai v. Secretary, ICAI, 2020 GLH (2) 545. 24. Mr. Bansal, then relies upon the judgment dated 7th October 2013 by which he was convicted by this Court under Sections 354 IPC and Section 506-II IPC and was acquitted under Section 376(2)(g) IPC, to argue that his conviction was for the period of sentence already undergone, i.e., 7 months. No further sentence was levied on him, and the period undergone along with a fine of Rs. 25,000 was considered sufficient. 25. Finally, Mr. Bansal submits that the show cause notice issued claims to have been issued under Section 8(v) read with Section 20(1)(d) of the Act, and he has filed his detailed reply to the said notice. However, he has no confidence that he would be treated fairly by the ICAI. He does not accept the proceedings against him to be fair and non-arbitrary, inspite of the President of the ICAI having been changed. Submissions on behalf of the Respondents: 26. Mr. Srinivasan, ld. Senior Counsel, appearing along with Ms. Pooja Sehgal, ld. counsel, for the ICAI, submits that a reading of Section 8(v) of the Act would clearly show that it covers an offence involving moral ....
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....ional capacity alone. 29. Reliance is then placed upon the judgment of the Madras High Court in P. Mohanasundaram vs. President, ICAI (W.A. No. 1662 of 2010, decided on 30th April 2013), which involved a CA who was alleged to have been guilty of bigamy. A division bench of the Madras High Court had interpreted the purport of Section 8(v) of the Act and held that the conviction for bigamy having been upheld, inspite of the sentence having reduced, the decision to remove the name of the person convicted from the register on the ground of 'moral turpitude' is valid. 30. On a query from the Court as to whether there can be a lifelong ban on any person who has been convicted of any offence involving moral turpitude from becoming a CA and whether the same would be violative of Article 19(1)(g), Mr. Srinivasan, drawing an analogy with the interpretation of a similar provision, relies upon Section 24A(1)(a) of the Advocates Act and the judgments of the Supreme Court in Mahipal Singh Rana v. State of UP (2016) 8 SCC 335, as also of the Gujarat High Court in C v. Bar Council of Gujarat (1983) GLH 297, to argue that both the High Court and the Supreme Court in the said cases were of the opi....
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....n the present case the offence is 7 years prior to Mr. Bansal being enrolled as a CA. He further submits that in P. Mohansundaram (supra), the CA in question did not even respond to the notice of the ICAI, and therefore, an order was passed under Section 21 of the Act. He submits that the distinction in facts needs to be noticed in the said case. 35. He relies upon the following cases to canvass the submission that if the facts are different, the precedent cannot be squarely applied by this Court: (i) Ranchoddas Atmarain v. Union of India and Ors., (1961) 3 SCR 718; (ii) Ashwani Kumar Singh v. Union Public Services Commission and Ors., (2003)11 SCC 584; (iii) Union of India v. Chajju Ram (Dead) by LRs, 2003(5) SCC 568. 36. Mr. Bansal further responds to the judgments placed on record by the ICAI by submitting that in all these cases the persons concerned were involved in misconduct committed in a professional capacity. Even the Law Commission's 266th report deals with only such situations involving offences in professional capacity. In his case, he submits that he had cleared the CA foundation exam prior to the date of offence, i.e., 7th September, 2001. He was finally enro....
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....ify the said exam. Unless and until a person obtains a certificate of practice, he or she cannot practice the profession of Chartered Accountancy in India. 41. Section 8 of the Act stipulates the disabilities- which are in the form of pre-conditions for a person to be able to qualify as a CA under the Act. Such conditions are worded as 'Disabilities' - i.e., in a negative manner in contrast with Eligibility Conditions usually prescribed, that are positive requirements. The section reads as under: "8. Disabilities Notwithstanding anything contained in Section 4, a person shall not be entitled to have his name entered in or borne on the Register if he - (i) has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or (ii) is of unsound mind and stands so adjudged by a competent Court; or (iii) is an undischarged insolvent; or (iv) being a discharged insolvent, has not obtained from the Court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or (v) has been convicted by a competent Court whether within or without India, of an offence involving moral turpitud....
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....ability upon the application of the said person. The question is whether both these exceptions would apply to both classes of offences as set out above or not. The answer to this question would be in the negative. The said provision would have to be read in a manner where the first exception applies only to the first class of offence and the second exception applies only to the second class of offences. If the offence is one involving 'moral turpitude', a pardon can be granted under criminal law. If the offence is technical in nature, the Central Government can remove the disability. Reading the aforementioned section in any other manner would not be rational as the Central Government cannot be vested with the power to remove a disability which has its genesis in conviction for an offence involving moral turpitude. Further, if the offence is one committed in a professional capacity which is not of a technical nature, no pardon would be required. Thus, the two classes of offences contemplated under Section 8(v) would have to be read as under: i) The first class of offences are those that involve 'moral turpitude' and are punishable with transportation or imprisonment, and no pardo....
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....ee, as per Section 21 of the Act. 51. If any of the disabilities as discussed above exist - either at inception or even after a person has qualified as a Chartered Accountant, and is a member of the ICAI, such person would not be entitled to have their name entered upon and would be liable to have their name removed from the register of the ICAI. 52. The next relevant provision is Section 20 of the Act, which reads as under: "20. Removal from the Register (1) The Council may remove from the Register the name of any member of the Institute− (a) who is dead; or (b) from whom a request has been received to that effect; or (c) who has not paid any prescribed fee required to be paid by him; or (d) who is found to have been subject at the time when his name was entered in the Register, or who at any time thereafter has become subject, to any of the disabilities mentioned in Section 8, or who for any other reason has ceased to be entitled to have his name borne on the Register. (2) The Council shall remove from the Register the name of any member in respect of whom an order has been passed under this Act removing him from membership of the Institute. (3) If the nam....
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....ipline) shall place such withdrawal before the Board of Discipline or, as the case may be, the Disciplinary Committee, and the said Board or Committee may, if it is of the view that the circumstances so warrant, permit the withdrawal at any stage." Thus, under Section 21, the Disciplinary Directorate of the ICAI has to take cognizance of any complaint made against a member of the Council, in respect of 'professional or other misconduct'. It also prescribes the procedure to be followed in such cases. Under Section 21(3) of the Act, the Disciplinary Directorate shall, upon a complaint being received, place the same before a Board of Discipline under Section 21A or the Disciplinary Committee under Section 21B, to take further action. Such action could include a reprimand of the member, removal from the register permanently or for a particular period, or imposition of a fine. 55. Section 22 defines 'professional or other misconduct', and reads as under: "22 Professional or other misconduct defined. For the purposes of this Act, the expression "professional or other misconduct" shall be deemed to include any act or omission provided in any of the Schedules, but nothing in this sec....
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....he profession or the Institute as a result of his action whether or not related to his professional work. THE SECOND SCHEDULE [See Sections 21(3), 21B(3) and 22] ... PART III : Other misconduct in relation to members of the Institute generally A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term exceeding six months." 59. At this stage, it is trite to mention that this Court is discussing the Scheme of the Act in detail, because the Petitioner has, apart from raising a question of interpretation of Section 8, also raised a procedural issue as to the manner in which the enquiry has emanated and is being conducted against him, in the facts of the present case. 60. Accordingly, a perusal and conjoint reading of the above-mentioned provisions along with the Schedules to the Act and the scheme contained therein, leads this Court to the following conclusions: a. There are, broadly, two categories of misconduct contemplated under the Act - 'professional misconduct' and 'other misconduct'. These two types of misc....
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....l turpitude', in the opinion of this Court, in case of an offence or a conviction involving 'moral turpitude', such power being vested with the Central Government would be contrary to the spirit of the statute as also contrary to the settled judicial precedents, to the effect that `moral turpitude' would be a complete disqualification. The use of the expression "entered in" contained in Section 8, also shows that offences committed prior to the person qualifying as a CA are also within the purview of the disabilities mentioned under Section 8 of the Act. The only condition upon which a person convicted can be entered into or can continue on the register of ICAI, would be if the person has been granted a pardon. 61. In the context of the above discussed scheme, the issues raised by the Petitioner are to be considered by this Court, as applicable to the facts. However, before doing so, this Court deems it appropriate to consider the judicial precedents in respect of the issues raised. Legal position and judgments * Disqualification due to statutory bar arising out of conviction for offences involving moral turpitude: 62. In Rama Narang vs. Ramesh Narang (1995)2 SCC 513, the Sup....
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....rson must be above board and beyond suspicion." 63. The Supreme Court further held that though the conviction of the said person was stayed, the said stay was not meant for the purpose avoiding the disqualification under the then Section 267 of the Companies Act. 64. In BSES Rajdhani Power Limited vs. Union of India, ILR (2011) VI DELHI 429, the Division Bench of the Delhi High Court was dealing with a case of a person who was convicted under Sections 148, 302, 323 and 149 of the IPC and was sentenced to undergo life imprisonment. The charges under Section 302 IPC were not proven. He was, however, convicted under the other provisions. When he was released on bail, he joined the services of the Delhi Vidyut Board, but was re-arrested. Upon his re-arrest, he was terminated on the ground that he had been convicted for offences which involved moral turpitude. The Division Bench of this Court upheld the termination by observing as under: "35. In the case at hand, when the offence committed by the respondent is in the realm or sphere of moral turpitude and there is imposition of sentence of rigorous imprisonment for a period of six months on two counts (although with a stipulation th....
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....t Under Article 12 of the Constitution: Provided that the disqualification for enrolment as aforesaid shall cease to have effect after a period of two years has elapsed since his release or dismissal or, as the case may be, removal. (2) Nothing contained in Sub-section (1) shall apply to a person who having been found guilty is dealt with under the provisions of the Probation of Offenders Act, 1958 (20 of 1958). 40. Dealing with the above provision, the Division Bench of the Gujarat High Court in C. v. Bar Council (1982) 2 GLR 706 observed: 2. ... .... .... We, however, wish to avail of this opportunity to place on record our feeling of distress and dismay at the fact that a public servant who is found guilty of an offence of taking an illegal gratification in the discharge of his official duties by a competent Court can be enrolled as a member of the Bar even after a lapse of two years from the date of his release from imprisonment. It is for the authorities who are concerned with this question to reflect on the question as to whether such a provision is in keeping with the high stature which the profession (which we so often describe as the noble profession) enjoys and fr....
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.... out after the enrolment. Having regard to the object of the provision, the said bar certainly operates post enrolment also. However, till a suitable amendment is made, the bar is operative only for two years in terms of the statutory provision." 67. In conclusion, the Court observed as under: "51. In a recent judgment of this Court in Modern Dental College and Research Centre v. State of M.P. in Civil Appeal No. 4060 of 2009 dated 2nd May, 2016, while directing review of regulatory mechanism for the medical profession, this Court observed that there is need to review of the regulatory mechanism of the other professions as well. The relevant observations are: There is perhaps urgent need to review the regulatory mechanism for other service oriented professions also. We do hope this issue will receive attention of concerned authorities, including the Law Commission, in due course. 52. In view of above, we request the Law Commission of India to go into all relevant aspects relating to Regulation of legal profession in consultation with all concerned at an early date. We hope the Government of India will consider taking further appropriate steps in the light of report of the La....
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....f an offence involving moral turpitude, would disentitle a person from continuing to be employed with a banking company. The High Court had released the employee under probation, set aside the order of discharge and also had directed his reinstatement. 71. On appeal, the Supreme Court, in its judgment, held that the release under probation would not be binding on the employer. It held that if an offence involving moral turpitude committed by the employee, comes to the notice of the employer, the employer is under an obligation to discontinue the service of an employee under the said provision of the Banking Regulation Act. The Supreme Court held: "4. Section 10(1)(b)(i) of the Banking Regulation Act, 1949 provides that conviction by a criminal court of an offence involving moral turpitude shall disentitle a person from continuing in employment of a banking company. The Writ Appeal filed by the Respondent was allowed by a Division Bench of the High Court on the ground that the criminal court released the Respondent under probation in exercise of its power Under Section 360 Code of Criminal Procedure to enable the Respondent to continue in service. The High Court was of the opinio....
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....rding to Bouvier's Law Dictionary, 'Moral Turpitude' is: An act of baseness, vileness or depravity in the private and social duties which a man owes to his fellow men or to society in general, contrary to the accepted and customary Rule of right and duty between man and man. Burton Legal Thesaurus defines 'Moral Turpitude' as: Bad faith, bad repute, corruption, defilement, delinquency, discredit, dishonor, shame, guilt, knavery, misdoing, perversion, shame, ice, wrong. 8. There is no doubt that there is an obligation on the Management of the Bank to discontinue the services of an employee who has been convicted by a criminal court for an offence involving moral turpitude. Though every offence is a crime against the society, discontinuance from service according to the Banking Regulation Act can be only for committing an offence involving moral turpitude. Acts which disclose depravity and wickedness of character can be categorized as offences involving moral turpitude. Whether an offence involves moral turpitude or not depends upon the facts and the circumstances of the case. Ordinarily, the tests that can be applied for judging an offence involving moral....
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....ing whether he had been arrested/prosecuted for an offence or whether any FIR was registered against him. Answering these in the negative, the Respondent subsequently informed the Petitioner that there was a private complaint filed against him under Section 323, 504, 506 of IPC but he had been acquitted. The Respondent was subsequently served with a show cause notice and after receiving a detailed reply, the Petitioner cancelled the candidature of the Respondent without affording any reasons. This order was set aside by Ld. Central Administrative Tribunal against which the Petitioner filed a Writ Petition before this Court. While upholding the decision of CAT, the Division Bench of this Court held that a person should be denied public employment only in cases of grave offences as denial of public employment for commission of trivial offences would be a violation of a citizen's constitutional right to be treated fairly. The Court took notice of the "All India Seminar on Correctional Service" held at New Delhi in March 1969 wherein the State of Haryana categorized certain offences to be grave and involving moral turpitude, and the common thread which bound them was that the most of t....
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....ed to the offences of murder or theft. In the latter situation, the Court confirmed that there may be a justification for exclusion of a person from public offices, and hence the gravity ought to be considered. 78. Recently, in Commissioner of Police vs. Raj Kumar (Civil Appeal No. 4960/2021, decided on 25th August 2021, the eligibility conditions for appointment to the post of Constable in Delhi Police was under consideration by the Supreme Court. The Supreme Court was dealing with Standing Order No. 398/2010, issued by the Delhi Police in respect of such candidates who are either facing trial or have been acquitted. The said Standing Order had the following condition: "STANDING ORDER NO. 398/2010 POLICY FOR DECIDING CASES OF CANDIDATES PROVISIONALLY SELECTED IN DELHI POLICE INVOLVED IN CRIMINAL CASES (FACING TRIAL OR ACQUITTED). xxx 6). Such candidates against whom charge-sheet in any criminal case has been filed in the court and the charges fall in the category of serious offences or moral turpitude, though later acquitted or acquitted by extending benefit of doubt or the witnesses have turned hostile due to fear of reprisal by the accused person, he/she will generally no....
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....enter the judicial verdict and should be avoided. Certain types of offences, like molestation of women, or trespass and beating up, assault, causing hurt or grievous hurt, (with or without use of weapons), of victims, in rural settings, can also be indicative of caste or hierarchy-based behaviour. Each case is to be scrutinized by the concerned public employer, through its designated officials- more so, in the case of recruitment for the police force, who are under a duty to maintain order, and tackle lawlessness, since their ability to inspire public confidence is a bulwark to society's security." 81. The above judgments relate to the provisions for appointments/ disqualifications for conviction of an offence relating to 'moral turpitude' in the context of Advocates, Police Forces, Director/Managing Director, Bank Listed employees etc., The conclusion on the basis of the above judgments would be that if a person is convicted of an offence involving moral turpitude, the discretion of the employer is narrow. The employer may only examine the nature of the offence for which the person is convicted and the treatment to be accorded. * Disqualification of Chartered Accountants: 82. ....
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....required to hold an inquiry. The conduct alleged must be such as, if proved, would render the member unfit to be a member of the Institute. The other class of cases has reference to the complaint received by the Council from the Central Government. In regard to this class of cases, the Council is not required, and indeed has no jurisdiction to apply the prima facie test-before holding an inquiry. The Council is required to cause an inquiry to be held on such complaint straightaway. In both the cases when the inquiry is concluded, the findings of the Council are to be forwarded to the High Court. Section 22 purports to define the expression "conduct which, if proved, will render a person unfit to be a member of the Institute". It is an inclusive definition; it includes any act or omission specified in the schedule but the latter portion of s. 22 clearly lays down that nothing contained in this section shall be construed to limit or abridge in any way the power conferred on the Council under sub-s. (1) of s. 21. The position thus appears to be that though the definition of the Material expression used in s. 21, sub-s. (1), refers to the acts and omissions specified in the schedule, t....
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....nding made by the Council and not otherwise. This conclusion is strengthened if we bear in mind the extended meaning of the expression "to be in practice" given in s. 2, sub-s. (2), which we have already dealt with. In this view of the matter we must reverse the conclusion of the learned Judges of the Calcutta High Court that the conduct proved against the respondent does not fall within as. 21 and 22 because it is not conduct connected with the exercise of his profession as a chartered accountant in the narrow sense of that term." 84. Thus, the Supreme Court concluded that misconduct cannot be narrowly construed, and any conduct which in the opinion of the Council renders a person unfit to be a member of the ICAI, even though such conduct may not be set out in the schedule, would justify action by the Disciplinary Committee. 85. In Council of the Institute of Chartered Accountants of India vs P.C. Parekh (Chartered Accountant Reference No. 1 of 1991, decided on 14th February 2003), the Division Bench of the Gujarat High Court was dealing with a case where the CA in question had authored a book titled "Tax planning for Secret Income (Black Money)." The charge of misconduct levell....
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....onal accountants is established on the basis of that the objectives and fundamental principles are equally valid for all professional accountants, whether they be in public practice, industry, commerce, public sector or education. 9.2 A hallmark of any noble profession is adherence by its members to a common code of values and conduct established by its administrative body, including maintaining an outlook which is essentially objective and acceptance of a duty to the society as a whole. Acceptance of its responsibility to public is a distinguishing mark of a procession. A large section of public relies on the objectivity and integrity of professional accountants to maintain the orderly functioning of commerce. Such reliance imposes a public interest responsibility on the accounting profession. Professional accountants have an important role to play in the society. Investors, creditors, employees and other sectors of the business community as well as the government and the public at large rely on professional accountants for sound financial accounting and reporting, effective financial management and competent advice on a variety of business and taxation matters. The attitude and....
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....xt of the behaviour of the members of this noble profession in the disciplinary matters which come up before it. It has wide powers extending to removal from membership of the institute either permanently or for a specified period. It may direct the proceedings to be filed or dismiss the complaint. This enables the court to examine the nature of misconduct alleged and the facts and circumstances brought on record in connection therewith against the delinquent. There is a serious responsibility on the Court - a duty to itself, to the profession, and to the whole of the community to be careful not to accredit any person as worthy of the public confidence who cannot establish his right to that credential. However, when an important statutory body like the Council finds a member of the institute guilty of the misconduct and forwards the case to the High Court with its recommendation under Section 21(5) of the Act, its findings based on the material on record would ordinarily not be disturbed unless found to be unjust, unwarranted or contrary to law." xxx 21.3 The statutory power to take action in respect of misconduct is not meant to curtail freedom of speech and expression, but to....
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.... it comes to be done through writing or speech. The answer to him would be if your speech and expression are foul, go ahead at your risk, but cease to be a member of this profession first. Everything we do has a consequence, that is a plain and simple matter of physics. The doer of a deed has a responsibility for the consequences of his thought, words and deeds. There is, thus, no substance in the contention raised on behalf of the respondent on the ground that his fundamental right to speech and expression would be violated by imposing punishment of removal of his name from the Register of members of the Institute which has a bearing on the freedom of profession rather than freedom of speech and expression. xxx" 88. In conclusion, the High Court considering the age and the health condition of the Respondent directed that he would be removed from the membership of the institute for 5 years and not perpetually. The Court held: "23. Having regard to the old age of the respondent, ailments that he is suffering from, repentance that he has shown in the Court and the time-lag that has elapsed, as also his statement that he has never published any such writing after the publication ....
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....edules, he shall place the matter before the Disciplinary Committee." Schedule-I Part-IV reads as follows:- "Other Misconduct in Relation to Members of the Institute Generally A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he- (1) is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months; (2) 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." 6) The Disciplinary Committee has, on facts, found the Chartered Accountant guilty of a practice which was not in the Chartered Accountant's professional capacity. This, it was entitled to do under Schedule I Part-IV sub clause (2) if, in the opinion of the Council, such act brings disrepute to the profession whether or not related to his professional work. 7) This being the case, it is clear that the impugned judgment is incorrect and must, therefore, be set aside. We thus remand the matter to the High Court to be decided afresh leaving all contentions open to both parties." 91. In Lalit ....
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....lant was hit by the disabilities under Section 8 of the Act. The Appellant was already enrolled as a CA, prior to the offence of bigamy being alleged against him. His conviction for the offence was upheld, although reduced, by the Supreme Court in its order dated 14th November 2003. Upon becoming aware of the said conviction, the ICAI issued a notice to the Appellant to show cause, and for an opportunity of hearing before the Council. The Appellant filed his reply to the said notice, however did not appear for the hearing. The Council thereafter, on 13th January 2009 resolved to remove his name from the register of Members, under Section 20(1)(d) of the Act. 94. The Madras High Court, after analysing the provisions of Section 8(v) read with Section 20(1)(d) of the Act stipulated that for the disqualification of persons involved in an offence of moral turpitude, either to become a member, or to continue as a Member of the ICAI. The Court also analysed the meaning of 'moral turpitude and held as under: "24. In Pawan Kumar v. State of Haryana (1996) 4 SCC 17) this Court has observed as under: (SCC p. 21, para 12) 12. 'Moral turpitude' is an expression which is used in leg....
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....ed Accountants Council in its 284th meeting held on 13.2.2010, which was published in the official gazette dated 19.2.2010 communicated to the appellant on 16.4.2010, which was upheld by the learned single Judge is valid and no interference is required as the appellant has attracted disqualification by operation of law viz., Section 8 of the Chartered Accountants Act, 1949, due to his involvement in an offence involving moral turpitude.." 96. In Ramakrishna Rao v. State (supra), a ld. Single Judge of the Andhra Pradesh High Court was dealing with the case of a Petitioner- a CA who was seeking suspension of conviction passed against him by an Additional Special Judge in Vishakhapatnam. The main contention of the Petitioner was that if his conviction is not suspended, he would be debarred from the rolls of he ICAI under section 8, and would lose valuable years in the profession. The key aspect in this case is that the Petitioner herein had primarily contended that he had appealed against his conviction and had a strong case in his favour, and hence if his plea of suspension was not granted by the Court, he would have been disqualified from the ICAI, irrespective of the outcome of hi....
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....n his request. 9. In the result, Crl. A.M.P. No. 751 of 2014 is allowed and conviction passed against the petitioner/A2 Ch. Ramakrishna Rao by the trial Court in C.C. No. 4/2009 is suspended pending disposal of the appeal." International Position 97. The jurisprudence, in respect of the applicability of principles of moral turpitude in respect of persons practising as Chartered Accountants is similar, internationally. 98. In some jurisdictions like the UK, in general, the law appears to be that once a person is convicted of an offence and has served conviction, the said person ought not be barred permanently from holding office or practising his profession or occupation. The law also provides that such persons also ought not to be made to answer questions about the previous conviction or the offence. This is with an intention to provide an opportunity to persons who may have committed crimes and have already been convicted for the same, to rehabilitate themselves and lead normal lives as individuals. The UK, Rehabilitation of Offenders Act, 1974 was enacted with this purpose and as per Section 4 of the said Act, a person who has served conviction for an offence has been given ....
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....s become spent or any circumstances ancillary thereto, or any failure to disclose a spent conviction or any such circumstances, shall not be a proper ground for dismissing or excluding a person from any office, profession, occupation or employment, or for prejudicing him in any way in any occupation or employment." 99. However, even under this Act, exceptions have been carved out which clarify that the protections given to rehabilitated persons under Section 4(2) would not however apply to certain professions, which are considered as noble professions or those which require higher levels of integrity such as Barristers, Chartered Accountants, Medical Practitioners, Veterinary Doctors, Chemists, among others. The said exceptions are contained in The Rehabilitation of Offenders Act, 1974 (Exceptions) Order 1975, which reads: "3. None of the provisions of section 4(2) of the Act shall apply in relation to- (a) any question asked by or on behalf of any person, in the course of the duties of his office or employment, in order to assess the suitability- (i) of the person to whom the question relates for admission to any of the professions specified in Part I of Schedule 1 to this ....
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.... matter invoking Articles 9 & 14 which are extracted herein below: "ARTICLE 9 Freedom of thought, conscience and religion 1. Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance. 2. Freedom to manifest one's religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others. ...... ARTICLE 14 Prohibition of discrimination The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." 103. The ECtHR held: "47. The Court considers that, as a matter of principle, States have a legitimate interest ....
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....tion is to be exercised in a non-arbitrary and reasonable manner. 105. The facts of the present case need to be considered in this backdrop. The incident leading to the conviction of the Petitioner emanates from the FIR dated 7th September 2001, registered for offences punishable under Sections 365/376/342/354/34 of the IPC. On the date when the incident leading to the conviction is stated to have occurred i.e., on 7th September 2001, the Petitioner was pursuing his graduate studies i.e., B. Com. (Hons.) and had already cleared the CA Foundation examination, as a step towards qualifying as a Chartered Accountant. He was, thus, aware that he was to pursue his career as a Chartered Accountant, which is governed by the provisions of the Chartered Accountants Act 1949, and the Rules framed thereunder. Charges were framed against him under Section 366 IPC, Section 376(2)(g) IPC and Section 506-II IPC, and during pendency of the trial, he cleared his remaining exams for qualifying as a CA. Upon passing his final exam, he was enrolled as a CA by the ICAI on 25th January 2008, and started rendering services as a CA. At the time when his name was entered as a member of the ICAI, admittedly....
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....der: "I am directed to refer to your letter dated 04.10.2018 seeking status of Office Memorandum No. 17/1/2019- Judl. Cell-II dated 29.6.2018 from Ministry of Home Affairs on the subject of removing disability under Section 8(v) of the Chartered Accountants Act, 1949. 2. In this regard, it is stated that the matter has been examined by the Ministry. It has been prima facie found that that the disability under Section 8(v) of the Chartered Accountants Act 1949, has not arisen yet against the applicant Shri Mohit Bansal, because Section 8(v) of the Chartered Accountants Act 1949, deals with professional misconduct whereas the incident took place prior to his acquiring to the professional qualification. Therefore the application is premature and infructuous." 107. On the strength of this letter, the Petitioner has urged that the offence of 'moral turpitude' under Section 8 (v) of the Act, would be qualified by the words "committed by him in his professional capacity". This Court does not agree with this interpretation, which is a purported 'prima facie' view. The said letter, in any case, is not binding on this Court. A reading of Section 8 (v) of the Act makes it clear that in c....
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....tinues to do so till date. He has also undergone the sentence and the punishment which was awarded to him in Crl. A. 828/2009. Thus, the Petitioner raises the question- "Can I be punished twice?" 112. This question appears attractive at first blush, inasmuch as in the case of criminal offences, the punishment can only be imposed once. However, the discussion would not end here. There are certain professions and services which are considered to be those that require a very high standard of integrity, some of which are also considered as noble professions. Such professions, as has been held by the Supreme Court in various decisions discussed above, include Doctors, Lawyers and Chartered Accountants. A higher standard is also expected in case of appointments to public offices. Even in the case of Managing Directors or Directors in companies' similar disqualifications exist. 113. A perusal of the case law on this would show that, for instance, in the case of Advocates admitted for practice, the disability under the existing provision under Section 24A of the Advocates Act, 1961, is applicable only for a period of two years. However, the Supreme Court in the case of Mahipal Singh Rana....
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.... professional or other misconduct under Section 8(vi) of the Act, read with the Schedules to the Act, that the occasion to conduct an inquiry under Section 21 of the Act, before the Disciplinary Directorate, arises. When concerned with offences involving 'moral turpitude', the said section does not apply. That is not to say that principles of natural justice need not be followed. A notice ought to be issued and a fair hearing afforded to the person concerned. 117. Accordingly, under such circumstances, the question as to whether the Petitioner can be held to be suffering from the disability under Section 8(v). The answer is a clear yes, although the consequences of the same could be far reaching, not only on the Petitioner but also his family. 118. The Petitioner, in this case, having been convicted for offences under Section 354 and 506-II of IPC, is clearly attracted by the disability under Section 8(v) of the Act. He has already practiced for almost 12 years by the time the notice was issued by ICAI. Ideally, ICAI ought to have had adequate checks at the time of registration itself. However, the fact that the conviction of the Petitioner may have not come to the attention of t....
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....s passing of Both Groups of Final C.A. Examination held in May 2003 and thereafter.) (d) Should not possess any of the following disabilities: (i) Not attained the age of 21 years. (ii) Unsound mind and stands so adjudged by a Competent Court. (iii) Undischarged insolvent. (iv) Being discharged insolvent, has not obtained from the Court a certificate that his insolvency was caused by misfortune without any misconduct on his part. (v) Convicted by a Competent Court, of an offence involving moral turpitude committed by him in his professional capacity unless pardoned or the Central Government has removed the disability." 123. The said manual has been relied upon by the Petitioner to support the plea that unless and until the offence is committed in a professional capacity the said disability would not be applicable to him. However, in the light of the legal position discussed above, there is a clear need to modify the Manual and for the ICAI to bring in a framework which includes disclosure requirements for every candidate who seeks to become a Chartered Accountant, right at the inception itself. There should also be a requirement of disclosure on a periodic basis, annu....
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....ng entered or borne in/continued in the register of the ICAI. This is a graver offence, in terms of the scheme of the Act, juxtaposed to what is contemplated under the third part of the Second Schedule or the fourth part of the First Schedule to the Act. c. In the case of an offence involving 'moral turpitude', for which no pardon has been granted, by a strict interpretation of the Act, the matter need not even be referred to the Board of Discipline or to the Disciplinary Committee for an inquiry. In such cases dealing with conviction for offences involving 'moral turpitude' covered under Section 8(v) the same would straight away fall within the jurisdiction of the ICAI Council, and even an inquiry, as contemplated in Section 21, would not be strictly required. The ICAI Council, may however, for the purposes of complying with the Principles of Natural Justice, and for the purposes of fairness, still decide to provide a hearing to the person concerned. d. A reading of Sections 20, 21 & 22 would show that the discretion vested in the Council and the Director (Discipline) are vast. Inquiry can be conducted in respect of professional or other misconduct as also under any other circ....