TaxTMI 
TaxTMI 
2021 (1) TMI 1225
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....: "Please refer to your letter dated 27.01.2017 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....
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....arising out of your conviction under Section 354 and 506-II of the Indian Penal Code, 1860 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 dat....
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.... was convicted under Section 354 IPC and Section 506-II of the IPC. The sentence awarded to him was the period already undergone i.e., 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....
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....w cause notice dated 25th June 2018 was issued to the Petitioner, asking him to appear before the Council to explain as to why action under Section 8 of 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 t....
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....s sent in pursuance of the urgent email for clarification that was sent by Mr. Bansal, the Petitioner had sought a pardon from the Ministry. As per the Petitioner the Ministry 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. Bansa....
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....(i) ICAI v. Vimal Kumar Surana and ors., (2011) 1 SCC 534; (ii) ICAI v. L.K. Ratna and ors., (1986) 4 SCC 537; (iii) Subramani Gopalkrishnan v. ICAI, 181 (2011) DLT 280; (iv) Partha 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 Responden....
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....s convicted, even if they qualify the CA examination, their name would not be liable to be entered in the register. He, thus, submits that the wording of the said Section makes it clear that the offence need not be one committed in the professional 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....
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....ed to distinguish P. Mohanasundaram (supra) by arguing that the facts of the said case are completely distinct from the present case. He submits that in the said case, the CA in question was enrolled in 1975 and the offence was committed in 1984. However, in 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 ....
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....ered Accountants. As per Section 5 of the Act, there are two categories of members of the Institute - Associates and Fellows. The ICAI conducts examinations which have to be cleared for a person to be recognised as a CA. The ICAI also issues a certificate of practice to such persons who qualify 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 (i....
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....h "unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, remove the disability" provides for two exceptions. The first exception is if a person has been granted 'pardon' in respect of offences committed by him. The second exception is if the Central Government has removed the disability 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 o....
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....ub-section (v) of the Act. 50. Thus, there are three categories of disabilities that are contemplated under Sections 8 (v) and 8 (vi), when read together: (i) Conviction for an offence involving 'moral turpitude'; (ii) Conviction for an offence committed in professional capacity which is not technical in nature; (iii) Person held guilty of 'professional' or 'other misconduct' post an inquiry by the Disciplinary Committee, 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 h....
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....a member is guilty of any professional or other misconduct mentioned in the First Schedule, he shall place the matter before the Board of Discipline and where the Director (Discipline) is of the opinion that a member is guilty of any professional or other misconduct mentioned in the Second Schedule or in both the Schedules, he shall place the matter before the Disciplinary Committee. (4) In order to make investigations under the provisions of this Act, the Disciplinary Directorate shall follow such procedure as may be specified. (5) Where a complainant withdraws the complaint, the Director (Discipline) 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....
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.... with misconduct which involves convictions for an offence, civil or criminal, with imprisonment for a term exceeding six months. The said two relevant extracts of the Schedules read: "THE FIRST SCHEDULE [See Sections 21(3), 21A(3) and 22] .... PART IV 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. 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.....
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....e final authority empowered to accept the recommendation of the Board of Discipline, in the case of misconduct specified in the First Schedule, and of the Disciplinary Committee in cases of misconduct specified in the Second Schedule, or a combination of both the Schedules. f. It is further clear that if a person has been convicted for an offence involving 'moral turpitude', such a person's name cannot be entered into the register or cannot continue in the register, and has to be removed from the register, unless a pardon in respect thereof is granted. g. Although, from a bare reading of sub-section 8(v), it may appear that the Central Government would have the power to remove the disability even in offences involving 'moral 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 ....
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.... such a person as Managing Director of a company and insists that if he is already in position he should forthwith be removed from the position. The purpose of Section 267 is to protect the interest of the shareholders and to ensure that the management of the affairs of the company and is control is not in the hands of a person who has been found by a competent court to be guilty of an offence involving moral turpitude and has been sentenced to suffer imprisonment for the said crime. In the case of a Director, who is generally not incharge of the day to day management of the company affairs, the law is not as strict as in the case of a Managing Director who runs the affairs of the company and remains in overall charge of the business carried on by the company. Such a person 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 ....
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....amined closely to take steps to preserve the image of the legal profession. The Supreme Court held that despite the said observations of the Gujarat High Court, no action was taken at any level. The observations of the Supreme Court are as under: "39. Section 24A of the Advocates Act is as follows: 24A. Disqualification for enrolment. - (1) No person shall be admitted as an advocate on a State roll- (a) if he is convicted of an offence involving moral turpitude; (b) if he is convicted of an offence under the provisions of the Untouchability (Offences) Act, 1955 (22 of 1955); 2[(c) if he is dismissed or removed from employment or office under the State on any charge involving moral turpitude. Explanation - In this clause, the expression "State" shall have the meaning assigned to it 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 wi....
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....of this order may, therefore, be sent to the appropriate authorities concerned with the administration of the Bar Council of India and the State Bar Council, Ministry of Law of the Government of India and Law Commission in order that the matter maybe examined fully and closely with the end in view to preserve the image of the profession and protect the seekers for justice from dangers inherent in admitting such persons on the rolls of the Bar Council. 41. Inspite of the above observations no action appears to have been taken at any level. The result is that a person convicted of even a most heinous offence is eligible to be enrolled as an advocate after expiry of two years from expiry of his sentence. This aspect needs urgent attention of all concerned. 42. Apart from the above, we do not find any reason to hold that the bar applicable at the entry level is wiped 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: ....
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.... the above recommendation, an amendment was suggested by the Law Commission for removal of the proviso as also Section 24(A)(2) of the Advocates Act, completely. Therefore, the twoyear period was recommended to be removed, which in effect would result in a permanent debarment of any advocate who may have been convicted for an offence of moral turpitude. As per these recommendations, even the protection under the provisions of the Probation of Offenders Act is to be deleted. The said recommendations of the Law Commission is yet to be implemented. 70. In State Bank of India and Ors. vs. P. Soupramaniane, (2019) 18 SCC 135, the employee in question was working with the Bank as a messenger. He was convicted under Section 324 IPC and was sentenced to imprisonment of three months. The Supreme Court was considering Section 10(1)(b)(i) of the Banking Regulation Act, 1949 which provided that conviction by criminal Court of 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, ....
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....ght to continue in service. In fact the employer is under an obligation to discontinue the services of an employee convicted of an offence involving moral turpitude. The observations made by a criminal court are not binding on the employer who has the liberty of dealing with his employees suitably." 72. Upon further examining as to what constitutes 'moral turpitude', the Court held as under: "7. Moral Turpitude' as defined in the Black's Law Dictionary (6th ed.) is as follows: The Act of baseness, vileness, or the depravity in the private and social duties which man owes to his follow man, or to society in general, contrary to accepted and customary Rule of right and duty between man and man. "implies something immoral in itself regardless of it being punishable by law"; "restricted to the gravest offences, consisting of felonies, infamous crimes, and those that are malum in se and disclose a depraved mind." According 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, cont....
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....alien of a crime involving moral turpitude is a ground for deportation under the Immigration Law in the United States of America. To qualify as a crime involving moral turpitude for such purpose, it requires both reprehensible conduct and scienter, whether with specific intent, deliberateness, willfulness or recklessness." 73. Since in the said case, the conviction was for assault, the Supreme Court observed that every assault may not be an offence involving moral turpitude. Since the injuries which were caused to the victim were simple, and in the overall facts which involved a dispute between the two groups belonging to separate political parties, the Supreme Court held that the Respondent was not guilty of moral turpitude. 74. In the case of Govt. of NCT of Delhi & Anr. vs. Robin Singh (2010) 171 DLT 705 (DB) the respondent had been provisionally selected for the post of Sub-inspector (Executive) which was to be followed by verification of his character and antecedents. He was subsequently required to fill a form stating whether he had been arrested/prosecuted for an offence or whether any FIR was registered against him. Answering these in the negative, the Respondent subs....
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....ces involving moral turpitude in its true essence. Every trivial offence should not attract denial of a chance to attain public employment even if it is of a nature of Sub-Inspector. Further, the Court also recommended formulation of a policy where convictions for petty offences should not be treated as such which would bar entry into public employment. 76. In Ram Het Meena v Union of India 2011 SCC Online Del 1323 the Petitioner was found to be an unsuitable candidate for service in CISF by the Respondents as he had been convicted under Section 326, IPC and was subsequently let off on probation. This Court based on the finding in Robin Singh (supra) directed the Respondent to reconsider its decision. 77. Post the decision in Robin Singh (supra), the principle that the gravity of offence ought to be looked at, was considered in the judgment in Manoj v. Union of India, (2016) 232 DLT 311, by a ld. Division Bench of this Court. The Court in Manoj (supra) distinguished between ordinary offences such as over speeding or parking tickets, etc, as compared to the offences of murder or theft. In the latter situation, the Court confirmed that there may be a justification for exclusion....
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....nces against Property (Section 379462, Indian Penal Code) 10. Offences relating to Documents and Property Marks (Section 465-489, Indian Penal Code) 11. Offences relating to Marriage and Dowry Prohibition Act (Section 498-A, Indian Penal Code)"" 80. The High Court had, on the basis of the material on record, including the allegations in the charge sheet and the compromise of the dispute, quashed the rejection of the candidature of the Respondents. However, the Supreme Court held that the Court cannot second guess the suitability of a candidate for a public office or post, and generalised observations have to be avoided in such situations. The conclusion of the Supreme Court is as under: "30. The High Court's approach, evident from its observations about the youth and age of the candidates, appears to hint at the general acceptability of behaviour which involves petty crime or misdemeanour. The impugned order indicates a broad view, that such misdemeanour should not be taken seriously, given the age of the youth and the rural setting. This court is of opinion that such generalizations, leading to condonation of the offender's conduct, should not enter t....
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....e order under s. 21, sub-s. (3) of the Act. However, since the learned Attorney-General has alternatively urged before us that in confining the exercise of disciplinary jurisdiction only to cases of professional misconduct, technically so-called, the learned Judges of the Calcutta High Court have misconstrued the relevant provisions of the Act, we propose to deal very briefly with that question also. 9. Section 21, sub-s. (1), deals with two categories of cases in which the alleged misconduct of members of the Institute can be inquired into. If information is received or complaint is made to the Institute against the conduct of any chartered accountant the Council is not bound to hold an inquiry straightaway. The Council is required. to examine the nature of the information or complaint made and decide whether, if the facts alleged against the member are proved, they would render the member unfit to be a member of the Institute. In other words, in the case of a private complaint made against members, it is only where the Council is satisfied prima facie that facts alleged against the member, if proved, would justify the exercise of disciplinary jurisdiction against the mem....
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....jurisdiction conferred upon the Council to hold inquiries by s. 21, sub-s. (1), it would not be right to hold that such disciplinary jurisdiction can be invoked only in respect of conduct falling specifically and expressly within the inclusive definition given by s. 22. In this connection it would be relevant to mention s. 8 which deals with disabilities. Section 8, sub-ss. (v) and (vi), support the argument that disciplinary jurisdiction can be exercised against chartered accountants even in respect of conduct which may not fall expressly within the inclusive definition contained in s. 22. We, therefore, take the view that, if a member of the Institute is found, prima facie, guilty of conduct which, in the opinion of the Council, renders him unfit to be a member of the Institute, even though such conduct may not attract any of the provisions of the schedule, it would still be open to the Council to hold an inquiry against the member in respect of such conduct and a finding against him in such an inquiry would justify appropriate action. being taken by the High Court under s. 21, sub-s. (3). It is true that the High Court would take action against the offending member only if the H....
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....of strict rules of conduct as a condition of membership and by setting up a high standard of professional and general education and knowledge and otherwise". (See Royal Chartered of the 11th may 1880 incorporating the Institute of Chartered Accountants in England and Wales having regard to its laudable intention). 9.1 The International Federation of Accountants, of which Institute of Chartered Accountants of India and Institute of Cost & Works Accountants of India are members, "recognizing the responsibilities of the accountancy profession as such, and considering its own role to be that of providing guidance, encouraging continuity of efforts, and promoting harmonization, has deemed it essential to establish an international Code of Ethics for Professional Accountants to be the basis on which the ethical requirements (code of ethics, detailed rules, standards of conduct etc.), for professional accountants in each country should be founded." The International Code is intended to serve as a model on which to base the national ethical guidance. It sets standards of conduct for professional accountants and states the fundamental principles that should be observed by them. The....
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....sional integrity implies not mere honesty but fair dealing and truthfulness. The principle of objectivity imposes an obligation on all professional accountant to be fair, intellectually honest and free of conflicts of interest. Professional accountants should therefore protect the integrity of their professional services and maintain objectivity in their judgement. A professional accountant should act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession. xxxx" 86. The High Court also analysed the Code of Conduct prescribed for Chartered Accountants and on the interpretation of Section 8(vi), it held as under: "13.1 Under section 8 of the said Act, a person shall not be entitled to have his name entered in or borne on the Register if he has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct. Thus, not only for the professional misconduct specified in the Schedule but also for any other misconduct not so specified, the member guilty of such other misconduct can be removed by the Institute after due in....
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....on against the members can be better looked at from the point of view of the fundamental right guaranteed by Article 19(1)(g) read with restrictions that can be imposed under Clause (6) of Article 19 as reasonable restrictions in the interests of general public. The statutory provisions which are directly linked with and are essential for the regulation of the profession of the Chartered Accountants would be protected by Clause (6) of Article 19 of the Constitution as being in the interest of general public. If such provisions are alleged to violate other freedoms under Article 19(1) such as, freedom of speech or expression, the freedoms have to be read harmoniously so that the statutory provisions including the rules and regulations which are reasonably required in furtherance of one freedom are not struck down as violating the other freedoms (See M.H. Devendrappa v/s Karnataka State Small Industries Corporation (1998) 3 SCC 732). 21.4....... To put it straight - a member of the profession of Chartered Accountants, behaving contrary to the Code of Conduct and therefore, found guilty of misconduct by the Council and facing removal from membership, that would affect his rig....
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.... brings disrepute of the profession, whether or not related to his professional work, shall be liable to be taken action upon. The High Court order was accordingly reversed and the matter was remanded back to the High Court. The Court held: "The High Court, by the impugned judgment dated 16.08.2016, after setting out Sections 21 and 22 of the Act, arrived at the conclusion that: "14. In the instant case the respondent was acting as an individual in his dealings with the complainant which were purely commercial. While selling the shares held by him the respondent was not acting as a Chartered Accountant. He was not discharging any function in relation to his practice as a Chartered Accountant. 15. The Reference is accordingly answered by declaring the law as above and not inflicting any penalty upon the respondent." 5) We are afraid that the High Court has not correctly appreciated Section 21(3) of the Chartered Accountants Act, 1949 which states as follows:- "(3) Where the Director (Discipline) is of the opinion that a member is guilty of any professional or other misconduct mentioned in the First Schedule, he shall place the matter befo....
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....nstitute misconduct. The reply of the Petitioner was then called for. The Petitioner alleged that the Board of the ICAI had no jurisdiction as the concerned offences were being tried by the relevant criminal Courts. 92. On this, a ld. Single Judge of this Court analysed the scheme of the Act and held that the Board of Discipline had the concerned jurisdiction in the said case. The observations of the Court are as under: "22. In view of the above, this Court is unable to accept the contention that the Board of Discipline does not have the jurisdiction to examine the alleged misconduct on the part of the petitioner. Clause (2) of Part-IV of the First Schedule to the Act is wide, and would include within its scope, any conduct that would tend to bring disrepute to the profession or the Institute. If a Chartered Accountant is found to have been guilty in outraging the modesty of a woman and/or other offences involving moral turpitude, it would not be inapposite for the Board of Discipline to also conclude that the conduct did, in fact, lower the dignity of the profession. In this view, this Court is not able to accept that the proceedings before the Board of Discipline are ....
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....dividual charged with a certain conduct owes a duty, either to another individual or to the society in general, to act in a specific manner or not to so act and he still acts contrary to it and does so knowingly, his conduct must be held to be due to vileness and depravity. It will be contrary to accepted customary rule and duty between man and man. 25. In view of the above, it is evident that moral turpitude means anything contrary to honesty, modesty or good morals. It means vileness and depravity. In fact, the conviction of a person in a crime involving moral turpitude impeaches his credibility as he has been found to have indulged in shameful, wicked and base activities." 95. The Court concluded that, since bigamy constitutes an offence involving 'moral turpitude' and the conviction stands even today, the disqualification under Section 8 of the Act is valid. The Court finally held: "18. From the above referred judgments and having regard to the fact that the appellant married another woman, while the first marriage was subsisting, and had acted contrary to the law and to his "estranged wife", we are of the view that the offence of bigamy is coming within th....
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....isciplinary proceedings is looming large at him. Therefore, I find force in the submission of learned counsel for petitioner that if by virtue of impugned judgment he were to be removed from the rolls of the Register pending appeal, it would cause irretrievable loss to him even if he succeeds in the appeal, since he would loose not only professional income but most importantly his goodwill and the clients. Hence, his case has to be considered sympathetically. 7. In this regard, a distinction has to be drawn between a public servant and a professional. In similar circumstances, there will be a threat of initiation of disciplinary proceedings and consequent loosing of job to a public servant also. However, he stands on a different footing than a professional. Though a public servant looses his job pending appeal, if he ultimately succeeds in the appeal he can claim all his consequential benefits. So, no loss will be occasioned to him. As such, in similar circumstances, a public servant cannot seek for suspension of conviction on the sole ground of loosing his job. This point was made clear in a catena of decisions and recent one being in the case of State of Maharashtra v. B....
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.... or prosecuted for or convicted of or sentenced for any offence which was the subject of a spent conviction; and (b) a person shall not, in any such proceedings, be asked, and, if asked, shall not be required to answer, any question relating to his past which cannot be answered without acknowledging or referring to a spent conviction or spent convictions or any circumstances ancillary thereto. (2) Subject to the provisions of any order made under subsection (4) below, where a question seeking information with respect to a person's previous convictions, offences, conduct or circumstances is put to him or to any other person otherwise than in proceedings before a judicial authority- (a) the question shall be treated as not relating to spent convictions or to any circumstances ancillary to spent convictions, and the answer thereto may be framed accordingly; and (b) the person questioned shall not be subjected to any liability or otherwise prejudiced in law by reason of any failure to acknowledge or disclose a spent conviction or any circumstances ancillary to a spent conviction in his answer to the question. (3) Subject to the provisions of....
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.... 10. Any profession to which the Professions Supplementary to Medicine Act 1960 applies and which is undertaken following registration under that Act." 100. Accordingly, Section 4 which provides for rehabilitation under the Rehabilitation of Offenders Act, 1974 of the UK are not applicable to members who are admitted/seek to be admitted in these professions. 101. In the case titled Thlimmenos v. Greece (Appl. No. 34369/97, decided on 6th April 2000), the Grand Chamber of the European Court of Human Rights (`ECtHR') also had an occasion to consider the question as to whether a convicted person can practice as a Chartered Accountant. It was a case involving a Greek national, who had been convicted on a charge of insubordination while serving in the army because, being a Jehovas' Witness, he refused to wear the military uniform at the time of general mobilization. The Athens Tribunal found him guilty in 1983 under the applicable Military Criminal Code and the other applicable codes, and sentenced him to four years imprisonment. He was released on parole after two years. Five years later, he took the public examination for appointment as a Chartered Accountant, which was ....
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....d. However, it also notes that the applicant did serve a prison sentence for his refusal to wear the military uniform. In these circumstances, the Court considers that imposing a further sanction on the applicant was disproportionate. It follows that the applicant's exclusion from the profession of chartered accountants did not pursue a legitimate aim. As a result, the Court finds that there existed no objective and reasonable justification for not treating the applicant differently from other persons convicted of a serious crime." A perusal of the above shows that the ECtHR concluded that the officer had refused to wear the military uniform due to religious beliefs. Thus, the Officer, in this case, was permitted to practice as a Chartered Accountant and the decision of the Board was quashed. The ECtHR also awarded compensation and costs in his favour. However, the above observations of the ECtHR also make it clear that if a person is convicted for a serious criminal offence, dishonesty or moral turpitude, debarment of such person from practicing as a chartered accountant could be justified. Applicability to the facts of the case 104. The sum total of the scheme of the....
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....iction. Vide order dated 5th February 2010, his sentence was suspended. By then he had already undergone seven months of imprisonment. Vide the final judgment in the Criminal Appeal bearing Crl. A. 828/2009, dated 7th October 2013 the Petitioner was acquitted of offence under Sections 376(2)(g) of IPC, however, he was convicted under Sections 354 and 506-II of IPC. His sentence was accordingly modified, and reduced to the period of seven months, i.e., the period already undergone, along with fine of Rs. 25,000/. He then filed an application before the High Court under the Probation of Offenders Act, 1958 seeking pardon and benefit of probation on the ground that the sentence already undergone would create a stigma on his practice of his profession, however the same was dismissed by a ld. Single judge, vide judgment dated 12th November 2014, holding that as the period of conviction had already been undergone, the Court had become functus officio. 106. Clearly the offences for which he has been convicted, initially under Section 376(2)(g) IPC vide order dated 23rd September 2009, thereafter, reduced to Section 354 IPC vide order dated 7th October 2013, are serious offences and wou....
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....ower in the Central Government to remove the disability. This power would however not be exercisable in case of offences involving 'moral turpitude'. 108. The Petitioner has also vehemently urged that the offence qua which he has been convicted was in his college days, and was much prior to him having been enrolled as a CA. He has argued that the Act cannot be expected to ban him from being a CA, for such offences which were committed much earlier before him qualifying as a CA. 109. In the opinion of this Court, Section 8 is very clear, as the expression that is used to attract the disability in Section 8 is "entered in" or "borne on the register". The disability is contemplated at the entry level itself, which also means that the offence involving 'moral turpitude' may not, in such a situation, be one in professional capacity. Given that the disability is at the stage of entry to the register, the clear purport of the language is that it is inclusive of all convictions for offences/acts involving 'moral turpitude', irrespective of when the same was committed. Thus, the interpretation being canvassed by the Petitioner is liable to be rejected. 110. The further issue that a....
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....llegations are sufficient to constitute disqualification, as has been recognized by the Supreme Court in Commissioner of Police vs. Raj Kumar (supra). The Supreme Court in Council of the Institute of Chartered Accountants of India vs P.C. Parekh (supra) has clearly recognised the extension of the same logic to the case of Chartered Accountants, and more so because of it having been held to be a noble profession. 115. Even in P. Mohanasundaram (supra), the Madras HC has held that a Petitioner who had committed an offence of bigamy, which of course is not an offence in professional capacity, upon conviction could not have been entered on the register under Section 8(v) of the Act. 116. Mr. Mohit Bansal has cited various cases, including, ICAI v. Vimal Kumar Surana and ors. (supra), ICAI v. L.K. Ratna and ors. (supra) etc., in support of his contention that the due disciplinary process contemplated under Section 21 of the Act was not followed by the ICAI in his case. The Petitioner has also relied upon the judgment of the Andhra Pradesh High Court in Ramakrishna Rao (supra). However, in the opinion of this Court, the said judgment is not applicable to the present case, as the sa....
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....he response of the Petitioner was that the legal issue involving interpretation of Section 8 would have a bearing on the enquiry, and hence he insisted on pressing the present petition. 120. It is, accordingly, held that in the case of offences involving 'moral turpitude' under Section 8(v) and persons who may have been convicted of such offences and sentenced for imprisonment, the disability would be squarely attracted. 121. It is surprising to note, as per the submissions made, that the institute- ICAI in India does not have any checks at the entry level and disclosure requirements, specifically asking an applicant as to whether there is any criminal case/FIR instituted against the said applicant or whether he has been convicted in the past for any offence. The said disclosure ought to be sought at the initial stage itself, i.e., when the person signs up to take the first examination as a chartered accountant and at the stage of registration, so that the person is conscious of the disqualification which could apply qua him and bar such person from practicing as a CA. There also appears to be no continuing disclosure requirement from members. 122. Instead of having such a....
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....aint/Case. 125. It is also noteworthy that no statute or law such as the Rehabilitation of Offenders Act, 1974 exists in India. This Court, however, cannot but observe that the question as to whether the rehabilitation ought to be considered in case of persons who may have either juvenile or at a younger age committed some offences and have undergone convictions, is an important one. In Union of India v. Ramesh Bishnoi, (2019) 19 SCC 710, the Supreme Court observed, in the context of Juvenile Justice Act, 2015 Act, that the principle of fresh start ought to be applied. There is no doubt that such a principle would squarely be applicable for juveniles, however, for other persons, who have undergone conviction for offences committed by them and the question as to whether the rehabilitation ought not be permitted and if so in what manner, is yet to be considered. The question as to whether such persons and professionals can be barred forever for practicing either as Chartered Accountants, Lawyers etc., would be subject matter of the debate in the realm of policy. In the present case, however, no such question arises for consideration or interpretation, as the Petitioner was clearly....
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....a person has been convicted for an offence involving 'moral turpitude', such a person's name cannot be entered into the register or cannot continue in the register, and has to be removed from the register, unless a pardon in respect thereof is granted. g. Although, from a bare reading of sub-section 8(v), it may appear that the Central Government would have the power to remove the disability even in offences involving 'moral 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. B. On the facts of the present cas....