COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA versus SHRI GURVINDER SINGH & ANR.

Citation: [2018] 14 S.C.R. 321 · Decided: 16-11-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Leave Granted & Disposed off

Judgment (excerpt)

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COUNCIL OF THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA
v.
SHRI GURVINDER SINGH & ANR.
(Civil Appeal No. 11034 of 2018)
NOVEMBER 16, 2018
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Chartered Accountants Act, 1949 : s.22 read with s.21,
Schedule I Part IV – Other misconduct – Complaint against
Chartered Accountant relating to sale of  shares, transferred to the
Chartered Accountant’s own name – Disciplinary Committee found
his conduct derogatory in nature and held him guilty of ‘Other
Misconduct’ u/s. 22/21 – Recommendation made by the Council of
the Institute of Chartered Accountants to the High Court to remove
the Chartered Accountant for a period of six months from the rolls,
however, the High Court did not impose any penalty – Correctness
of – Held: High Court did not correctly appreciate s. 21(3) –
Disciplinary Committee found the Chartered Accountant guilty of a
practice which was not in the Chartered Accountant’s professional
capacity – Under Schedule I Part-IV sub clause(2), the Council
can hold Chartered Accountant guilty if their act brings disrepute
to the profession whether or not related to his professional work –
Thus, the order of the High Court is set aside and the matter
remanded to the High Court to be decided afresh.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11034
of 2018.
From the Judgment and Order dated 16.08.2016 of the High Court
of Delhi at New Delhi in Chat. A. Ref. No. 4.2012.
Rana Mukherjee, Sr. Adv., Pramod Dayal, Nikunj Dayal, Ms. Payal
Dayal, Advs. for the Appellant.
Balaji Srinivasan, Ms. Pallavi Sengupta, Ms. Garima Jain,
Siddhanth Kohli, Ms. Lakshmi Rao, Advs. for the Respondents.
[2018] 14 S.C.R. 321
321
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322                    SUPREME COURT REPORTS            [2018] 14 S.C.R.
The Judgment of the Court was delivered by
R. F. NARIMAN, J. 1. Leave granted.
2. The present appeal arises out of a complaint dated 16.03.2005
against Gurvinder Singh - Respondent No.1, who is a Chartered
Accountant, relating to sale of 100 shares in 1999, which were transferred
to the Chartered Accountant’s own name.
3. What has been pleaded before us is that the matter has
ultimately been settled between the Complainant and the Chartered
Accountant, despite which the Disciplinary Committee took up the case
and ultimately found that the conduct of the Respondent No.1-Chartered
Accountant was derogatory in nature and highly unbecoming and held
him guilty of ‘Other Misconduct’ under Section 22 read with Section 21
of the Chartered Accountants Act, 1949 (hereinafter referred to as ‘the
Act’).
4. The Council of the Institute of Chartered Accountants of India,
therefore, made its recommendation to the High Court to remove the
aforesaid Chartered Accountant for a period of six months from the
rolls.  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 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.”
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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 professi

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