INSTITUTE OF CHARTERED FINANCIAL ANALYSTS OF INDIA AND ORS. versus COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA AND ORS

Citation: [2007] 6 S.C.R. 1127 · Decided: 16-05-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

.. 
INSTITUTE OF CHARTERED FINANCIAL 
ANALYSTS OF INDIA AND ORS. 
i: 
COUNCIL OF THE INSTITUTE OF 
CHARTERED ACCOUNTANTS OF INDIA AND ORS. 
MAY 16, 2007 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
A 
B 
Chartered Accountants Act, 1949-Sections 7, 22 and 24A-Chartered C 
Financial Analyst (C.F.A.) Course/Programme offered by a registered society-
Council of Institute of Chartered Accountants of India issuing notification 
prescribing that its members i.e. Chartered Accountants (C.A.), who had 
obtained qualification from that Society, if they did not surrender same by 
a prescribed date, they would be guilty of profe: 5ional misconduct under the 
Act-Correctness of-Held-Functions of C.F.A. were altogether different D 
from those of a C.A., and did not include those in exclusive domain of latter-
Similarly in designation on premise that three papers taught by Institute 
were also taught by Society was immaterial-Society did not commit offence 
under Section 24A(J) of awarding degree similar to that of Institute, and 
award of qualification by it could not be said to be nullity-Section 7 only 
debarred member of Institute from using a qualification; it did not prohibit E 
C.A. from acquiring a qualification-Acquisition of a qualification being an 
inherent and human right, it could not prohibited except by a statutory 
interdict-Use of same as permitted by Section 7 was not per se illegal, and 
no misconduct arose as a result thereof-Section 24A could not be read with 
Section 7, and being a penal provision, had to be construed strictly- F 
Otherwise too, notification was impermissible as professional misconduct 
having been defined under Section 22, a statutory authority could not 
transgress its authority to say by an administrative order that acquisition of 
a qualification by a member of Institute shall itself constitute a misconduct-
Notification issued by Council, being a law within meaning of Article 13(3)(a) 
of Constitution, 1950 and violative of Articles 14 and 19 (I) (g) thereof. is G 
quashed. 
Words and phrases-Any other qualification that he may possess-In 
I ;27 
H 
1128 
SUPREME COURT REPORTS 
(2007] 6 S.C.R. 
A context of Section 7 of Chartered Accountants Act, 1949. 
Words and phrases-Misconduct-In context of Section 22 a/Chartered 
Accountants Act, 1949. 
Appellant is a registered Society offering the Chartered Financial 
B Analyst Course/Programme. Respondent issued a notification prescribing 
that if any of its members i.e. any Chartered Accountant, had obtained the 
qualification from appellant and did not surrender the same by a prescribed 
date, they would be held to be guilty of professional misconduct under the 
Chartered Accountants Act, 1949. Aggrieved by this, appellant filed a writ 
C petition before High Court, but same was dismissed. Hence the present appeal. 
Appellant contented that (i) the notification issued by respondent was 
violative of fundamental rights under Articles 14 and 19(1) (g) of the 
Constitution oflndia, 1950; (ii) second part of the proviso to Section 7 of the 
Act enables the member of the Institute to use any qualification and in that 
D view of the matter the qualification acquired by any Chartered Accountant 
from them being a matter of statutory right, it cannot be taken away by a 
delegated notification. 
Respondents contended that (i) under Section 7 of the Act, a Chartered 
Accountant was prohibited from using any other description, whether in 
E addition thereto or in substitution thereof; (ii) the letters 'CFA' closely 
resemble 'FCA' and are capable of misleading the lay public and also conveying 
the entirely erroneous impression that a FCA with a CFA is superior to a 
mere 'FCA'; (iii) proviso to Section 7 permits addition of a description or 
letters to name to indicate membership of another Institute of Accountancy, 
only if that other Institute, has been recognized by them and not otherwise; 
F (iv) the 'other qualification' occurring to in the latter part of the proviso to 
Section 7 refers to the qualification other than membership of an Institute of 
Accountancy such as LL.B., Ph.D, MBA, MBBS etc; (v) the proviso cannot be 
so construed as to nullify completely the prohibition in the opening part of 
Section 7; (vi) their view that appellant is an institute of accountancy should 
G not be interfered with by the Court having regard to their expertise in the 
field of accountancy in general; (vii) item No. (i) of Part II of the Second 
Schedule of the Act

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