A two-judge bench of the Supreme Court, while setting aside a High Court order, observed that the chartered accountants can be proceeded against for their acts which bring disrepute to the profession whether or not related to his professional work.
The bench comprising Justice Rohinton Fali Nariman and Justice Navin Sinha was considering an appeal filed by the Council of The Institute Of Chartered Accountants Of India against a high court order that rejected its recommendation to remove a chartered accountant.
The Supreme Court quashed the order of the High Court directed to re-consider the allegation of misconduct by the Chartered Accountant for his acts not related to his professional work.
The allegation against the Respondent, a Chartered Accountant, was relating to the sale of 100 shares in 1999, which were transferred to the Chartered Accountant’s own name.
Before the Apex Court, it was submitted 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 -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.
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.
Quashing the High Court order, the Supreme Court observed that “We are afraid that the High Court has not correctly appreciated Section 21(3) of the Chartered Accountants Act, 1949.”
“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,” the bench said.
“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,” the bench concluded.
Subscribe Taxscan Premium to view the Judgment
