COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA versus SHRI GURVINDER SINGH & ANR. on 16 November 2018

COUNCIL OF THE INSTITUTE OF CHARTEREDACCOUNTANTS 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 againstChartered Accountant relating to sale of shares, transferred to theChartered Accountant’s own name – Disciplinary Committee foundhis conduct derogatory in nature and held him guilty of ‘OtherMisconduct’ u/s. 22/21 – Recommendation made by the Council ofthe Institute of Chartered Accountants to the High Court to removethe Chartered Accountant for a period of six months from the rolls,however, the High Court did not impose any penalty – Correctnessof – Held: High Court did not correctly appreciate s. 21(3) –Disciplinary Committee found the Chartered Accountant guilty of apractice which was not in the Chartered Accountant’s professionalcapacity – Under Schedule I Part-IV sub clause(2), the Councilcan hold Chartered Accountant guilty if their act brings disreputeto the profession whether or not related to his professional work –Thus, the order of the High Court is set aside and the matterremanded to the High Court to be decided afresh.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11034of 2018.

From the Judgment and Order dated 16.08.2016 of the High Courtof Delhi at New Delhi in Chat. A. Ref. No. 4.2012.

Rana Mukherjee, Sr. Adv., Pramod Dayal, Nikunj Dayal, Ms. PayalDayal, Advs. for the Appellant.

Balaji Srinivasan, Ms. Pallavi Sengupta, Ms. Garima Jain,Siddhanth Kohli, Ms. Lakshmi Rao, Advs. for the Respondents.

321

A

B

C

D

E

F

G

H

322 SUPREME COURT REPORTS [2018] 14 S.C.R.

AThe Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.

2. The present appeal arises out of a complaint dated 16.03.2005against Gurvinder Singh - Respondent No.1, who is a CharteredAccountant, relating to sale of 100 shares in 1999, which were transferredBto the Chartered Accountant’s own name.

3. What has been pleaded before us is that the matter hasultimately been settled between the Complainant and the CharteredAccountant, despite which the Disciplinary Committee took up the caseand ultimately found that the conduct of the Respondent No.1-CharteredCAccountant was derogatory in nature and highly unbecoming and heldhim guilty of ‘Other Misconduct’ under Section 22 read with Section 21of the Chartered Accountants Act, 1949 (hereinafter referred to as ‘theAct’).

4. The Council of the Institute of Chartered Accountants of India,Dtherefore, made its recommendation to the High Court to remove theaforesaid Chartered Accountant for a period of six months from therolls. The High Court, by the impugned judgment dated 16.08.2016,after setting out Sections 21 and 22 of the Act, arrived at the conclusionthat:

E“14. In the instant case the respondent was acting as an individualin his dealings with the complainant which were purelycommercial. While selling the shares held by him the respondentwas not acting as a Chartered Accountant. He was not dischargingany function in relation to his practice as a Chartered Accountant.

F15. The Reference is accordingly answered by declaring the lawas above and not inflicting any penalty upon the respondent.”

5. We are afraid that the High Court has not correctly appreciatedSection 21(3) of the Chartered Accountants Act, 1949 which states asfollows:-G

“(3) Where the Director (Discipline) is of the opinion that a memberis guilty of any professional or other misconduct mentioned in theFirst Schedule, he shall place the matter before the Board ofDiscipline and where the Director (Discipline) is of the opinionthat a member is guilty of any professional or other misconductHmentioned in the Second Schedule or in both the Schedules, heshall place the matter before the Disciplinary Committee.”

COUNCIL OF THE ICAI v. SHRI GURVINDER SINGH & ANR.[R. F. NARIMAN, J.]

COUNCIL OF THE ICAI v. SHRI GURVINDER SINGH & ANR.[R. F. NARIMAN, J.]

Schedule-I Part-IV reads as follows:-

“Other Misconduct in Relation to Members of the InstituteGenerally A member of the Institute, whether in practice or not, shall bedeemed to be guilty of other misconduct, if he-