Every act of a CA cannot be termed as act in professional capacity

Every act of a Chartered Accountant cannot be considered as an act done in professional capacity

Brief of the case:

• The Hon’ble Delhi HC in the above cited case held that acts performed by Chartered Accountant in professional capacity only to be examined to check for professional misconduct and not each and every illegal , unworthy act or mischief cannot be considered as performed as professional.
• Therefore, an act of encashing dividend by cheating transferee is purely a commercial transaction in individual capacity and not in professional capacity, thus , such an unworthy act won’t make CA liable to face disciplinary proceedings under CA Act,1949.
  

Facts of the case:

• One Mr. Mohit Gupta claimed that Mr. Gurvinder Singh ,Chartered Accountant (respondent) sold 100 shares of Aban Lyod Chiles Offshore Ltd. to him in November 1999 but he lodged the transfer deed for transfer of the shares on November 04, 2004.
• In the interim period Mr. Gurvinder continued to receive dividends and in July 2004 obtained duplicate share certificates in his name by misrepresenting that the original share certificates were lost. He complained such an act of Mr. Gurvinder to Disciplinary Committee of the Institute of Chartered Accountants of India.
• Disciplinary Committee found conduct of Chartered Accountant as professional misconduct and proposed to levy penalty and removal of name from the Register of Members for a period of six months.
  

Held by the Hon’ble Delhi HC:

• The court observed that whether the conduct of Mr. Gurvinder would attract disciplinary proceedings of ICAI for professional misconduct depend on the capacity in which Mr. Gurvinder acted so.
• A member of institute in practice would be liable of professional misconduct when does an act enumerated in Part I of the First Schedule of Chartered Accountant Act, 1949.A member of institute would be deemed to be in practice when, for remuneration received or to be received the person performs the acts enumerated in Sec 2(2) of the CA Act,1949.
• A CA may drive rashly and negligently and in the process may kill a human being. This conduct would be an offence, but not a misconduct for the purposes of the Act Similarly , 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.
• Accordingly, Mr. Gurvinder ‘s conduct was not professional misconduct thereby won’t attract any disciplinary proceeding under CA Act,1949.