Mohit Bansal Vs Institute of Chartered Accountants of India (Delhi High Court)
Facts- The petitioner was enrolled as CA on 25th January 2008. After his enrolment, vide judgement dated 23rd September 2009, the petitioner was convicted by the Trial court for the offences punishable under section 376(2)(g) read with Explanation I and section 506-II of the IPC.
After that the Petitioner filed an application on 6th January 2014, before the HC U/s 4 and 6 of the Probation of Offenders Act, 1958 read with Section 482 of the CrPC. In the said application he sought benefit of probation on the ground that the sentence already undergone by him would cast a stigma on his profession and he would be disqualified by the ICAI. The said application was negatived on the ground that once the Criminal Appeal had been disposed of, the Court had no power to alter its judgment, except to correct a clerical or arithmetical error. Given the fact that the period of conviction was already undergone, the Court held that it had become functus officio.
After some dispute with Petitioner’s wife and NIRC member, the issue about his conviction was raised in ICAI. It was observed that offences qua which the Petitioner was convicted were involving ‘moral turpitude’ and hence it was recommended removal of Petitioner’s name from the ICAI register u/s 8(v) of the Act.
Conclusion- This Court has not been shown any policy or disclosure requirements that are asked for from candidates or CAs either at inception or thereafter. There is a clear need for the ICAI to create a framework wherein there is proper disclosure by candidates who apply to become Chartered Accountants, at the inception itself. There is also a need for a continuing disclosure, may be on an annual basis for members to inform the ICAI if there are any criminal cases / conviction etc., against them, so that the ICAI is not kept in the dark. The power, discretion and duty of ensuring the purity of the Register of Members is upon the ICAI.
Thus, in the case of convictions, the factum of the said conviction and the offences qua which the applicant was convicted ought to be disclosed.
In the case of an FIR or a Criminal Complaint having been filed, there ought to be an obligation upon the applicant to keep the ICAI informed and updated, as to the progress in the said Complaint/Case. ICAI shall accordingly frame a policy and a mechanism, if not already in existence, for disclosure by members both at the inception as also on a periodic basis thereafter, of any criminal cases or convictions so that the spirit and intent of the statute is given effect to and the ICAI is not in the dark about the same until it is notified by some information or complaint.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The Petitioner- Mohit Bansal, is a qualified Chartered Accountant (hereinafter “CA”), enrolled with the Respondent No. 1 – Institute of Chartered Accountants of India (hereinafter, “ICAI”) since 25th January 2008.
2. The ICAI issued a notice dated 25th June 2018, to show cause as to why action under Section 8 of the Chartered Accountants Act, 1949 (hereinafter, “Act”) should not be taken against the Petitioner in view of his conviction by the Delhi High Court under Sections 354 and 506-II of the Indian Penal Code 1860. The operative portion of the said notice reads as under:
“Please refer to your letter dated 27.01.2017 sending therewith a copy of the judgment dated 07.10.2013 of the Hon’ble Delhi High Court in the Cr.LA no. 828 of 2009 filed by you. Relying on the aforesaid judgment dated 07.10.2013, you have stated that the Hon’ble High Court of Delhi has acquitted you from the charge levelled under Section 376(2)(g) of the Indian Penal Code, 1860.
However it has been noticed that vide the same judgment, the Hon’ble Delhi High Court has convicted you under another Section 354 of the Indian Penal Code, 1860, i.e., ‘Assault or criminal force to woman with intent to outrage her modesty’ and also maintained your earlier conviction under Section 506-II of the IPC i.e. ‘Punishment for criminal intimidation’ (para 109, 110 and 113 of judgment).
It has further been noticed that you had filed an application u/s 4 and 6 of the Probation of Offenders Act, 1958 read with Section 482 of the Code of Criminal Procedure Crl. M.A. No. 1117/3014 in Crl. Appeal No. 828/2009, seeking probation in terms of your conviction which was dismissed by the Hon’ble Delhi High Court vide its judgment dated 12.11.2014.
In this connection, it is informed that the above matter along with your letter dated 27.01.2017 was considered by the Council. On perusal of the judgments passed by the Hon’ble Delhi High Court, it is clear that you have been convicted u/s 354 of the Indian Penal Code, 1860, for ‘Assault or criminal force to woman with intent to outrage her modesty’ which involves moral turpitude and attracts the provisions of Section 8 of the Chartered Accountants Act, 1949. Your conviction under Section 506-II of the Indian Penal Code has also been upheld by the Hon’ble Delhi High Court. In your letter dated 27.01.2017, you have informed that neither you nor prosecution had moved before the Hon’ble Supreme Court of India against the judgment dated 07.10.2013. The Council, however, decided that before taking action in the matter, a copy each of the judgment be forwarded to you for your reference and you be also given an opportunity of being head before the Council. The copies of the judgments dated 07.10.2013 and 12.11.2014 are enclosed herewith for your reference.
You are hereby advised to appear before the Council at 11.00. A.M. on 7th August 2018 at Hotel Taj Swarna, Plot No. C-3, Outer Circular Road, Opp. Basant Avenue, Amritsar, Punjab-143001 to explain as to why action under Section 8 of the Chartered Accountants Act, 1949 should not be taken against you in view of your conviction under Section 354 and 506-II of the Indian Penal Code, 1860. You may also send your written submissions, if any, within 7 days of the receipt of this letter.
It may also be noted that if no response is received from you in the matter within the stipulated time and/or you do not appear before the Council in person for hearing on the date, time and venue as specified above, the matter will be considered and decided by the Council without any further reference to you in accordance with the provisions of Section 8 of the Chartered Accountants Act, 1949.”
3. To this, a detailed reply was filed by the Petitioner on 26th October 2018. Post this, on 14th September 2020, notice to appear for hearing was issued to the Petitioner. The said notice for hearing reads as under:
“Please refer to our notice no. 1-CA(1)/Council Affairs- MB dated 25.06.2018 affording an opportunity of being heard in the proceedings under Section 8(v) read with Section 20(1)(d) of the Chartered Accountants Act, 1949, against you, arising out of your conviction under Section 354 and 506-II of the Indian Penal Code, 1860 by the Hon’ble Delhi High Court, vide judgment dated 07.10.2013 the Cr. LA No. 828 of 2009.
In this connection, it is informed that the matter is now listed for hearing before the Council on 24th September 2020. You are hereby advised to appear before the Council on 24th September 2020 at 3:00 PM in the premises of the Institute located at ICAI Bhawan, Indraprastha Marg, New Delhi-110002 to explain as to why action under Section 8(v) read with 20(1)(d) of the Chartered Accountants Act, 1949 should not be taken against you in view of your conviction under Section 354 and 506-II of the Indian Penal Code, 1860.
Alternatively, you may also appear before the Council through Video Conference on the scheduled date and time for which separate link will be sent to you through Email at your request. You may also send your written submissions, if any, within 7 days of the receipt of this letter.
It may also be noted that if no response is received from you in the matter within the stipulated time and/or you do noy avail the opportunity of hearing before the Council on the date, time and venue as specified above, the matter will be considered and decided by the Council without any further reference to you in accordance with the provisions of the Chartered Accountants Act, 1949.”
4. The prayer of the Petitioner is to quash this notice of hearing dated 14th September 2020, served upon him by the ICAI, and the entire proceedings under Section 8(v) read with Section 20(1)(d) of the Act initiated against him. The reliefs sought in the Petition are as under:
“A] Allow the present petition and Quash/Set-aside the impugned Notice dated 14.09.2020 for conducting proceedings under Section 8(v) read with Section 20(1)(d) of the Chartered Accountants Act, 1949 and the entire proceedings instituted against the Petitioner at the behest of Respondent No. 1; and
B] Pass such other and further order[s] as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case in and in the interest of justice.”
Background of the Criminal proceedings against the Petitioner
5. FIR No. 646/2001 was lodged against the Petitioner on 7th September 2001, at PS Rohini for offences punishable under Sections 365/376/342/354/34 of the IPC. At that time, the Petitioner had cleared his CA Foundation and had received the certificate in respect thereof on 12th July 2001. Post the FIR having been registered against the Petitioner, investigation was conducted, and after the completion of investigation, charges under Section 366 IPC, Section 376(2)(g) IPC and Section 506-II IPC, were framed against him. In the meantime, he had appeared in the next level of examinations and qualified as a Chartered Accountant. He was enrolled on 25th January 2008.
6. After his enrolment, vide judgment dated 23rd September 2009, the Petitioner was convicted by the Trial Court for the offences punishable under Sections 376(2)(g) read with Explanation 1 and Section 506-II of the IPC. He was sentenced to seven years imprisonment with a fine of Rs.25,000/-. He appealed against the conviction and sentence vide Crl. A. 828/2009 titled Mohit Bansal v. State of NCT of Delhi before this Court.
7. In the said appeal, initially, his sentence was suspended vide order dated 5th February 2010, and thereafter, vide judgment dated 7th October 2013, the Petitioner was acquitted for the offence punishable under Section 376(2)(g) IPC. However, he was convicted under Section 354 IPC and Section 506-II of the IPC. The sentence awarded to him was the period already undergone i.e., approximately 7 months, and a fine of Rs.25,000/-.
8. Thus, after his enrolment as a CA, he was convicted and sentenced. He underwent imprisonment until suspension, for approximately seven months. Thereafter, however, he has continued to render his services as a CA.
9. After the decision in his Appeal challenging the conviction, the Petitioner filed an application on 6th January 2014, before the High Court under Sections 4 and 6 of the Probation of Offenders Act, 1958 read with Section 482 of the CrPC. In the said application he sought benefit of probation on the ground that the sentence already undergone by him would cast a stigma on his profession and he would be disqualified by the ICAI. The said application was negatived by a ld. Single Judge of this Court, vide judgment dated 12th November 2014, on the ground that once the Criminal Appeal had been disposed of, the Court had no power to alter its judgment, except to correct a clerical or arithmetical error. Given the fact that the period of conviction was already undergone, the Court held that it had become functus officio. The relevant portion of the said order reads:
“This Court notes that after the appeal had been disposed of by this Court on 07.10.2013 and while altering the conviction of the applicant from Section 376(2)(g) to Section 354 of the IPC and also modifying the sentence to the period already undergone by him, this Court has become functus officio. This Court, at this stage, has no power to alter its own judgment. This is clearly stipulated in Section 362 of the CrPC. There is a clear mandate in the language used in the said Section. It prohibits a criminal Court, after signing its judgment or final order, disposing of the case, to alter or review the same except to correct a clerical or arithmetical error. It is not the case of the applicant that by granting benefit of probation and altering the sentence from the period already undergone, it would not amount to correct a clerical or an arithmetical error.”
10. In the meantime, the Petitioner’s wife who is also a Chartered Accountant is stated to have been elected as a member of the Northern India Regional Council. Certain disputes arose between the Petitioner’s wife and the Respondent no.3, Mr. Atul Gupta, who was the Chairman of the NIRC, at that time, related to certain allegations levelled against him qua Provident Fund frauds. As per the Petitioner, matters appear to have taken an ugly turn when the Petitioner’s wife sought to contest for the Central Council of ICAI, at which point, the issue about his conviction was raised in the ICAI leading to the show cause notice being issued against him.
Proceedings before the ICAI
11. The ICAI had in its 18th meeting of the Management Committee on 29th July 2017 and 9th August 2017, after due deliberations, observed that the offences qua which the Petitioner was convicted were involving ‘moral turpitude’ and hence recommended his removal from the register under Section 8(v) of the Act. The Committee also observed that disciplinary proceedings under the Act could not have been opened against him, as the offence in question was committed prior to him having enrolled as a CA. Thereafter vide its 375th Meeting dated 13th June 2018 and 14th June 2018, the ICAI council decided to afford the Petitioner an opportunity of hearing prior to removing him from the Register under Section 8(v) of the Act.
12. Accordingly, show cause notice dated 25th June 2018 was issued to the Petitioner, asking him to appear before the Council to explain as to why action under Section 8 of the Act should not be taken against him. He was also given liberty to file a written response to the said notice. On 26th October 2018, the Petitioner filed his detailed written response to the said show cause notice. On 14th September 2020, the impugned notice was served upon the Petitioner intimating him of the next date of hearing in the matter being 24th September 2020, to explain as to why he should not be disqualified under Section 8 of the Act.
13. Upon receiving the said impugned notice, the Petitioner filed the present writ petition to quash the said notice, as also the proceedings against him, on the ground that Section 8(v) was not applicable in his case.
Proceedings in this writ petition:
14. Notice was issued in the present writ petition on 23rd September 2020, and Mr. Atul Kumar Gupta, the then President of ICAI, against whom allegations of malafide were raised, was impleaded in this petition as Respondent No. 3. On the said date, upon an assurance given on behalf of Respondent No. 1, the proceedings before the ICAI scheduled to be held on 24th September 2020 were postponed during the pendency of the present petition. In effect therefore, the proceedings pursuant to the impugned notice of hearing have remained stayed during the pendency of the present writ petition.
15. Thereafter, submissions have been heard by this Court, in this matter, from time to time. Initially, Mr. Manav Gupta, ld. Counsel made submissions on behalf of the Petitioner, however he requested for discharge on 6th September 2021. Since then, Mr. Bansal – Petitioner, has made submissions, in person.
Submissions on behalf of the Petitioner:
16. On behalf of the Petitioner it is, firstly, submitted that the wife of the Petitioner, who is a professional CA, had some disputes with one Mr. Atul Gupta- Respondent No.3, who later on went on to become the President of the ICAI. He submitted that it is at his behest that a decision was taken to debar the Petitioner from practising as a CA in view of the disability provided under Section 8(v) of the Act. It is thereafter, that the notice for hearing dated 14th September 2020 was served upon the Petitioner. Allegations of personal enmity and malafide on the part of the Respondent No. 3 is raised.
17. It is further submitted that the Petitioner and his wife are professionals, who are fully qualified CAs, and it is only in view of the personal enmity with Mr. Atul Gupta that the entire issue has been raised in the Institute, despite opposition from various members of the Committee. Reliance is placed upon the minutes of the meeting dated 13th-14th June 2018, to submit that a perusal of the said minutes would itself show that most of the members did not agree with the coercive action being taken by the ICAI in the present case.
18. On the issue of interpretation of Section 8(v) of the Act, it is urged that ‘moral turpitude’ under the said section, would only include such offences which are committed in professional capacity, or have a nexus with the profession, and not otherwise. In any event, since the incident qua which the Petitioner was convicted took place in 2001, i.e., much prior to him qualifying and being enrolled as a CA, the provisions of Section 8(v) of the Act would not apply to the case of the Petitioner.
19. Relying upon the letter dated 22nd October 2018, issued by the Ministry of Corporate Affairs, Union of India, which was sent in pursuance of the urgent email for clarification that was sent by Mr. Bansal, the Petitioner had sought a pardon from the Ministry. As per the Petitioner the Ministry has clearly opined in the said letter that the Petitioner’s case does not fall within Section 8(v) of the Act, as the incident was not professional misconduct, and in fact took place prior to the Petitioner acquiring his professional qualification.
20. Appearing in person, Mr. Bansal, has relied upon the judgment of the Andhra Pradesh High Court in Ch. Ramakrishna Rao v. State (Crl.A.M.P.No.751 of 2014 and batch, decided on 20th October 2014) to submit that offences under Section 8(v) would only be applicable if the accountant has committed an offence in professional capacity. He submits that in his case the offence was during his student days, i.e., during the year 2001 and he only qualified as a CA in 2008. He, thus, submits that the disability under Section 8 would not be applicable to his case, as the words ‘in professional capacity’, in the said provision, would have to be read along with its initial part, and there is no link to the offence committed by him with his services as a CA.
21. Mr. Bansal further relies upon the manual for members and students, which is circulated as part of the Background Material for orientation programs by the ICAI, to submit that on page 7 of the said manual, the ICAI has itself given a clear interpretation that a person is not eligible to be enrolled as a member of the ICAI if the offence committed, involving moral turpitude, is in professional capacity. Relying upon the said Background Material, as also the clarification issued by the Ministry of Corporate Affairs in its letter dated 22nd October 2018, he again submits that unless and until the conviction is due to an offence in his professional capacity, disqualification would be contrary to law.
22. Mr. Bansal further urges that principles of natural justice have been completely given a go by in the present case. Relying upon the transcripts of the meeting of the ICAI dated 13th-14th June 2018, he submits that a perusal of the said transcript would show that the members of the ICAI have emphasized on the compliance of the principles of natural justice and have raised apprehensions of the said procedures not being followed. He submits that it is also recorded in the said transcript that information regarding the said disciplinary proceedings was not given to Petitioner. He relies upon the letter received under the Right to Information Act, 2005, to argue that even in the reply under to his RTI request, it is not clear as to who sent the complaint against the Petitioner. He submits that the said reply clearly confirms that the complaint was received from an external source.
23. He submits that the disciplinary proceedings against him are ultra vires as they are violative of Rule 7(3) of the The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, read with Section 21 of the Act. He submits that the information against the Petitioner was received on 16th January 2017, and on 29th July 2017, the recommendation was made to remove him from rolls of ICAI. However, before making the recommendation, the Petitioner was not called even once, to be heard. Reliance is placed on the following decisions to argue that the procedures of the Disciplinary Directorate under the Act ought to be followed, however the same have clearly not been followed, and the same is a violation of natural justice:
(i) ICAI v. Vimal Kumar Surana and ors., (2011) 1 SCC 534;
(ii) ICAI v. L.K. Ratna and ors., (1986) 4 SCC 537;
(iii) Subramani Gopalkrishnan v. ICAI, 181 (2011) DLT 280;
(iv) Partha Ghosh and ors. v. ICAI, 2009 (111) BOMLR 1874;
(v) Manubhai v. Secretary, ICAI, 2020 GLH (2) 545.
24. Mr. Bansal, then relies upon the judgment dated 7th October 2013 by which he was convicted by this Court under Sections 354 IPC and Section 506-II IPC and was acquitted under Section 376(2)(g) IPC, to argue that his conviction was for the period of sentence already undergone, i.e., 7 months. No further sentence was levied on him, and the period undergone along with a fine of Rs. 25,000 was considered sufficient.
25. Finally, Mr. Bansal submits that the show cause notice issued claims to have been issued under Section 8(v) read with Section 20(1)(d) of the Act, and he has filed his detailed reply to the said notice. However, he has no confidence that he would be treated fairly by the ICAI. He does not accept the proceedings against him to be fair and non-arbitrary, inspite of the President of the ICAI having been changed.
Submissions on behalf of the Respondents:
26. Mr. Srinivasan, ld. Senior Counsel, appearing along with Ms. Pooja Sehgal, ld. counsel, for the ICAI, submits that a reading of Section 8(v) of the Act would clearly show that it covers an offence involving moral turpitude which could have taken place at the time when the name of the Petitioner was “entered in or borne on the register”. Thus, according to him, at the time when the Petitioner’s name was entered in the register itself, the Petitioner was guilty of committing an offence of ‘moral turpitude’, which became very clear when the conviction took place, and was also upheld by the Court. Since there is no pardon that has been granted to the Petitioner, the disability under Section 8(v) of the Act would clearly be applicable.
27. On the question of interpretation of Section 8(v), and the contention of the Petitioner that the offence must be conducted in ‘professional capacity’ for it to be covered under the disability contemplated within this Section, it is the submission of Mr. Srinivasan, that there are two kinds of situations that are contemplated under this provision:
i) One covering offences of moral turpitude;
ii) Second covering offences of a non-technical nature, committed in professional capacity.
He submits that the commission of offences in professional capacity cannot be linked with offences involving moral turpitude, and both of these are separate categories. He further submits that if the interpretation given by the Petitioner is accepted, the purport of the entire Section would itself become meaningless.
28. Reliance is also placed upon Section 20(1)(d) of the Act to argue that if there is a disability under Section 8, the name cannot be entered in/borne on the register, and therefore the disability could be attracted even if the offences are committed prior to the Petitioner enrolling as a CA. He further submits that the manner in which Section 8 of the Act is worded makes it clear that any disqualification set out in the said section would bar both the name of the person being entered into, or even continuing on the register. The fact that the words used in the Section are entered in or borne in, in his submission, shows that a conviction qua an offence involving moral turpitude, would be a disability even at the time when the name is being entered in the register, meaning thereby that if a person is convicted, even if they qualify the CA examination, their name would not be liable to be entered in the register. He, thus, submits that the wording of the said Section makes it clear that the offence need not be one committed in the professional capacity alone.
29. Reliance is then placed upon the judgment of the Madras High Court in P.Mohanasundaram vs. President, ICAI (W.A. No. 1662 of 2010, decided on 30th April 2013), which involved a CA who was alleged to have been guilty of bigamy. A division bench of the Madras High Court had interpreted the purport of Section 8(v) of the Act and held that the conviction for bigamy having been upheld, inspite of the sentence having reduced, the decision to remove the name of the person convicted from the register on the ground of ‘moral turpitude’ is valid.
30. On a query from the Court as to whether there can be a lifelong ban on any person who has been convicted of any offence involving moral turpitude from becoming a CA and whether the same would be violative of Article 19(1)(g), Mr. Srinivasan, drawing an analogy with the interpretation of a similar provision, relies upon Section 24A(1)(a) of the Advocates Act and the judgments of the Supreme Court in Mahipal Singh Rana v. State of UP (2016) 8 SCC 335, as also of the Gujarat High Court in C v. Bar Council of Gujarat (1983) GLH 297, to argue that both the High Court and the Supreme Court in the said cases were of the opinion that limiting the period of disqualification of a convicted person to only 2 years in the scheme of the Advocates Act has been rendered as insufficient, considering the nature of the duties performed by the lawyers.
31. He submits that the Supreme Court in Mahipal Singh Rana (supra) also directed that the Law Commission should take a look at the said provision. The Law Commission in its 266th Report, after perusing the said Section, has recommended that the bar to practice/ or be an advocate should operate fully post the enrolment, if an offence involving moral turpitude is committed. The Law Commission has suggested the said amendment to Section 24A of the Advocates Act and has forwarded the same to the Government.
32. Mr. Srinivasan further draws a parallel with various other statutes in which such disqualifications exist including- Section 8 of the Representation of People Act, 1951, Section 8 of the Cost and Works Accountants Act, 1959, Section 8 of the Company Secretaries Act, 1980, Ordinance 1 of the Delhi University Act, 1922, Section 67 of the UP State Universities Act, 1973, Section 3 of the Lokpal and Lokayutas Act 2013, Section 7 of the National Medical Commission Act, 2019, Section 14 of the Right to Information Act, 2005, Section 417 of the Companies Act, 2013 as well as Section 164 of the Companies Act, where any person who is convicted an offence involving moral turpitude or otherwise, would be disqualified from being appointed as a Director of the Company, and shall be removed from the position of a Director of the Company.
33. He submits that the profession of Chartered Accountancy requires high standards of integrity to be maintained, and the provision of Section 8(v), thus, ought to be interpreted in the manner that it is crafted, i.e., to include any person convicted on any offence involving moral turpitude. Finally, Mr. Srinivasan submits that there is no challenge to the constitutional validity of Section 8 of the Act that has been raised in the present petition.
Rejoinder submissions on behalf of the Petitioner:
34. In rejoinder, Mr. Bansal, appearing in person, has attempted to distinguish P. Mohanasundaram (supra) by arguing that the facts of the said case are completely distinct from the present case. He submits that in the said case, the CA in question was enrolled in 1975 and the offence was committed in 1984. However, in the present case the offence is 7 years prior to Mr. Bansal being enrolled as a CA. He further submits that in P. Mohansundaram (supra), the CA in question did not even respond to the notice of the ICAI, and therefore, an order was passed under Section 21 of the Act. He submits that the distinction in facts needs to be noticed in the said case.
35. He relies upon the following cases to canvass the submission that if the facts are different, the precedent cannot be squarely applied by this Court:
(i) Ranchoddas Atmarain v. Union of India and Ors., (1961) 3 SCR 718;
(ii) Ashwani Kumar Singh v. Union Public Services Commission and Ors., (2003)11 SCC 584;
(iii) Union of India v. Chajju Ram (Dead) by LRs, 2003(5) SCC 568.
36. Mr. Bansal further responds to the judgments placed on record by the ICAI by submitting that in all these cases the persons concerned were involved in misconduct committed in a professional capacity. Even the Law Commission’s 266th report deals with only such situations involving offences in professional capacity. In his case, he submits that he had cleared the CA foundation exam prior to the date of offence, i.e., 7th September, 2001. He was finally enrolled as a CA on 25th January, 2008. The conviction for the offence that took place on 7th September, 2001, was issued by the court on 23rd September, 2009, post his enrolment as a CA.
37. He further submits that in the case of CAs, no disclosure requirements exist while being enrolled, as is required in the Delhi Police Service Rules. Further, distinguishing the facts in Mahipal Singh Rana (supra), he submits that none of the offences which are mentioned therein for the purposes of person holding public offices, apply in this case.
38. Mr. Bansal impresses upon the Court that he has no legal acumen and he accordingly approached the Ministry of Corporate Affairs, Union of India, seeking a clarification in respect of the applicability of provisions of Section 8 of the Act to him. The Ministry of Corporate Affairs has clarified to him that Section 8(v) has no application in this case as the offence was not committed in a professional capacity, and hence although his application for removal of disability was been rejected as premature and infructuous by the Central Government, the said disability would not even apply to him. He further submits that the application moved by him under the Probation of the Offenders Act, 1958, was dismissed on 12th November, 2014 by a ld. Single Judge of this court only on the ground that the court was functus officio after the conviction was upheld by this court, and thus on the question of probation, no decision was given on merits.
39. In conclusion, Mr. Bansal, relies upon Article 22 of the Constitution of India, to argue that double jeopardy is prohibited, inasmuch as, since he has already undergone his sentence in terms of the judgment of the High Court dated 7th October, 2013, not permitting him to continue in his profession as a CA would constitute double jeopardy, and cannot be permissible.
Analysis and Findings
40. Heard. The profession of Chartered Accountancy is regulated by the Chartered Accountants Act, 1949. The Regulatory Board is the Institute of Chartered Accountants of India (‘ICAI’), which maintains the Register of Chartered Accountants. As per Section 5 of the Act, there are two categories of members of the Institute – Associates and Fellows. The ICAI conducts examinations which have to be cleared for a person to be recognised as a CA. The ICAI also issues a certificate of practice to such persons who qualify the said exam. Unless and until a person obtains a certificate of practice, he or she cannot practice the profession of Chartered Accountancy in India.
41. Section 8 of the Act stipulates the disabilities- which are in the form of pre-conditions for a person to be able to qualify as a CA under the Act. Such conditions are worded as ‘Disabilities’ – i.e., in a negative manner in contrast with Eligibility Conditions usually prescribed, that are positive requirements. The section reads as under:
“8. Disabilities
Notwithstanding anything contained in Section 4, a person shall not be entitled to have his name entered in or borne on the Register if he –
(i) has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or
(ii) is of unsound mind and stands so adjudged by a competent Court; or
(iii) is an undischarged insolvent; or
(iv) being a discharged insolvent, has not obtained from the Court a certificate stating that his insolvency was caused by misfortune without any misconduct on his part; or
(v) has been convicted by a competent Court whether within or without India, of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability; or
(vi) has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct:
Provided that a person who has been removed from membership for a specified period, shall not be entitled to have his name entered in the Register until the expiry of such period.”
42. A perusal of the above provision reveals that the Act contemplates the following disabilities due to which a person cannot seek registration or continuation as a CA:
i) if the person has not attained the age of 21 years i.e., only a person above the age of 21 years can apply to be a CA;
ii) if the person is of unsound mind and has been held so by a competent Court of law;
iii) if the person is an undischarged insolvent i.e., a person who is insolvent and has also not been able to thereafter discharge all his debts;
iv) if the person is a discharged insolvent who has not been certified by a Court that the insolvency was due to misfortune and without any misconduct by the person.
43. The next two disabilities as stipulated under Sections 8 (v) & 8 (vi) of the Act, are the subject matter of the present petition.
44. A perusal of Section 8(v) shows that it is in two parts. It contemplates a disability from being enrolled as a CA, on being convicted in two classes of offences –
(i) The first class of offences are those that involve ‘moral turpitude’ and are punishable with transportation or imprisonment,
(ii) The second class are offences that are committed by a person in their professional capacity, which are not of a technical nature.
45. The latter part of the Section beginning with “unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, remove the disability” provides for two exceptions. The first exception is if a person has been granted ‘pardon’ in respect of offences committed by him. The second exception is if the Central Government has removed the disability upon the application of the said person. The question is whether both these exceptions would apply to both classes of offences as set out above or not. The answer to this question would be in the negative. The said provision would have to be read in a manner where the first exception applies only to the first class of offence and the second exception applies only to the second class of offences. If the offence is one involving ‘moral turpitude’, a pardon can be granted under criminal law. If the offence is technical in nature, the Central Government can remove the disability. Reading the aforementioned section in any other manner would not be rational as the Central Government cannot be vested with the power to remove a disability which has its genesis in conviction for an offence involving moral turpitude.
Further, if the offence is one committed in a professional capacity which is not of a technical nature, no pardon would be required. Thus, the two classes of offences contemplated under Section 8(v) would have to be read as under:
(i) The first class of offences are those that involve ‘moral turpitude’ and are punishable with transportation or imprisonment, and no pardon has been granted in respect thereof;
(ii) The second class are offences that are committed by a person in their professional capacity, which are not of a technical nature, in respect of which the Central Government has not, by an order in writing, removed the disability.
46. Although, from a bare reading of sub-section 8(v), it may appear that the Central Government would have the power to remove the disability even in offences involving ‘moral turpitude’, however in the opinion of this Court, in case of an offence or a conviction involving ‘moral turpitude’, such power being vested with the Central Government would be contrary to the spirit of the statute as also contrary to the settled judicial precedents which are discussed below, to the effect that `moral turpitude’ would be a complete disqualification.
47. The use of the expression “entered in” contained in Section 8, also shows that offences committed prior to the person qualifying to become a CA are also within the purview of the disabilities mentioned under Section 8 of the Act. The only condition upon which a person convicted can be entered into or can continue on the register of ICAI, would be if the person has been granted a pardon, or if the Central Government has removed the disability, as applicable, on an application filed by the said person.
48. Section 8 (vi) deals with ‘professional’ or ‘other misconduct’. For this disability to be attracted, an inquiry would have to be held and the person would have to be found guilty of such professional or other misconduct. Professional and other misconduct are defined in the two Schedules to the Act, and the procedure to followed for inquiry in respect of the same is contemplated in Section 21.
49. The proviso to sub-section (vi) makes it clear that in the case of professional or other misconduct, the removal from membership can also be for a specified period, however, this proviso would not apply in the case of offences in sub-section (v) of the Act.
50. Thus, there are three categories of disabilities that are contemplated under Sections 8 (v) and 8 (vi), when read together:
(i) Conviction for an offence involving ‘moral turpitude’;
(ii) Conviction for an offence committed in professional capacity which is not technical in nature;
(iii) Person held guilty of ‘professional’ or ‘other misconduct’ post an inquiry by the Disciplinary Committee, as per Section 21 of the Act.
51. If any of the disabilities as discussed above exist – either at inception or even after a person has qualified as a Chartered Accountant, and is a member of the ICAI, such person would not be entitled to have their name entered upon and would be liable to have their name removed from the register of the ICAI.
52. The next relevant provision is Section 20 of the Act, which reads as under:
“20. Removal from the Register
(1) The Council may remove from the Register the name of any member of the Institute−
(a) who is dead; or
(b) from whom a request has been rec eived to that effect; or
(c) who has not paid any prescribed fee required to be paid by him; or
(d) who is found to have been subject at the time when his name was entered in the Register, or who at any time thereafter has become subject, to any of the disabilities mentioned in Section 8, or who for any other reason has ceased to be entitled to have his name borne on the Register.
(2) The Council shall remove from the Register the name of any member in respect of whom an order has been passed under this Act removing him from membership of the Institute.
(3) If the name of any member has been removed from the Register under clause (c) of sub-section (1), on receipt of an application, his name may be entered again in the Register on payment of the arrears of annual fee and entrance fee along with such additional fee, as may be determined, by notification, by the Council which shall not exceed rupees two thousand:
Provided that the Council may with the prior approval of the Central Government, determine the fee exceeding rupees two thousand, which shall not in any case exceed rupees four thousand.”
53. A perusal of Section 20 above shows that removal of the name of a person from the register may be effected in cases where:
