Chartered Accountant Institute can suo moto initiate disciplinary proceedings against its member

C.A. Sanjay Jain Vs Institute of Chartered Accountants of India & Ors. (Delhi High Court)

Delhi High Court held that Section 21 of the Chartered Accountants Act, 1949 provides suo moto power to the institute to initiate disciplinary proceedings against its member without any written complaint/ allegation.

Facts-

These writ petitions raise the important question of whether the Institute of Chartered Accountants of India could be recognized to have a suo moto power to initiate disciplinary proceedings against its members. The question revolves around the meaning to be ascribed to the word “information” as occurring in Section 21 of the Chartered Accountants Act, 1949.

The writ petitions themselves emanate from disciplinary proceedings initiated by the Institute against the petitioners who are its members and were employed with firms which were appointed as Joint Statutory Auditors of the Punjab National Bank. The writ petitioners assail the validity of the show cause notices which were issued as well as the Prima Facie Opinion which has been drawn by the Disciplinary Directorate and forwarded for the consideration of the Disciplinary Committee. The writ petitions also seek quashing of the disciplinary proceedings itself as initiated against the individual petitioners.

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