CA guilty of outraging modesty of a woman and/or other offences involving moral turpitude, ICAI has power to hold that the conduct was below the dignity of the profession – High court
ABCAUS Case Law Citation:
ABCAUS 2780 (2019) (02) HC
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The petitioner was a practicing Chartered Accountant (CA) and a member of the Institute of Chartered Accountants of India (ICAI). The petitioner had filed a petition impugning the order of the Board of Discipline of ICAI (the Board) whereby the Board disagreed with the prima facie, opinion of the Director (Discipline) that the petitioner was not guilty of “other misconduct” falling within the meaning of Clause 2 of Part IV of the First Schedule to the Chartered Accountants Act, 1949 (the Act).
The allegation against the petitioner was that he had outraged the modesty of the daughter of the respondent and also committed certain offences punishable under the Indian Penal Code, 1860 (IPC).
It was also alleged that the petitioner was stalking her and had repeatedly accosted her while she was on her way. It was further alleged that the petitioner had also distributed pamphlets on which HA‟s photographs were printed and the same was derogatory to her.
On complaint, the Director (Discipline), ICAI concluded that the allegations leveled against the petitioner related to interpersonal relationships and thus, he opined that the it would be appropriate if respondent sought redressal of the problems in another forum. According to the Director (Discipline), the allegations did not necessarily fall within the disciplinary mechanism in respect of professional or other misconduct as provided under the Act and the Rules framed thereunder.
However, the Board did not agreed with the prima facie opinion of the Director that the Respondent was not guilty of Other Misconduct.
It was the case of the petitioner that the allegations made against him have no bearing with him carrying on the profession as a Chartered Accountant and, therefore, the Board and/or ICAI would
have no jurisdiction to entertain a complaint in this regard.
The Hon’ble High Court observed that the Hon’ble Supreme Court had examined the provisions of the Act, as in force at the material time (prior to the amendments in the year 2006 and in the year 2011). The Court had explained that the acts of commission and omissions specified in the Schedule were not exhaustive and did not purport to limit the power of the Council under Section 21(1) of the Act.
The Hon’ble High Court also observed that in a recent decision the Supreme Court had allowed an appeal preferred against the decision of the Hon’ble High Court. In that case, a complaint was made against a Chartered Accountant who had sold certain shares of a public limited company to the complainant therein, in the year 1999. However, the transfer deeds were lodged subsequently in November, 2014. The Chartered Accountant in question continued to receive the dividends in respect of those shares. Initially, the respondent claimed that he had not sold the shares to the complainant but thereafter, settled the matter with him. The Disciplinary Committee found that the conduct of Chartered Accountant was unworthy of a member of the ICAI. The Disciplinary Committee reasoned that the Chartered Accountant in question had continued to receive dividends declared in respect of shares sold by him, because the complainant had not lodged the shares for transfer. Taking benefit of the aforesaid, the Chartered Accountant had made an attempt to deprive the purchaser of his rightful dues. The Division Bench answered the reference in favour of the Chartered Accountant and held that since he was acting in an individual capacity while dealing with the complainant and not acting as a Chartered Accountant, he could not be held guilty of misconduct. The Supreme Court allowed the ICAI‟s appeal against the said decision and held that the High Court had incorrectly appreciated the provisions of the Act.
In view of the various decisions, the Hon’ble High Court disagreed to accept the contention that the Board of Discipline does not have the jurisdiction to examine the alleged misconduct on the part of the petitioner.
The Hon’ble High Court opined that Clause (2) of Part-IV of the First Schedule to the Act is wide, and would include within its scope, any conduct that would tend to bring disrepute to the profession or the Institute. If a Chartered Accountant is found to have been guilty in outraging the modesty of a woman and/or other offences involving moral turpitude, it would not be inapposite for the Board of Discipline to also conclude that the conduct did, in fact, lower the dignity of the profession.
Regarding the contention that the Board of Discipline could not return any finding as to whether the petitioner was guilty of any of the offences alleged in the FIR, as the said matters were pending trial before the concerned Court, the Hon’ble High Court mentioned that the standards of proof as required in Disciplinary Proceedings and Criminal proceedings are different. Whereas, the standard of proof as required in the criminal proceedings is beyond reasonable doubt, the standard of proof as required in Disciplinary proceedings is preponderance of probability. Whilst, it is correct that the Board of Discipline has no jurisdiction to sentence the petitioner, it would be erroneous to contend that the Board of Discipline does not have the jurisdiction, to examine the allegations made against the petitioner, in the context of determining whether the petitioner is guilty of other misconduct as defined under Part-IV of the Schedule-I to the Act.
The Hon’ble High Court stated that there may be cases where it may be apposite to await the decision in a trial, and the Board of Discipline has the power to defer the consideration of the complaint in such cases. However, that is a matter of exercising discretion and cannot be considered as denuding the Board of its jurisdiction.
Accordingly, the Hon’ble High Court dismissed the Petition
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