Candidate’s conviction in case of serious offence involving moral turpitude will directly attract disability contemplated u/s 8(v) of Chartered Accountants Act: Delhi HC

Read Judgment: Mohit Bansal V. Institute of Chartered Accountants Of India & Anr. 

Pankaj Bajpai

New Delhi, January 24, 2022: The Delhi High Court has opined that in case of offences involving ‘moral turpitude’, the removal of the disability contemplated u/s 8 of the Chartered Accountants Act, 1949 by the Central Government would be impermissible, and such power has been vested under the Act, only with the Council through the Board of Discipline or the Disciplinary Directorate.  

The Bench of Justice Pratibha M. Singh observed that given that the disability is at the stage of entry to the register, the clear purport of the language u/s 8 of the 1949 Act is that it is inclusive of all convictions for offences/acts involving ‘moral turpitude’, irrespective of when the same was committed.

Going by the background of the case, the ICAI (first Respondent) issued a notice to show cause as to why action u/s 8 of the 1949 Act should not be taken against Mohit Bansal (Petitioner) in view of his conviction by the Delhi High Court u/s 354 and 506-II of the IPC, 1860. The ICAI observed that the offences for which the Petitioner was convicted were involving ‘moral turpitude’ and hence recommended his removal from the register u/s 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. 

In the SCN, it was however stated that if no response was received from the Petitioner in the matter within the stipulated time and/or he did not avail the opportunity of hearing before the Council on the date, time and venue as specified, then the matter will be considered and decided by the Council without any further reference to him in accordance with the provisions of the Chartered Accountants Act. Hence, present petition was filed seeking to quash this notice of hearing served upon the Petitioner by the ICAI, and the entire proceedings u/s 8(v) r/w/s 20(1)(d) of the Act initiated against him. 

After considering the submissions, the Apex Court found from a reading of Section 8(v) & 8(vi) of the 1949 Act, that if any of the disabilities such as (a) Conviction for an offence involving ‘moral turpitude’; (b) Conviction for an offence committed in professional capacity which is not technical in nature; (c) Person held guilty of ‘professional’ or ‘other misconduct’ post an inquiry by the Disciplinary Committee, as per Section 21 of the Act  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. 

The Petitioner, in this case, having been convicted for offences u/s 354 and 506-II of IPC, is clearly attracted by the disability u/s 8(v) of the 1949 Act and he has already practiced for almost 12 years by the time the notice was issued by ICAI, added the Court. 

Justice Singh observed that ideally, ICAI ought to have had adequate checks at the time of registration itself. However, the fact that the conviction of the Petitioner may have not come to the attention of the ICAI for more than 10 years would not, in any manner, bar ICAI from taking action, especially, when the offence involved is one of such a grave and serious nature. 

Accordingly, the High Court dismissed the petition and asked the ICAI to 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.