No Bar on Spouse Complaint, ICAI Must Examine Professional Misconduct; Says HC

The petitioner, Shekhar Sharma, approached the High Court challenging a communication dated 08.05.2023 issued by the Institute of Chartered Accountants of India (ICAI), whereby the Board of Discipline closed the complaint against a Chartered Accountant. The closure was based on the Board’s disagreement with the prima facie opinion of the Director (Discipline), who had earlier indicated possible misconduct.

The petitioner contended that the Board failed to provide any reasons while rejecting the Director’s findings and merely termed the dispute as a “family dispute.” It was argued that even if the matter had elements of a personal dispute, allegations relating to professional misconduct required proper examination. The respondents, on the other hand, opposed the petition by asserting absence of any professional relationship and alleging that the complaint was motivated by personal animosity.

Issue Raised: Whether the dismissal of a professional misconduct complaint by the ICAI Board of Discipline, on the ground that it arose from a family dispute and while disagreeing with the prima facie opinion of the Director (Discipline), is valid in law in the absence of recorded reasons.

HC Held: The Delhi High Court allowed the writ petition and set aside the impugned orders passed by the Board of Discipline. The Court noted that the Director’s prima facie opinion had recorded specific inconsistencies and possible misconduct, yet the Board rejected the same without assigning any reasons.

The Court held that such a non-speaking order cannot be sustained in law. Merely labeling the matter as a “family dispute” does not justify closure when allegations relate to violation of professional standards. It emphasized that there is no bar on entertaining complaints from a spouse if professional misconduct is alleged. Therefore, the matter was remanded back to the ICAI for fresh consideration. The Board was directed to decide the complaint afresh, after granting an opportunity of hearing and by passing a reasoned order.

Relevant Text:

5. It, however, be noted that there is no reason, whatsoever, assigned in the impugned order/communication. It only states that the complaint relates to a family dispute. The Board should have given clear reasons as to why the opinion given by the Director is not acceptable. There is no such prohibition to entertain a complaint at the instance of spouse, if it discloses professional misconduct. The complaint must have been taken to its logical conclusion by assigning appropriate reasons which has not been done in the instant case. The only reason that the complaint relates to a family dispute cannot be countenanced, when the allegations are made against the Chartered Accountant for violation of statutory norms.

To Read Full Judgment, Download PDF Given Below