Can Chartered Accountant Be Barred From Practice Based On Historical Criminal Records?: Delhi HC Admits Appeal

Can Chartered Accountant Be Barred From Practice Based On Historical Criminal Record?: Delhi HC Admits Appeal The Delhi High Court today admitted an appeal against a single judge order holding that a Chartered Accountant who is convicted of an offence involving 'moral turpitude' is liable to be expelled from the Institute of Chartered Accountants of India. The Petitioner is a qualified Chartered Accountant (hereinafter “CA”), enrolled with the Institute of Chartered Accountants of India (hereinafter, “ICAI”) since 25th January 2008. 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 Petitioner's Submissions was that 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 a 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. Petitioner Filed the writ petition seeking quashing of the show cause notice and the proceedings emanating therefrom. The writ petition seeking quashing of the show cause notice and the proceedings emanating therefrom is, was, dismissed on Jan 21, 2022 by Justice PRATHIBA M. SINGH. Acting Chief Justice Vipin Sanghi and Justice Navin Chawla, sitting as a Division Bench, gave notice of the appeal and ordered the Appellant to file comprehensive records of the matter within four weeks. It refused, however, to stay a single judge's judgment upholding the ICAI's show-cause notices issued to the petitioner under Section 8 of the Chartered Accountants Act, 1949, following his conviction by the High Court under Sections 354 and 506-II of the IPC. According to the Court,

“Appeal is admitted. At this stage, we are not willing to stay in the operation of the impugned judgment. The respondent may undertake proceedings in respect of the show cause notice issued by them. Appellant shall have the liberty to move an application once an order on show cause is passed,” 

The Court stated that all professions, including lawyers and doctors, have mechanisms for debarment in the event of misconduct. As a result, the Respondent may evaluate the Appellant's response to the show cause notices. However, if the duration of debarment does not appear to be reasonable, the Court will overturn the Respondent's order. Hearing an appeal against Justice Pratibha M Singh's order dated Jan 21 proposing that the ICAI adopt a structure in which candidates who want to become Chartered Accountants make full disclosure from the start. The Judge also stated that 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 observation was made in response to a plea filed by the Appellant herein, a qualified Chartered Accountant who has been a member of the Institute of Chartered Accountants of India (ICAI) since January 25, 2008. Chartered Accountant contended that an interpretation of Provision 8(v) of the Act shows that the term "moral turpitude" under that section exclusively refers to crimes committed in a professional capacity or with a professional tie, and not otherwise. Section 8(5) provides that a person shall not be entitled to have his name entered in or borne on the Register if he has been convicted by a competent Court, whether within or outside India, of an offence involving moral turpitude punishable with transportation or imprisonment, or of an offence, not of a technical nature, committed by him in his professional capacity, unless he has either been granted a pardon or, on an application made by him, he has been granted a pardon. Delhi High Court Admitted the Appeal of the Chartered Accountant in this case.