Whether membership of a CA/CS can be revoked if it is discovered that he/she was convicted of an offence under IPC during his/her student days?
Shubham Budhiraja[1]
Shubhambudhiraja02@gmail.com
, 9654055315
Mr. A when he was a student
of ICAI and during his days of CPT, he was booked under Section 376(2) (g),
Section 354 & Section 506-II of IPC, However, post his membership as CA, he
was convicted under those sections but the HC modified the conviction to 7
months only. Thereafter ICAI issued show cause notice to Mr. A to disqualify
him to practice as CA because of his conviction as moral turpitude. Mr. A
challenged the show cause notice before Hon’ble High Court on ground that (i)
conviction date back to his days of student journey and therefore same cannot
be dragged today because conviction was not made in professional capacity, (ii)
The show cause notice is driven by malafide because Mr. A wife who is also CA
is contesting for ICAI central council elections. The HC refused both
contentions of Mr. A and hold the show cause valid for following reasons[2]:
(I)
The profession of Chartered Accountancy is
regulated by the Chartered Accountants Act, 1949. The Regulatory Board is the
Institute of Chartered Accountants of India (‘ICAI’), which maintains the
Register of Chartered Accountants. As per Section 5 of the Act, there are two
categories of members of the Institute - Associates and Fellows. The ICAI
conducts examinations which have to be cleared for a person to be recognized as
a CA. The ICAI also issues a certificate of practice to such persons who
qualify the said exam. Unless and until a person obtains a certificate of
practice, he or she cannot practice the profession of Chartered Accountancy in
India.
(II)
There are three categories of disabilities that are contemplated under Sections 8 (v) and 8
(vi), when read together: (i) Conviction for an offence involving ‘moral
turpitude’; (ii) Conviction for an offence committed in professional capacity
which is not technical in nature; (iii) Person held guilty of ‘professional’ or
‘other misconduct’ post an inquiry by the Disciplinary Committee, as per
Section 21 of the Act. If any of the disabilities as discussed above 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.
(III)
a. There are, broadly, two categories of misconduct contemplated under the Act – ‘professional
misconduct’ and ‘other misconduct’. These two types of misconduct are covered
under Section 8 (vi) read with Section 22 and the Schedules to the Act. b.
However, a conviction for an offence involving ‘moral turpitude’ punishable
with imprisonment- is a third and higher class of offence under Section 8(v) of
the Act and is stipulated as a separate class of disabilities which bars a person’s name from being entered or
borne in/continued in the register of the ICAI. This is a graver offence, in
terms of the scheme of the Act, juxtaposed to what is contemplated under the
third part of the Second Schedule or the fourth part of the First Schedule to
the Act. c. In the case of an offence involving ‘moral turpitude’, for which no
pardon has been granted, by a strict interpretation of the Act, the matter need
not even be referred to the Board of Discipline or to the Disciplinary
Committee for an inquiry. In such cases dealing with conviction for offences
involving ‘moral turpitude’ covered
under Section 8(v) the same would straight away fall within the jurisdiction of
the ICAI Council, and even an inquiry, as contemplated in Section 21, would not
be strictly required. The ICAI Council, may however, for the purposes of complying
with the Principles of Natural Justice, and for the purposes of fairness, still
decide to provide a hearing to the person concerned. d. A
reading of Sections 20, 21 & 22 would show that the discretion vested in
the Council and the Director (Discipline) are vast. Inquiry can be conducted in
respect of professional or other misconduct as also under any other
circumstances. e. In the case of offences under Section 8(vi) read with Section
22 and the Schedules, the ICAI is the final authority empowered to accept the
recommendation of the Board of Discipline, in the case of misconduct specified
in the First Schedule, and of the Disciplinary Committee in cases of misconduct
specified in the Second Schedule, or a combination of both the Schedules. f. It
is further clear that if a person has been convicted for an offence involving
‘moral turpitude’, such a person’s name cannot be entered into the register or
cannot continue in the register, and has to be removed from the register,
unless a pardon in respect thereof is granted. g. Although, from a bare reading
of sub-section 8(v), it may appear that the Central Government would have the
power to remove the disability even in offences involving ‘moral turpitude’, in
the opinion of this Court, in case of an offence or a conviction involving ‘moral
turpitude’, such power being vested with the Central Government would be
contrary to the spirit of the statute as
also contrary to the settled judicial precedents, to the effect that `moral
turpitude’ would be a complete disqualification. The use of the expression “entered in”
contained in Section 8, also shows that offences committed prior to the person
qualifying as a CA are also within the purview of the disabilities mentioned
under Section 8 of the Act. The only condition, upon which a person convicted
can be entered into or can continue on the register of ICAI, would be if the
person has been granted a pardon.
(IV)
The offences involving moral turpitude included the following: “11. Annexure A to the above
policy which refers to offences involving moral turpitude is extracted below:
“1. Criminal Conspiracy (Section 120-B, Indian Penal Code) 2. Offences against
the State (Sections 121, 130, Indian Penal Code) 3. Offences relating to Army,
Navy and Air Force (Sections 131-134, Indian Penal Code) 4. Offence against
Public Tranquility (Section 153-A & 153-B, Indian Penal Code). 5. False
evidence and offences against Public Justice (Sections 193-216A, Indian Penal
Code) 6. Offences relating to coin and government stamps (Section 231-263A,
Indian Penal Code). 7. Offences relating to Religion (Section 29 297, Indian
Penal Code) 8. Offences affecting Human Body (Sections 302-304, 304B, 305-308,
311-317, 325- W.P.(C) 6819/2020 Page 48 of 88 333, 335, 347, 348, 354, 363-373,
376- 376-A, 376-B, 376-C, 376-D, 377, Indian Penal Code) Offences against
Property (Section 379- 462, Indian Penal Code) 10. Offences relating to
Documents and Property Marks (Section 465-489, Indian Penal Code) 11. Offences
relating to Marriage and Dowry Prohibition Act (Section 498-A, Indian Penal
Code)
(V)
It is surprising to note that the institute- ICAI in India
does not have any checks at the entry level and disclosure requirements, specifically asking an
applicant as to whether there is any criminal case/FIR instituted against the
said applicant or whether he has been convicted in the past for any offence.
The said disclosure ought to be sought at the initial stage itself, i.e., when
the person signs up to take the first examination as a chartered accountant and
at the stage of registration, so that the person is conscious of the
disqualification which could apply qua him and bar such person from practicing
as a CA. There
also appears to be no continuing disclosure requirement from members.
(VI)
The Petitioner, in this case, having been convicted for
offences under Section 354 and 506-II of IPC, is clearly attracted by the
disability under Section 8(v) of
the Act. He has already practiced for almost 12 years by the time the notice
was issued by ICAI. 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. 119. The ICAI is well
within its power under Section 15(2)(p) of the Act to issue the show cause
notice and the notice of hearing which is under challenge. During the course of
hearing in this petition, the Petitioner was given an option of appearing
before the ICAI in pursuance of the notice for hearing, and thereafter for
challenging any final order that may be passed by ICAI. However, the response
of the Petitioner was that the legal issue involving interpretation of Section
8 would have a bearing on the enquiry, and hence he insisted on pressing the
present petition. It is, accordingly, held that in the case of offences involving ‘moral
turpitude’ under Section 8(v) and persons who may have been convicted of such
offences and sentenced for imprisonment, the disability would be squarely
attracted.
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