Can A Chartered Accountant Be Barred From Practice Based On Criminal Antecedents?: Delhi High Court Admits Appeal

The Delhi High Court today admitted an appeal against a single judge order holding that a person, being a Chartered Accountant, when convicted for commission of an offence involving 'moral turpitude', shall be liable to be removed from membership of Institute of Chartered Accountants of India.

The Division Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla issued notice on the appeal and directed the Appellant to file complete records of the case within 4 weeks. It however refused to stay the single judge order, which had upheld the show cause notices issued by the ICAI to the petitioner under Section 8 of the Chartered Accountants Act, 1949, subsequent to his conviction by the High Court under Sections 354 and 506-II of the IPC.

The Court said,

"Appeal is admitted. Issue Notice. At this stage, we are not inclined to stay the operation of the impugned judgment. 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 made it clear that in all professions, including Advocates and Doctors, there are provisions for debarring in case of misconduct. Thus, the Respondent may proceed to consider the response filed by the Appellant to the show cause notices. However, the Court will interfere with the order passed by the Respondent in case the period of debarment does not seem reasonable.

The Court was hearing an appeal against the order passed by Justice Pratibha M Singh, recommending ICAI to create a framework wherein there is proper disclosure by candidates who apply to become Chartered Accountants, at the inception itself. The Judge had also said that there is a need for a continuing disclosure, may be on an annual basis for members to inform the ICAI if there are any criminal cases or conviction against them, so that the ICAI is not kept in the dark.

ICAI Need To Create Framework For Proper Disclosure Of Criminal Antecedents By CA Aspirants: Delhi High Court

The observation was made dealing with a plea filed by the Appellant herein, a qualified Chartered Accountant, enrolled with ICAI since 25th January 2008.

He was aggrieved by the show cause notice issued under Section 8 of the 1949 Act. He argued that from an interpretation of Section 8(v) of the Act, it is clear that 'moral turpitude' under the said section, would only include such offences which are committed in professional capacity, or have a nexus with the profession, and not otherwise.

Section 8(5) provides: 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 without India, of an offence involving moral turpitude and punishable with transportation or imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing, removed the disability.

In appeal, his counsel, Advocate Hardik Sharma argued, "All men are born good. Criminal offence committed by an individual is a curable defect. The whole idea of criminal justice system is to restore the convict back into the society after they serve their sentence. What is the point of releasing them if they'll be debarred from undertaking the profession? Will they serve as drivers and labourers?"

He added that such a bar based on criminal antecedents was not prescribed when the Petitioner joined the profession. "Then how can there be subsequent bar?"

While issuing notice, the Court said,

"If they pass an order, say barring you, you can come to this court. Because it also offends our sensibilities also. How can they bar permanently? Even Parliamentarians are barred only for 6 years."

Case Title: Mohit Bansal v. ICAI