Chartered Accountant Misconduct: Supreme Court’s Ruling on Professional Ethics
The Supreme Court of India recently delivered a significant judgment concerning the professional conduct of Chartered Accountants. The case involved the Council of the Institute of Chartered Accountants of India (ICAI) and a Chartered Accountant, Gurvinder Singh, accused of professional misconduct.
Background of the Case
The case arose from a complaint dated March 16, 2005, against Gurvinder Singh, a Chartered Accountant, related to the sale of 100 shares in 1999. The shares were transferred to the Chartered Accountant’s own name, leading to allegations of misconduct. Despite a settlement between the complainant and the Chartered Accountant, the Disciplinary Committee of ICAI pursued the matter and found him guilty of ‘Other Misconduct’ under Section 22 read with Section 21 of the Chartered Accountants Act, 1949.
Findings of the Disciplinary Committee
The Disciplinary Committee determined that the conduct of the Chartered Accountant was highly unbecoming of a professional and brought disrepute to the profession. As a result, ICAI recommended his removal from the rolls for six months.
High Court’s Decision
The matter was presented before the High Court, which ruled that since the accused was acting in his personal capacity in the share transactions and not as a Chartered Accountant, the misconduct did not relate to his professional duties. The High Court thus declined to impose any penalty.
Supreme Court’s Ruling
The Supreme Court overturned the High Court’s judgment, emphasizing the importance of professional ethics. The Court clarified that under Schedule I Part-IV of the Chartered Accountants Act, even personal actions could be considered misconduct if they brought disrepute to the profession.
Key Observations from the Judgment:
- The Disciplinary Committee has the authority to determine misconduct even if it is unrelated to professional work.
- Professional misconduct includes actions that tarnish the reputation of the profession.
- The High Court failed to appreciate the broader definition of misconduct under the Chartered Accountants Act.
- The matter was remanded to the High Court for reconsideration.
Conclusion
The judgment reiterates the high ethical standards expected from professionals, particularly Chartered Accountants. It affirms that even actions taken in a personal capacity can have professional repercussions if they bring disrepute to the profession.
Petitioner Name: Council of the Institute of Chartered Accountants of India.Respondent Name: Shri Gurvinder Singh & Anr..Judgment By: Justice Rohinton Fali Nariman, Justice Navin Sinha.Place Of Incident: India.Judgment Date: 16-11-2018.
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Download Judgment: Council of the Insti vs Shri Gurvinder Singh Supreme Court of India Judgment Dated 16-11-2018.pdf
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