The Delhi High Court has directed the Institute of Chartered Accountants of India (ICAI) to create a framework where there is proper disclosure by candidates who apply to become CA at Inception.
The Petitioner, Mohit Bansal, is a qualified Chartered Accountant enrolled with the Respondent, Institute of Chartered Accountants of India 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 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.
The FIR was lodged against the Petitioner for offences punishable under Sections 365/376/342/354/34 of the IPC. At that time, the Petitioner had cleared his CA Foundation and had received the certificate in respect thereof on 12th July 2001. Post the FIR having been registered against the Petitioner, investigation was conducted, and after the completion of investigation, charges under Section 366 IPC, Section 376(2)(g) IPC and Section 506-II IPC, were framed against him. In the meantime, he had appeared in the next level of examinations and qualified as a Chartered Accountant. He was enrolled on 25th January 2008.
The single bench of Justice Pratibha M.Singh has issued the directions to ICAI wherein it stated that as is evident from the facts of the present case, the Petitioner, despite a criminal case being pending at the time of his enrolment as a Chartered Account and thereafter his conviction, was enrolled and was permitted to practice as a CA.
“This Court has not been shown any policy or disclosure requirements that are asked for from candidates or CAs either at inception or thereafter. 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 / convictions etc., against them, so that the ICAI is not kept in the dark. The power, discretion and duty of ensuring the purity of the Register of Members is upon the ICAI. Thus, in the case of convictions, the factum of the said conviction and the offences which the applicant was convicted ought to be disclosed,” the court said.
“In the case of an FIR or a Criminal Complaint having been filed, there ought to be an obligation upon the applicant to keep the ICAI informed and updated, as to the progress in the said Complaint/Case. ICAI shall accordingly frame a policy and a mechanism, if not already in existence, for disclosure by members both at the inception as also on a periodic basis thereafter, of any criminal cases or convictions so that the spirit and intent of the statute is given effect to and the ICAI is not in the dark about the same until it is notified by some information or complaint,” the court added.
MOHIT BANSAL vs INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA & ANR.
CITATION: 2022 TAXSCAN (HC) 168
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