Deep Singh vs The Institute Of Cost Accountants ...
2017 Latest Caselaw 1058 Del

                     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                             Judgment reserved on: February 16, 2017
                                            Judgment delivered on: February 27, 2017

+       W.P.(C) 6772/2014
        DEEP SINGH                                                              .... Petitioner
                                      Through:     Mr. Puneet Singh Bindra & Ms. Sonal Alagh,
                                                   Advs.

                                Versus

        THE INSTITUTE OF COST ACCOUNTANTS OF INDIA         ..... Respondent
                           Through: Mr. G.S. Chaturvedi & Mr. R. Madhav, Advs.



CORAM:
HON'BLE MR JUSTICE V. KAMESWAR RAO

                                           JUDGMENT

V. KAMESWAR RAO, J

1. The present petition has been filed by the petitioner with the following prayers:-

"Therefore, in the facts and circumstances, it is humbly prayed before this Hon'ble Court that this Hon'ble Court may graciously be pleased to: "a) Pass a writ of mandamus, or a writ, order or direction in the nature of mandamus declaring the petitioner entitled for exemption from appearance in the business valuation paper for final CMA exam conducted in June, 2014 by the Respondent (the institute);

b) Pass a writ of mandamus, or a writ, order or direction in the nature of mandamus directing the Respondent (the Institute) to declare the petitioner as a successful candidate in the final CMA exam conducted in June, 2014;

c) Pass any other and such order(s) that this Hon'ble Tribunal may deem fit in the interest of justice."

2. It is the case of the petitioner and also contended by Mr. Puneet Singh Bindra,

learned counsel for the petitioner that in 2010, after completing the intermediate stage of

Cost & Management Accountancy (for short „CMA‟) Course, the petitioner registered with

the respondent No.2 as a final year student of the CMA Course under old syllabus of 2008,

and was allotted a registration number. In the month of December of 2011, the petitioner

appeared in the final year examination conducted by the Institute and scored more than 60%

marks in the Business Valuation paper of Group IV but could not clear the other papers in

the same group being; (i) Management Accounting & Enterprise Performance Management,

(2) Advance Financial Accounting and Reporting; (3) Cost Audit and Operational Audit.

3. According to Mr. Bindra, as per Regulation 41(2) of the ICAI Regulations of the

Institute, the petitioner was granted an exemption from appearing in the Business Valuation

paper in the subsequent exams/attempts. The said Regulation grants exemption to those

students, who score more than 60% marks in a given paper from appearing in that paper

again in their subsequent attempts. According to him, grant of this exemption to the

petitioner was also recorded on the mark sheet, issued to him. He states, in view of the

aforesaid Regulation the petitioner is entitled to the privilege of exemption for an unlimited

time. He states, in May, 2012 an Amendment was carried out by the Institute in the

Regulation 41(2) vide Cost and Works Accountants (Amendment) Regulations, 2012.

4. In the month of June, 2013 the petitioner once again appeared in the final year

examination and availed the exemption from appearance from Business Valuation paper,

which was granted by the Institute. In December, 2013 attempt of the final CMA

examination, the petitioner was again allowed to avail the exemption from appearing in

Business Valuation paper. In June, 2014 the petitioner again appeared in the final CMA

examination conducted by the Institute after paying necessary fee. The result of the exam

was published by the Institute on August 23, 2014. According to Mr. Bindra, the Institute

arbitrarily and malafidely revoked the exemption granted to the petitioner from appearing in

Business Valuation paper in his subsequent attempts when he wrote the final CMA exam in

June, 2014 and marked him "absent" in the said paper.

5. It is his case that on August 24, 2014, the petitioner called the Examination

Department over phone and was informed that as per the amended Regulation 41(2), each

student was allowed to take benefit of exemption from appearance in an examination passed

by him earlier for three consecutive terms alone and not thereafter. He refers to the

representations made by the petitioner on August 26, 2014, August 27, 2014 and August 28,

2014. He states that the petitioner was in receipt of e-mail dated August 29, 2014 from the

respondent Institute wherein the petitioner was informed that the result as shown on the

Institute‟s website was a correct one. He states that the petitioner vide his e-mail dated

September 1, 2014 made an attempt to explain to the Institute that May, 2012 Amendment

was not applicable to his case as the words used in the amendment are for a candidate who

was not declared successful in a "Stage" or "Group". He would also draw my attention to

e-mail dated September 1, 2014 of the respondent informing the petitioner that the

notification of 2012 Amendment applicable to both the syllabi of 2008 and also of 2012. It

is his case that the final stand of the respondent is that the Amendment shall also be

applicable in the case of the petitioner. He seeks, the reliefs prayed for in the petition.

6. On the other hand, Mr. G.S. Chaturvedi, learned counsel for the respondent would

submit that the ICAI is a specialized statutory body and has full power and discretion to

make Rules for better management of the affairs and functions of the Council. One such

function is to ensure that the standard of students and the quality of candidates in at par with

international standards. The legislature has empowered the Respondent with discretionary

powers to make rules and implement them in order to achieve its objectives. In particular,

Regulation 35(3) empowers the council to provide guidelines viz exemption. Further, to

ensure a smooth transition after the amendments, Regulation 41(3A) empowers the

Respondent to effectuate and/or delay implementation of the Amendment. He would state,

that the petitioner, contrary to his pleadings, had full knowledge of the Amendment to

Regulation 41(2). In this regard, he would draw the attention of this Court to the terms and

conditions printed on the Admit Card as well as to the Frequently Asked Questions (FAQs).

The Admit card and the FAQs clearly and unambiguously mention the Amendment as well

as the consequences thereof. In fact, the prospectus for the examination contained the rules

of the Amendment which was duly signed, consented to and acknowledged by the

Petitioner. Therefore, the averment of the petitioner that the respondent did not put him to

notice of the Amendment is wholly misconceived, frivolous and false. It is his submission

that the Rules of the Amendment were made uniformly applicable to all candidates

including the ones appearing with the Petitioner. The petitioner did not challenge the

Amendment in 2012 and waited to exhaust all his chances to appear in the exam before

challenging the Amendment. This clearly demonstrates that the petitioner took advantage

of the Amendment and thereafter, on being unsuccessful in clearing the examination, has

assailed the Amendment at this belated stage. He would state that the respondent institute

has international recognition and students passed out as Cost Accountants from the

respondent Institute have a pan global recognition. As such, the respondent Institute has to

maintain a high standard as per international norms. He submitted that with the fast

changes taking place globally including the mode, manner and content of the subjects of the

cost accountancy, the respondent decided to carry out the amendment, wherein the

exemption granted in a subject was limited to three consecutive terms.

7. It is his submission that the respondent has been formed under an Act of Parliament

namely Cost & Works Accountants Act, 1959. As per the Scheme of the Act, in terms of

section 9, a Council of the Respondent Institute has been constituted for the management of

the affairs and for discharging the functions assigned to it. The institute has to work under

the overall control, guidance and supervision of the Council and has duty of carrying out the

provisions of this Act as per Section 15. The functions of the Institute include the

examination of candidates for enrolment as per Section 15A. Apart from other Committees,

an Examination Committee has been constituted in terms of Section 17. He states, as per

section 39, the Council is empowered by Notification in the Gazette of India to make

regulation for the purpose of carrying out the objects of the Act, which includes the

standard and conduct of examinations. It is submitted that the amendment carried out in

Regulation 41(2) is for the purpose of maintaining the standard of the examination in

consonance with recent developments. As such, there cannot be any challenge in respect of

power to amend the Regulation, which is derived by the respondent from the Act itself. The

provisions of Act and Regulation have not been challenged in the present petition.

8. He had further submitted that the contention of the petitioner that the amendment is

being given retrospective effect is also incorrect since the number of chances, given earlier

before coming into force of the amendment on May 25, 2012, has not been taken into

account. Admittedly, the petitioner has been given exemption in the examination of

December 2011 earlier (Zero Year-which was not counted for calculating three chances),

apart from three exemptions in December, 2012, June, 2013 and December, 2013.

Additionally, the amendment was not applied for the term of June, 2012 since the call

letters for the examination in the said term had already been dispatched to 62,670 students

and applying of the amendment immediately would have created chaos. The petitioner in

his rejoinder has made out a grievance as to why the said amendment was not given effect

in the term of June, 2012. It is submitted that even if, an additional chance has been given

to the petitioner as also to all other students, the same cannot be cause for grievance of the

petitioner. It is his submission that in terms of Regulation 35, the Council is fully

empowered to decide about granting exemption. In view of this, the Council had decided to

grant exemption to all the students in the said term in the overall interest of all the students,

who were already issued the admit card before coming into force of the Notification and all

other pre-examination work was completed.

9. In so far as the submission of the petitioner that he was not informed about the

limiting of the exemptions, he would state that Gazette Notification is the notice to the

Public. Even otherwise, as per page 162 of the paper book filed by the petitioner himself, it

has been categorically mentioned about limiting of the exemption to the three consecutive

terms under the heading „the exemption and carry forward of the marks‟. The

representations of the petitioner have also been replied as is obvious from pages 175 and

183 of the paper book. It is his submission that an examinee needs to be vigilant about the

terms and conditions. Towards that, a declaration is contained in the examination form

itself. Besides, in Frequently Asked Questions (FAQs) of the respondent, available on the

website, the said rule has been categorically mentioned in reply to Question No.11 (page 29

of the counter affidavit). As such, the contention of the petitioner to this effect is

unsustainable. The petitioner has tried to take advantage of the Hindi version of the said

amendment, which is not sustainable under clear provisions in Article 348 (1)(b) of

Constitution of India. Moreover, the petitioner did not challenge the amendment of 2012

and without challenging the amendment he appeared in the examination for four times

without any protest and failed. After being unsuccessful he challenged the Rules thereby

filing the writ petition before this Court stating that the amendment was wrong. He states it

is well settled principle of law that the petitioner after taking part in the examination now

cannot turn back to state that the amendment was wrong and without jurisdiction in view of

the judgments of the Supreme Court reported in (2011) 1 SCC 150 Vijendra Kumar

Verma vs. Public Service Commission, Uttarakhand & ors. and (1976) 3 SCC 585

Dr.G.Sarana vs. University of Lucknow & ors.

10. He further state that there had been 1837 students, who had been affected due to the

amendment, out of which, 1836 took part in the examination of December, 2014 and June,

2015 examinations. Out of this, 350 students have already passed examination since June,

2014. The petitioner had also applied for December, 2014 examination on October 07,

2014 including the very same paper for which exemption was withdrawn as per the

amendment and obtained the admit card. However, he did not appear in the examination.

There would have been 150 students, who would have passed had exemption continued in

June, 2014. However, none, except the petitioner, has challenged the carrying out of the

amendment. They had appeared in the subsequent examination of December, 2014 and 111

out of 150 passed the same. As such, no special treatment could be given to the petitioner,

different from other students. He would rely upon the following judgments in support of

his contention:-

(i) (2009) 11 SCC 726 All India Council for Technical Education vs. Surinder Kumar Dhawan & Ors.;

(ii) (2015) 8 SCC 129 P. Suseela & Ors. vs. University Grants Commission & Ors.;

(iii) 2013 SCC OnLine Guj 92 Bimal Patel, Director & Anr. Vs. Pushkar Santosh Kumar Mehrotra & ors.

Lastly, he seeks the dismissal of the present writ petition.

11. Having considered the submissions made by the learned counsel for the parties, the

only question, which arises for consideration is whether the Amendment as effected by the

respondent to Regulation 41(2) whereby the respondent has limited the benefit of

exemption granted with regard to the subject where a candidate has secured 60% marks for

three consecutive terms immediately, would not be applicable to the petitioner, as, in his

case it would be the unlimited attempts, as contended by the learned counsel for the

petitioner. Before I answer the issue, it is important to reproduce the pre-amended and the

amended provisions:

Pre-amended Regulation:

"(2) A candidates who is not declared successful in a Stage or Group under the old syllabus of any examination but -

(i) obtains 60 per cent or more of the total marks in any paper or papers shall be exempted in subsequent examinations from that or those papers in which he secured 60 percent or more marks; or

(ii) obtains 60 per cent or more of the total marks in any paper and a minimum of 40 percent of the total marks (under the revised syllabus) or 35 per cent of the total marks (under the old syllabus) in each of the remaining papers of that Stage or Group ( under the old syllabus), shall be allowed the benefit of carry forward of the actual marks so obtained by him in the papers in which he had obtained 60 per cent, or more marks for the purpose of computing his result in the subsequent examinations:

PROVIDED that if the benefit of exemption or carry forward mentioned in clauses (i) and (ii) above is voluntarily withdrawn by a candidate, he shall not be entitled to such benefit in his future attempts."

Amended Regulation:-

"(2) A candidate who is not declared successful in a Stage or Group under the old syllabus of any examination but who has appeared in all the papers of that stage or group-

(i) obtains 60 per cent or more of the total marks in any paper or papers shall be exempted in subsequent examinations from that or those papers in which he secured 60 per cent or more marks; or

(ii) obtains 60 per cent or more of the total marks in

any paper and a minimum of 40 per cent of the total marks (under the revised syllabus) or 35 per cent of the total marks (under the old syllabus) in each of the remaining papers of the Stage or Group (under the old syllabus), shall be allowed the benefit of carry forward of the actual marks so obtained by him in the papers in which he had obtained 60 per cent, or more marks for the purpose of computing his result in the subsequent examinations:

Provided that he shall not be entitled to the benefit of exemption or carry forward mentioned in clause (i) and clause (ii) above if he has appeared for the paper in which he has the benefit of exemption or carry forward that he shall not be entitled to the benefit of exemption or carry

Provided further that the candidate shall not be entitled to the benefit of exemption or carry forward on and from the examination in which he appears for the same papers or as the case may be the exemption in which he appears after the withdrawal of the exemption or carry forward

Provided also that any benefit of exemption or carry forward shall be available to a student for three consecutive terms immediately succeeding the term in which such exemption or carry forward has accrued."

On a specific query to the learned counsel for the petitioner whether the petitioner is

challenging the power of the respondent to amend the Regulations; the answer was in the

negative. If that be so, the issue needs to be proceeded on a premise that power exist with

the respondent to amend the Regulations.

12. The plea that the Amendment is being given a retrospective effect, is a fallacy. I

agree with the submission of Mr. G.S. Chaturvedi that Amendment was notified on May 25,

2012 and the number of chances given earlier before coming into effect of the Amendment,

have not been taken into account. The Amendment was not applied for the term of June,

2012. The three exemptions granted were for the exams of December 2012, June 2013 and

December 2013. The plea of the petitioner that Amendment was not given effect to the

examination of June, 2012 would not mean that the cases like that of the petitioner were not

covered under the Amendment. In fact, the stand of the respondent that Amendment was

not applied for the examination of June, 2012 as the call letters for the examination in the

said term had already been dispatched to 62,670 students and applying the Amendment

immediately would have created chaos, is appealing. That cannot be a cause for grievance

of the petitioner, rather, he was benefitted, because, the exam of June, 2012 was not counted

as an exemption.

13. Now the question, which arises is whether the petitioner has a right to avail the

benefit of exemption for unlimited terms. The answer has to be "No" for more than one

reason; (i) It is true that, the right of exemption has been incorporated in the Regulations. In

other words, the petitioner was enjoying the benefit of the exemption, even before the

impugned Amendment, in terms of the Regulations i.e. Regulation 41(2). In the absence of

any challenge to the power of the respondent to amend the Regulations, which power,

includes the power to limit the number of exemptions, the petitioner has no right to enjoy

the benefit of exemption in perpetuity. (ii) The Amendment brought, whereby the

exemption has been limited to three terms would still mean that the right of exemptions per

se has not been taken away but has been limited to three terms and the benefit thereof has

been given / availed by the petitioner. (iii) The objective being to improve the standard and

conduct of the examination, by limiting the exemption to three terms, which is the

subjective satisfaction of the concerned authority, no fault can be found with such a

stipulation in the Regulation.

14. That apart, the submission of Mr. Chaturvedi that the petitioner took advantage of the

amendment and after exhausting all the three exemptions, being unsuccessful in clearing the

examination has assailed the Amendment is appealing.

15. Further the action of the respondent to limit the exemptions for three consecutive

terms, i.e., December, 2012; June, 2013 and December, 2013, the same being consistent

with the amendment, the action of the respondent cannot be faulted. In this regard, I would

like to produce Para 23 and 24 of the Judgment of the Gujarat High Court in Bimal Patel

(supra) as under:-

"23. It is also settled law that a court an always take judicial notice of a valid law of the land. In the cases before us, there is no dispute that the Examination Rules of 2011 has been passed in exercise of the power of enactment by way of delegated legislation and once we find that there is no illegality in passing the said delegated legislation, we can also take note of the fact that by the said Rules which are part of Regulation framed under the Act, the earlier Rules

for examination have been superseded. Therefore, when the examinations in question were held for the purpose of being promoted to the next year, the examination Rules of 2011 were very much in existence and those Rules are the only Rules applicable to the examinations in question. Such being the position, we approve the action of the University on the ground that the same is consistent with the latest Rules enacted for that purpose.

24. As regards the allegations of giving preferential treatment to some of the students by declaring them "cleared" after they were detained, we find that the same is consistent with the Rules, and even the respondents before us also availed of such provision but could not become successful. Therefore, after availing of the opportunity given to them by the University but having failed, they now cannot complain that the said opportunity was wrongly given."

16. The other plea of the learned counsel for the petitioner that there is a difference in the

Hindi and English version of the amendment is concerned, the Hindi version reads as

under:-

Whereas the English version of the Amendment reads as under;-

"Provided also that any benefit of exemption or carry forward shall be available to a student for three consecutive terms immediately succeeding the term, in which such exemption or carry forward has accrued."

17. An apparent reading of the Hindi and English version of the regulation show they are

at variance, inasmuch as the Hindi version refers to the exemption being applicable to three

consecutive years, whereas the English version depicts, the same is applicable to three

consecutive terms.

18. In any case, the said plea would be of no help to the petitioner, inasmuch as it is not

the case of the petitioner that he is entitled to the benefit of exemption for a period of three

years and not three consecutive terms, hence it would not be necessary, to go into an issue

as to which version would prevail.

19. I do not see any merit in the petition. The same is dismissed.

V. KAMESWAR RAO, J FEBRUARY 27, 2017 ak