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Home / Latest News / High Court: Board of Discipline of ICAI empowered to examine conduct unrelated to professional work; Read Judgement

High Court: Board of Discipline of ICAI empowered to examine conduct unrelated to professional work; Read Judgement

February 12, 2019:

On Monday, the Delhi High Court has held that Board of Discipline of the Institute of Chartered Accountants of India (ICAI) has power under the Chartered Accountants Act, 1949 to examine any conduct that would tend to bring disrepute to the profession or the Institute, whether or not related to professional work.

ICAI
ICAI

Therefore, if a Chartered Accountant is found to have been guilty of outraging the modesty of a woman and/or other offences involving moral turpitude, it would not be in apposite for the Board of Discipline to conclude that the conduct lowered the dignity of the profession in terms of Clause (2) of Part-IV of the First Schedule to the Act, it said.

The judgment was passed a Single Judge Bench of Justice Vibhu Bakhru in a petition preferred by a practicing Chartered Account assailing the decision of the Board in a sexual harassment allegation against him.

The proceedings before the ICAI were commenced pursuant to a complaint against the Petitioner which alleged that he had outraged the modesty of a girl and also committed certain offences punishable under the Indian Penal Code, 1860.

As per the complainant, the first incident of harassment took place in 2004 when the Petitioner as well as the victim were in school. After a complaint was also lodged, the Petitioner undertook to never go to the street on which the victim lived or speak to her or obstruct her while she was on her way.

In spite of the undertaking, the Petitioner then resorted to stalking the victim and even distributed pamphlets on which her photographs were printed in a derogatory manner. Subsequently, an FIR in this regard was registered in 2013.

The Petitioner nonetheless continued to harass the victim. One day he followed her in his car and attempted to drag her inside the car. He then threatened to defame her and also throw acid on her. He also threw a letter on her face expressing his love for her, which she found to be offensive. After the incident, another FIR was also registered against him.

Subsequently, a chargesheet was filed by the Police, accusing the Petitioner of offences under Sections 341/354/354B/354D/366/511/506 IPC. Charges under Section 366 IPC were subsequently quashed and the petitioner was also released on bail.

Meanwhile, the Complainant also lodged a complaint with ICAI for initiating disciplinary proceedings against him.

The Director (Discipline), ICAI, in his prima facie opinion, concluded that since the allegations against the Petitioner related to his interpersonal relationships, it would be appropriate for the Complainant to seek redressal before another forum.

The Board, on the other hand, disagreed with the opinion. It recorded that the charges alleged against the Petitioner were grave and clearly brought disrepute to the profession of Chartered Accountancy. It thus decided to proceed further under chapter IV of these Rules.

Aggrieved by the decision, the Petitioner moved the High Court.

Before the Court, Petitioner argued that the allegations made against him had no bearing with him carrying on the profession as a Chartered Accountant and, therefore, the Board and/or ICAI would have no jurisdiction to entertain a complaint in this regard in terms of Clause (2) of Part-IV of the First Schedule to the Act.

Rejecting the submission, the Court held that Clause (2) of Part-IV of the First Schedule to the Act was wide, and would include within its scope, any conduct that would tend to bring disrepute to the profession or the Institute.

It added that although the Board of Discipline has no jurisdiction to sentence the Petitioner with respect to the allegations against him, it would be erroneous to contend that the Board does not have the jurisdiction to examine the allegations to determine whether he was guilty of other misconduct as defined under Part-IV of the Schedule-I to the Act.

To Read Judgement, Click here.

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