COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIAversusSHRI GURVINDER SINGH & ANR.

                        [2018] 14 S.C.R. 321                            321


       COUNCIL OF THE INSTITUTE OF CHARTERED                            A
               ACCOUNTANTS OF INDIA
                             v.
           SHRI GURVINDER SINGH & ANR.
              (Civil Appeal No. 11034 of 2018)
                                                                        B
                       NOVEMBER 16, 2018
          [R. F. NARIMAN AND NAVIN SINHA, JJ.]
      Chartered Accountants Act, 1949 : s.22 read with s.21,
Schedule I Part IV – Other misconduct – Complaint against
Chartered Accountant relating to sale of shares, transferred to the     C
Chartered Accountant’s own name – Disciplinary Committee found
his conduct derogatory in nature and held him guilty of ‘Other
Misconduct’ u/s. 22/21 – Recommendation made by the Council of
the Institute of Chartered Accountants to the High Court to remove
the Chartered Accountant for a period of six months from the rolls,     D
however, the High Court did not impose any penalty – Correctness
of – Held: High Court did not correctly appreciate s. 21(3) –
Disciplinary Committee found the Chartered Accountant guilty of a
practice which was not in the Chartered Accountant’s professional
capacity – Under Schedule I Part-IV sub clause(2), the Council          E
can hold Chartered Accountant guilty if their act brings disrepute
to the profession whether or not related to his professional work –
Thus, the order of the High Court is set aside and the matter
remanded to the High Court to be decided afresh.
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11034             F
of 2018.
      From the Judgment and Order dated 16.08.2016 of the High Court
of Delhi at New Delhi in Chat. A. Ref. No. 4.2012.
      Rana Mukherjee, Sr. Adv., Pramod Dayal, Nikunj Dayal, Ms. Payal
                                                                        G
Dayal, Advs. for the Appellant.
     Balaji Srinivasan, Ms. Pallavi Sengupta, Ms. Garima Jain,
Siddhanth Kohli, Ms. Lakshmi Rao, Advs. for the Respondents.

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                                321
322                SUPREME COURT REPORTS                      [2018] 14 S.C.R.


A           The Judgment of the Court was delivered by
            R. F. NARIMAN, J. 1. Leave granted.
             2. The present appeal arises out of a complaint dated 16.03.2005
      against Gurvinder Singh - Respondent No.1, who is a Chartered
      Accountant, relating to sale of 100 shares in 1999, which were transferred
B     to the Chartered Accountant’s own name.
             3. What has been pleaded before us is that the matter has
      ultimately been settled between the Complainant and the Chartered
      Accountant, despite which the Disciplinary Committee took up the case
      and ultimately found that the conduct of the Respondent No.1-Chartered
C     Accountant was derogatory in nature and highly unbecoming and held
      him guilty of ‘Other Misconduct’ under Section 22 read with Section 21
      of the Chartered Accountants Act, 1949 (hereinafter referred to as ‘the
      Act’).
             4. The Council of the Institute of Chartered Accountants of India,
D     therefore, made its recommendation to the High Court to remove the
      aforesaid Chartered Accountant for a period of six months from the
      rolls. The High Court, by the impugned judgment dated 16.08.2016,
      after setting out Sections 21 and 22 of the Act, arrived at the conclusion
      that:
E           “14. In the instant case the respondent was acting as an individual
            in his dealings with the complainant which were purely
            commercial. While selling the shares held by him the respondent
            was not acting as a Chartered Accountant. He was not discharging
            any function in relation to his practice as a Chartered Accountant.
F           15. The Reference is accordingly answered by declaring the law
            as above and not inflicting any penalty upon the respondent.”
            5. We are afraid that the High Court has not correctly appreciated
      Section 21(3) of the Chartered Accountants Act, 1949 which states as
      follows:-
G           “(3) Where the Director (Discipline) is of the opinion that a member
            is guilty of any professional or other misconduct mentioned in the
            First Schedule, he shall place the matter before the Board of
            Discipline and where the Director (Discipline) is of the opinion
            that a member is guilty of any professional or other misconduct
H           mentioned in the Second Schedule or in both the Schedules, he
            shall place the matter before the Disciplinary Committee.”
 COUNCIL OF THE ICAI v. SHRI GURVINDER SINGH & ANR.                               323
                 [R. F. NARIMAN, J.]

Schedule-I Part-IV reads as follows:-                                             A
        “Other Misconduct in Relation to Members of the Institute
        Generally
           A member of the Institute, whether in practice or not, shall be
        deemed to be guilty of other misconduct, if he-
                                                                                  B
        (1) is held guilty by any civil or criminal court for an offence
        which is punishable with imprisonment for a term not exceeding
        six months;
        (2) in the opinion of the Council, brings disrepute to the profession
        or the Institute as a result of his action whether or not related to      C
        his professional work.”
      6. The Disciplinary Committee has, on facts, found the Chartered
Accountant guilty of a practice which was not in the Chartered
Accountant’s professional capacity. This, it was entitled to do under
Schedule I Part-IV sub-clause(2) if, in the opinion of the Council, such          D
act brings disrepute to the profession whether or not related to his
professional work.
       7. This being the case, it is clear that the impugned judgment is
incorrect and must, therefore, be set aside. We thus remand the matter
to the High Court to be decided afresh leaving all contentions open to
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both parties.
        8. The appeal is disposed of accordingly.

Nidhi Jain                                                  Appeal disposed of.

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