Delhi High Court directs ICAI to frame a policy on criminal cases

Delhi High Court directs ICAI to frame a policy on criminal cases

The profession of the chartered accountant requires a high standard of integrity and is considered noble

The Delhi High Court has directed the Institute of Chartered Accountants of India (ICAI) to frame a policy that mandates chartered accountants (CAs) to disclose criminal cases against them.

Suggesting that such a policy was necessary, Justice Pratibha M Singh told ICAI not to stay in the dark about criminal proceedings against registered members. The mechanism of the policy would lead to the CAs revealing such cases or convictions against them on a periodic basis.

The court was dealing with a petition filed by a CA, Mohit Bansal, challenging the show-cause notice issued to him under a section of the Chartered Accountants Act regarding his conviction for assaulting a woman in 2001. The section dealt with offences involving 'moral turpitude' and stipulated that if a person was convicted, his name could be barred from the ICAI register.

It was argued that though he was first convicted of gang rape, in 2010, the high court had reduced it to assault.

However, this fact was kept hidden from the ICAI. The CA continued his practice for over a decade until a show-cause notice was issued to him in 2018.

Justice Singh held that certain professions and services required a high standard of integrity and were considered 'noble'. The CA fell in that category.

The court, therefore, upheld the show-cause notice, observing, "The petitioner practiced for almost 12 years by the time the notice was issued by the ICAI. Ideally, ICAI ought to have had adequate checks at the time of the registration. However, the fact that the conviction of the petitioner may have not come to its attention for over 10 years, does not in any manner, bar ICAI from taking action, especially, when the offense involved is of a grave and serious nature."

Justice Singh added that although a bare reading of a sub-section of the Act suggested that the Central government would have the power to remove the disability even in offence of 'moral turpitude', in the opinion of the court such powers would be contrary to the statute as well as settled judicial precedents. A person could continue on the register of the ICAI only if he was granted a pardon.

Senior advocate Ramji Srinivasan, along with advocates Pooja Saigal, Simrat S Pasay, Chaitanya Pandey, Farman Ali and Athar Raza Farooquei appeared for the respondents.