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Professional Conduct & EthicsSupreme Court of India

Council of the Institute of Chartered Accountants of India v. Shri Gurvinder Singh

Civil Appeal · 2018 INSC 1071Decided 16 Nov 2018
Civil Appeal No. 11034 of 2018
Justice Rohinton Fali Nariman · Justice Navin Sinha

Background

A chartered accountant, Gurvinder Singh, was the subject of a 2005 complaint over the sale of 100 shares that had been transferred into his own name. Even though the complainant and the accountant later settled the matter privately, the Institute's Disciplinary Committee went ahead and found him guilty of "Other Misconduct" and recommended his removal from the rolls for six months. The Madras High Court, however, held that since he was acting in a purely personal/commercial capacity and not as a chartered accountant, no professional misconduct arose, and it imposed no penalty.

Decision Breakdown

The Supreme Court held that the High Court had misread Section 21(3) of the Chartered Accountants Act, 1949 and Schedule I, Part IV. Under that Schedule, a member can be held guilty of "other misconduct" even for conduct unrelated to his professional work, if the Council opines that it brings disrepute to the profession. Since the Disciplinary Committee was entitled on the facts to find disrepute even though the accountant was not acting in his professional capacity, the High Court's reasoning was incorrect. The Court set aside the High Court's judgment and remanded the matter back to the High Court to be decided afresh, leaving all contentions open to both sides.

Lesson Learnt

Professional misconduct for a chartered accountant (or similarly regulated professional) is not limited to acts performed while actually practising the profession: personal conduct that brings disrepute to the profession can also attract disciplinary action.

Council of the Institute of Chartered Accountants of India v. Shri Gurvinder Singh – Legal Case Shots | LegalAware