They may lose their license if found guilty of misconduct even outside work.
The recent judicial diktat on how chartered accountants (CAs) must conduct themselves professionally and even outside their field of work is perhaps the beginning of the ‘cleaning up’ of white-collar professions in India.
Notably, a recent ruling by a two-judge Supreme Court (SC) bench, comprising Justice Rohinton Fali Nariman and Justice Navin Sinha held that behavioural ‘lapses’ even outside the professional field of work can attract disciplinary action. This implies that a chartered accountant, if by his conduct brings ‘disrepute’ to the profession — and this extends to any action even outside the scope of his profession, could attract exemplary punishment. It could mean being stripped off their professional licence and being effectively banned from work.
Economic Times reported the judgment dated November 16:
“A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months or brings disrepute to the profession or the Institute as a result of his action whether or not related to his professional work”.
CA licences are issued by the Institute of Chartered Accountants of India (ICAI).
The SC judgement was was given in a case that pitted the ICAI against CA Gurvinder Singh on the latter’s conduct following a sale of 100 shares was. However, the details of the misconduct by Singh had not been mentioned in the order. The ruling was welcomed by ICAI former president Manoj Fadnis, who was heading the body at the time the case was filed. He was quoted in ET as saying: “This judgement now settles and vindicates ICAI’s position.”
The ruling means that CAs must watch their conduct at all times as offenses like drinking and driving or creating a public scene that disgraces the accounting profession could lead to disciplinary action.
Notably, the Supreme Court bench had overturned the high court ruling, saying it had not correctly appreciated the Sector 21(3) of Chartered Accountants Act 1949. Under this Act, ICAI can enforce disciplinary action against a CA who is found guilty of a civil or criminal offence that carries a punishment under the Indian penal code of less than six months.