2003 (2) TMI 522 - HC - Indian Laws

Summary

Issues Involved:
1. Misconduct by a Chartered Accountant.
2. Disciplinary proceedings and findings by the Disciplinary Committee and the Council.
3. Allegations of professional misconduct and its implications.
4. Fundamental rights and professional ethics.
5. Appropriate punishment for misconduct.

Detailed Analysis:

1. Misconduct by a Chartered Accountant:
The respondent, a member of the Institute of Chartered Accountants of India, authored a book titled "Tax Planning for Secret Income (Black Money)," which detailed various methods of creating black money and converting it into white. This conduct was deemed unbecoming of a chartered accountant, thus constituting professional and/or other misconduct under sections 21 and 22 of the Chartered Accountants Act, 1949.

2. Disciplinary Proceedings and Findings by the Disciplinary Committee and the Council:
The Disciplinary Committee, after an inquiry, found that the respondent's book effectively educated the public on tax evasion methods, which was contrary to the high standards of integrity and professional ethics expected of a chartered accountant. The Council, in its 144th meeting, upheld the findings of the Disciplinary Committee, rejecting the respondent's arguments and concluding that the respondent was guilty of "other misconduct."

3. Allegations of Professional Misconduct and its Implications:
The respondent argued that the book was intended to inform the public about societal practices and that there was no direct reference to chartered accountants aiding in the creation of black money. However, the Council found that the book's actual effect was to educate the public on tax evasion, thus lowering the profession's image. The Council's findings were based on detailed excerpts from the book, which provided step-by-step methods for tax evasion.

4. Fundamental Rights and Professional Ethics:
The respondent contended that his fundamental right to freedom of speech and expression was violated. However, the court held that the statutory provisions enabling disciplinary action against a member for misconduct were reasonable restrictions in the interest of decency, morality, and public order. The court emphasized that the professional body has the authority to regulate the conduct of its members to maintain the profession's integrity and public trust.

5. Appropriate Punishment for Misconduct:
The Council recommended removing the respondent's name from the Register for six months. However, considering the serious nature of the misconduct, the court found this punishment inadequate. Despite the respondent's age, health issues, and expressed repentance, the court directed that the respondent be removed from the membership of the institute for five years to uphold the profession's standards and deter similar misconduct in the future.

Conclusion:
The court upheld the Council's findings of misconduct against the respondent and imposed a five-year removal from the Institute's membership, emphasizing the need to maintain high ethical standards in the profession and protect public interest. The respondent's request for a stay on the order was denied, reflecting the gravity of the misconduct and the necessity for prompt disciplinary action.