2018 (4) TMI 1413 - HC - Companies Law

Scope of Practice of the Profession of Architecture - Restrict registration applications from any company or Limited Liability Partnership (hereinafter referred to as LLP ) which states that it provides architectural services as of one of its objectives in its memorandum of association - whether the practice of the profession of architecture is the exclusive privilege of natural persons registered under the Act? - Held that - Inevitable conclusion is that the Act only prohibits the use of the title and style of architect by unregistered natural persons or juristic entities. It does not prevent unregistered persons, including juristic entities, from rendering architectural services or mentioning the same as one of their objectives in their MOA. Permitting a person/juristic entity, who is not registered under the Act to use the term architect in their/its name, would amount to permitting something which the Act wanted to prohibit. Thus find that the intent of Section 37 is that the public should not be mislead to believe that persons/juristic entities that use the title/style of architect or its derivatives are registered architects, even when they are not. Therefore, persons/juristic entities cannot be allowed to use the style/title of architect or its derivatives in their names, unless they are registered as architects with the COA. When the FIPB approval was granted to RSP Singapore, there was admittedly no clarity on whether the use of the expression architect in the title/style/name of a juristic entity was prohibited by the provisions of the Act. Further, RSP Singapore s subsidiary has now already changed its name to RSP Design Consultants India Pvt. Ltd., by removing the word architect from the same in conformity with the provisions of the Act. Therefore, find no reason to grant the prayer seeking cancellation of the FIPB approval granted to RSP Singapore. The first part of the Impugned Circular No. 1, entities/persons who are not registered as architects are prohibited from using the title/style of architect, is in consonance with the scheme of the Act and promotes the intent of the Act by ensuring the title of an architect is not misused by unregistered persons. No reason to interfere with the said part of the circular. However, when examine the second part of the Impugned Circular No. 1 and the Impugned Circular No. 2, it is find that they, instead of only prohibiting unregistered persons/entities from using the style and title of architect , also effectively prohibit the incorporation of companies/LLPs that include the rendering of architectural services as one of their objectives, even if such juristic persons do not use the title and style of architect . Furthermore, in the Impugned Circular No. 2, the Ministry of Corporate Affairs wrongly equates the provisions of the Architects Act with those of the CA Act, Cost and Works Accountants Act, 1959 and Company Secretariats Act, 1980, each of which specifically ban the practice of their respective professions by companies (whether incorporated in India or elsewhere) and provide punishment for contravention of the said provisions. No such provision can be found in the Architects Act. On the contrary, specific provisions can be found in the Architects Act, which allow for the employment of architects in companies, which would not be allowed if the legislative intent was to restrict the practice of architecture to private persons and partnerships. The second part of the Impugned Circular No. 1 dated 10.10.2011, Impugned Circular No. 2 dated 01.03.2012 and second part of the Impugned Notice dated 20.05.2013 in imposing the aforementioned restrictions, are contrary to the provisions of the Act, and are, therefore, quashed.

Summary

Issues Involved:
1. Whether the Architects Act, 1972 precludes unregistered architects, including juristic entities, from rendering architectural services or merely prohibits them from using the title and style of 'architect' or its derivatives.
2. Whether architectural services can be provided only by natural persons who are registered under the Architects Act, 1972.
3. The legality of the Impugned Circulars and Notice issued by the Ministry of Corporate Affairs and the Council of Architecture.
4. The validity of the FIPB approval granted to RSP Singapore for setting up a wholly owned subsidiary in India for providing architectural services.

Detailed Analysis:

1. Scope of the Architects Act, 1972:
The primary issue before the court was whether the Architects Act, 1972 precludes unregistered architects, including juristic entities, from rendering architectural services or merely prohibits them from using the title and style of 'architect' or its derivatives. The court held that the Act only protects the title and style of 'architect' and does not preclude any person from providing architectural services. The Act defines an architect as a person registered under the Act and lays down the qualifications for registration but does not contain any prohibitory provisions similar to those in the Advocates Act, 1961 or the Chartered Accountants Act, 1949, which restrict the practice of law or accountancy to registered professionals only.

2. Provision of Architectural Services:
The court concluded that the provision of architectural services is not the exclusive privilege of natural persons registered as architects under the Act. The Act does not make the design, supervision, and construction of buildings an exclusive responsibility of architects. The Statement of Objects and Reasons of the Act and its legislative history indicate that the Act sought to prevent the misuse of the title 'architect' by unqualified persons, but did not intend to restrict the provision of architectural services to registered architects only.

3. Legality of the Impugned Circulars and Notice:
The court examined the Impugned Circulars and Notice issued by the Ministry of Corporate Affairs and the Council of Architecture. It held that the first part of the Impugned Circular No. 1, which prohibits unregistered persons/entities from using the title/style of 'architect', is in consonance with the scheme of the Act. However, the second part of the Impugned Circular No. 1 and the Impugned Circular No. 2, which prohibit the incorporation of companies/LLPs that include the rendering of architectural services as one of their objectives, were found to be contrary to the provisions of the Act. The court quashed these parts of the circulars and notice, stating that they were not justified in requiring an approval/NOC from the COA for such incorporation.

4. Validity of the FIPB Approval:
Regarding the FIPB approval granted to RSP Singapore for setting up a wholly owned subsidiary in India, the court found that RSP India had violated the provisions of the Act when it initially used the term 'architect' in its name. However, since RSP India had already changed its name to remove the word 'architect', the court found no reason to cancel the FIPB approval. The court held that RSP India did not violate any Indian law by rendering architectural services or mentioning the same as one of its objectives in its MOA.

Conclusion:
The court concluded that the Architects Act, 1972 only prohibits the use of the title and style of 'architect' by unregistered persons or juristic entities and does not preclude them from rendering architectural services. The Impugned Circulars and Notice were partially quashed as they imposed restrictions not contemplated by the Act. The FIPB approval granted to RSP Singapore was upheld as RSP India had complied with the provisions of the Act by changing its name.