Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
CASE NO.:
Appeal (civil) 6835 of 2000
PETITIONER:
Institute of Chartered Financial Analysts of India & Ors
RESPONDENT:
Council of the Institute of Chartered Accountants of India & Ors
DATE OF JUDGMENT: 16/05/2007
BENCH:
S.B. Sinha
JUDGMENT:
J U D G M E N T
S.B. SINHA, J :
1. Appellant No.1 herein is a Society registered under the Andhra
Pradesh (Telangana Area) Public Societies Act, 1350F. At the time of its
registration it was known as ’Institute of Certified Financial Analysts’,
which was changed to ’The Institute of Chartered Financial Analysts of
India’. Appellants contend that it offers the Chartered Financial Analyst
Course/Programme, which is entirely different from that offered by
Respondent No.1 It has sought for opinion from the Director General of
Investigation and Registration in terms of Sections 11 and 36 of the
Monopolies and Restrictive Trade Practices Act, 1969 on 11.02.1988,
whereto a reply was sent by the appellants on 24.02.1988. A notice,
however, was published in the journal of Respondent No.1 herein, wherein a
purported caution to members about the appellant-Institute was published in
the following terms :
"It has come to the notice of the Institute that the
Institute of Chartered Financial Analysts of India,
Hyderabad is conferring the designation of "Chartered
Financial Analyst" and permitting its members to use the
letters ’C.F.A.’ after their names. The Additional
Solicitor General of India has opined that the designation
"Chartered Financial Analyst", would seem to be similar
to the designation Chartered Accountant especially when
the letters ’C.F.A.’ are added to the name, which is very
close to the letters ’F.C.A.’ conferred by the Institute of
Chartered Accountants of India. He has further opined
that the activities of the Institute of Chartered Financial
Analysts of India are violative of Section 24A of the
Chartered Accountants Act, 1949. The Institute has
already filed an application under Section 36 of the
MRTP Act, 1969 with the Director General, MRTP
Commission, New Delhi against the activities of the said
Institute and the matter is under investigation by the
Commission."
2. It is, however, not in dispute that no investigation was initiated by the
MRTP Commission in that behalf. A notice was sent by Appellant No.1 to
Respondent No.1, asking for a copy of the opinion of the Additional
Solicitor General so as to enable it to know the facts placed before him for
his opinion. But no response was received thereto. A reminder thereto was
sent on 15.06.1989 and by a letter dated 11.07.1989, the Secretary of
Respondent No.1 refused to send the copies of the case and the opinion of
the Additional Solicitor General. On or about 03.08.1989, a notification was
issued by Respondent No.1 herein prescribing that if any member of the
Respondent-Institute i.e. any Chartered Accountant, who obtained the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12
qualification of the Chartered Financial Analyst on or after 01.01.1990; or
having obtained the said qualification earlier did not surrender the same
before the said date, would be held to be guilty of professional misconduct
in term of the provisions of the Chartered Accountants Act, 1949 (for short,
’the Act’).
3. A writ petition was filed before the Andhra Pradesh High Court by
Appellant No.1 herein on or about 16.11.1989. The said writ petition was
dismissed by a learned Single Judge by a judgment and order dated
21.11.1990, inter alia, opining :
"The proviso to a section cannot be expected to
nullify the effect of the main Section. The proviso must
be treated as an exception and subservient to the object
sought to be achieved by the main Section. Under
Appendix No. (8) it was agreed that the Institutes
previously recognized under the Auditor’s Certificate
Rules, 1932, be recognized for the purposes of Section 7
for the use of letters, F.S.A.A. Further the Council
decided that letters or description in respect of
membership of bodies other than Accountancy Institutes
can be used provided such use does not amount to the use
of designation and in the case of Accountancy Institutes
prior recognition of the Council in this behalf is
necessary. It was also decided that in respect of
Accountancy Institutes prior recognition of the Council
in this behalf is necessary. It was also decided that in
respect of Accountancy Institutes, which are recognized
and in respect of Institutes other than Accountancy
Institutes the word ’London’ in brackets may be allowed
to be added provided that in each case the respective
Institutes had permitted such addition. The Council also
decided that the Institute of Costs and Works
Accountants is not an Accountancy Institute within the
meaning of Section 7 and therefore there was no bar to
the use of these letters by the members of that Institute, if
they happen to be their members.
A combined reading of Section 7 and the
Appendix (8) makes it clear that Chartered Accountants
who have been registered as members of the 1st
respondent-Institute alone are permitted to use the letters
or description which are recognized by it. Therefore it is
clear that the designation of ’Chartered Financial
Analyst’ is not recognized by the 1st respondent-Institute
or for that matter by the Central Government or by any
Statute. Therefore, under Section 24A of the Act the 1st
respondent-Institute can impose restrictions on all the
members of the 1st petitioner-Institute not to use the
unrecognized diploma or designation that has been
awarded by the 1st petitioner-Institute. Section 24A
clearly provides penalty for using the name of the
Council, awarding degree of Chartered Accountancy etc.
Section 24A of the Act reads as follows :
"24A.-Penalty for using name of the Council
awarding degree of chartered accountancy, etc. :
"(1) Save as otherwise provided in this Act, no
person shall \026
(i) use a name or the common seal which is
identical with the name or the common seal of the
Institute or so nearly resembles it as to deceive or
as is likely to deceive the public;
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12
(ii) award any degree, diploma or
certificate or bestow any designation which
indicates or purports to indicate the position or
attainment of any qualification or competence
similar to that of a member of the Institute; or
(iii) seek to regulate in any manner
whatsoever the profession of chartered
accountants."
Sub-section (2) of Section 24A deals with the
penalty to be imposed in case of contravention of the
provisions of sub-section (1). Under sub-section (3) it is
stated that nothing contained in this section shall apply to
any University established by law or to any body
affiliated to the Institute. The 1st respondent-Institute can
also impose restrictions on its own members and also
impose penalty for using the name of the Council,
awarding degree of chartered accountancy. Section 24
deals with the penalty for falsely claiming to be a
member of the Institute (R-1)
According to the petitioners, the course of study
that is being taught at the Institute is different. But the 1st
respondent Institute contends that the course of study is
similar. The respondents filed an Annexure-X to the
counter giving a comparative table of syllabi of ICFAI
and ICAI. But one should not forget the fact that the 1st
respondent-Institute has got authority to change the
syllabus from time to time depending upon the changes
in the economic environment in the national and
international sphere and the Chartered Accountants can
function not only as Accountants, Auditors, Financial
Advisors, but also as Financial Analysts. The Chartered
Accountancy course is fairly exhaustive and includes
areas in financial and investment management, micro
economics and security evaluation, project appraisal and
Indian financial system.
Section 2(b) of the Act defines ’Chartered
Accountant’ as to mean a person who is a member of the
Institute and the persons who have passed such
examination and complete such training as may be
prescribed for members of the Institute shall be entitled
to have their names entered in the Register of the
Institute and no member of the Institute shall be entitled
to practice whether in India or elsewhere unless he has
obtained from the Council a Certificate of practice.
According to Section 7, every member of the Institute in
practice shall, any other member may, use the
designation of a chartered accountant and no member
using such designation shall use any other description,
whether in addition thereto or in substitution therefor.
The members of the Institute are divided into two classes
viz., associates and fellows. Any person whose name is
entered in the Register is deemed to have become an
associate member of the Institute and is entitled to use
the letters "A.C.A." after his name to indicate that he is
an associate member of the Institute of Chartered
Accountants. A member, being an associate, who has
been in continuous practice in India for at least five years
as a Chartered Accountant is entitled to use the letters
F.C.A. after his name to indicate that he is a fellow of the
Institute of Chartered Accountants and his name will be
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12
entered in the Register as a fellow of the Institute."
It was further held :
"There are many Analysts in different fields such as
Food Analyst and Chemical Analyst. But when the 1st
petitioner-Institute is dealing with the accountancy
profession and training people in one form or the other, the
1st respondent-Institute which is a statutory body is
perfectly justified in restraining their own members in
using some other designation which is akin or which
resembles the designation along with the designation that
is being conferred by the 1st respondent-Institute, which
will give rise an impression in the minds of the general
public or the persons connected with the accountancy
profession that the designation ’C.F.A.’ is an additional
qualification to the persons that were already holding
’C.A.’ or ’F.C.A.’. Such preference cannot be taken
advantage of by the members of the 1st respondent-Institute
and Section 24A of the Act gives ample power to the 1st
respondent-Institute to issue the impugned Notification as
well as the ’caution’.
4. A writ appeal filed thereagainst was dismissed by a Division Bench of
the High Court relying on or on the basis of a decision of this Court in Dr.
Haniraj L. Chulani v. Bar Council of Maharashtra & Goa [JT 1996 (4) SC
162 : (1996) 3 SCC 342], holding :
"\005In the instant case too what is sought to be prevented
is membership of a Chartered Accountant, who is
governed by the Chartered Accountants Act, 1949 from
being a member of the 1st appellant-institution and should
a Chartered Accountant not like this imposition, he may
be free to resign from being a Chartered Accountant and
then can be free to choose to be a member of any other
institution including that of the 1st respondent. But, so
long as he continues to be the Chartered Accountant
under the Act, his degree and practice can be regulated
only under the provisions of the said Act. The authorities
under the Act also found that the degree of C.F.A. affixed
is causing confusion and gullible public may be
misguided and in order to streer clear off such confusion
and in larger public interest, the authorities thought that
the Chartered Accountants registered under the Act and
governed by the Council of the Institute of Chartered
Accountants of India not to acquire the C.F.A. and if
already acquired, shed the said membership. Having
regard to the reasons stated in the impugned notification
as also the reasoning given by the learned single Judge, it
cannot be said that there is no nexus for the object to be
achieved and that the impugned notification is irrational.
Fundamental right to practice a profession guaranteed
under Article 19(1)(g) of the Indian Constitution can
always be hedged with restrictions; but the said
restrictions should be reasonable restrictions and in the
instant case, having regard to the facts and circumstances
discussed and legal it cannot be said that the restrictions
imposed are unreasonable so as to negate the
fundamental rights of the Chartered Accountants to
practice their profession."
5. Mr. K.K. Venugopal, the learned Senior Counsel appearing on behalf
of the appellants, would submit :
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12
i.) The High Court committed a manifest error in passing the impugned
judgment insofar as it failed to take into consideration that in terms of
Section 7 of the Act any Chartered Accountant whether in profession
or not is entitled to use any degree and in that view of the matter, the
prohibition purported to have been imposed by reason of the
impugned notification dated 03.08.1989 must be held to be arbitrary.
ii) The said notification is violative of a person’s fundamental right
guaranteed under Article 19(1)(g) of the Constitution of India.
iii) The power to issue such a notification being hedged with excessive
delegattion, the same would otherwise be ultra vires Article 14 of the
Constitution of India.
6. Mr. S. Ganesh, the learned Senior Counsel appearing on behalf of the
respondents, on the other hand, would submit :
i) Section 7 of the Act prohibits a Chartered Accountant from using any
other description, whether in addition thereto or in substitution
thereof. A Chartered Accountant is, therefore, prohibited from using
the description ’Chartered Financial Analyst’ or its abbreviation
’CFA’.
ii) Proviso to Section 7 permits a Chartered Accountant to add a
description or letters to his name to indicate membership of another
Institute of Accountancy, only if that other Institute, has been
recognized by the Council and not otherwise. Consequently, addition
of a description or letters to indicate membership of a non-recognized
Institute of Accountancy is prohibited, even by the proviso to Section
7 of the Act. The ’other qualification’ occurring to in the latter part of
the proviso to Section 7 refers to the qualification other than
membership of an Institute of Accountancy such as LL.B., Ph.D,
MBA, MBBS etc. The proviso cannot possibly be so construed as to
nullify completely the prohibition in the opening part of Section 7.
iii) The appellant Institute is an Institute of Accountancy because :
(a) There is a very substantial overlapping of the curriculum of the
ICFII and that of ICAI.
(b) A Chartered Accountant is exempted from giving 3 out of the 6
examination papers of the ICFAI.
(c) Strictly financial analysis is only study and analysis of
accounts.
(d) A Chartered Accountant is trained to do financial analysis and
ordinarily does it as part of his practice of accountancy.
iv) In any event, the considered view of the ICAI that ICFAI is an
institute of accountancy should not be interfered with by the Court,
having regard to the materials on record and expertise of the Institute
in the field of accountancy in general.
v) The ICAI is also of the considered view that the diploma/certificate
bestowed by ICFAI does indicate ’the position or attainment of any
qualification or competence similar to that of a member of the
Institute’ which attracts the prohibition in Section 24A(1)(ii) of the
Act.
vi) Further, the letters ’CFA’ closely resemble ’FCA’ and are capable of
misleading the lay public and also conveying the entirely erroneous
impression that a FCA with a CFA is superior to a mere ’FCA’. This
will directly result in the dilution and debasement of the value of the
membership of the Institute.
vii) Item No. (i) of Part II of the Second Schedule makes it clear that
contravention of any provision of the Act or of the regulations made
thereunder would amount to a misconduct. Section 22 defines
’professional misconduct’ in the widest possible terms. This Hon’ble
Court has also read and construed Section 22 and clause (ii) of Part II
of the Second Schedule in the broadest manner.
viii) The impugned notification seeks to make effective the prohibition
contained in Sections 7 and 24A of the Act, the constitutional validity
of which has not been challenged by the appellant before the High
Court. The notification is, therefore, not unreasonable or arbitrary.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12
7. The Act was enacted to make provision for the regulation of the
profession Chartered Accountants. Section 2 thereof provides for definition
clause. ’Institute’ has been defined in Section 2(e) of the Act to mean the
Institute of Chartered Accountants of India constituted under thereunder.
Sub-section (2) of Section 2 creates a legal fiction to define a member of the
Institute to be in practice, when individually or in partnership with Chartered
Accountants (in practice) as a person in consideration of remuneration
received or to be received . Sub-Section (2) of Section 2 of the Act reads as
under :
"A member of the Institute shall be deemed "to be
in practice", when individually or in partnership with
chartered accountants (in practice), he, in consideration
of remuneration received or to be received \026
(i) engages himself in the practice of accountancy;
or
(ii) offers to perform or performs services
involving the auditing or verification of financial
transactions, books, accounts or records, or the
preparation, verification or certification of
financial accounting and related statements or
holds himself out to the public as an accountant; or
(iii) renders professional services or assistance in
or about matters of principle or detail relating to
accounting procedure or the recording,
presentation or certification of financial facts or
data; or
(iv) renders such other services as, in the opinion
of the Council, are or may be rendered by a
chartered accountant (in practice) and the words
"to be in practice" with their grammatical
variations and cognate expressions shall be
construed accordingly.
Explanation.- An associate or a fellow of the Institute
who is a salaried employee of a chartered accountant (in
practice) or (a firm of such chartered accountants) shall,
notwithstanding such employment, be deemed to be in
practice for the limited purpose of the training of articled
clerks."
8. Section 3 of the Act provides for incorporation of the Institute.
Section 7 of the Act, which is relevant for determination of the case, reads
under :
"7. Members to be known as Chartered Accountants
Every member of the Institute in practice shall,
and any other member may, use the designation of a
chartered accountant and no member using such
designation shall use any other description, whether in
addition thereto in substitution therefor :
Provided that nothing contained in this section
shall be deemed to prohibit any such person from adding
any other description or letters to his name, if entitled
thereto, to indicate membership of such other Institute of
accountancy, whether in India or elsewhere, as may be
recognized in this behalf by the Council, or any other
qualification that he may possess, or to prohibit a firm,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12
all the partners of which are members of the Institute and
in practice, from being known by its firm name as
Chartered Accountants.
Sub-section (1) of Section 21, inter alia, lays down the manner in
which an inquiry relating to misconduct of members of the Institute shall be
instituted.
Section 22 of the Act defines professional misconduct to mean :
"22. Professional misconduct defined
For the purpose of this Act, the expression
"professional misconduct" shall be deemed to include
any act or omission specified in any of the Schedules, but
nothing in this section shall be construed to limit or
abridge in any way the power conferred or duty cast on
the Council under sub-section (1) of Section 21 to inquire
into the conduct of any member of the Institute under any
other circumstances."
Section 22A of the Act provides for a statutory appeal to a High Court
against the order the disciplinary committee. Section 24A was introduced in
the year 1949 containing a penal provision for using the name of the
Council, awarding degree of chartered accountancy, etc. The said provision
reads as under :
"(1) Save as otherwise provided in this Act, no person
shall \026
(i) use a name or the common seal which is
identical with the name or the common seal of the Institute
or so nearly resembles it as to deceive or as is likely to
deceive the public;
(ii) award any degree, diploma or certificate or
bestow any designation which indicates or purports to
indicate the position or attainment of any qualification or
competence similar to that of a member of the Institute; or
(iii) seek to regulate in any manner whatsoever the
profession of chartered accountants."
Sub-section (2) of Section 24A provides for punishment for violation
of the provisions of sub-section (1) thereof.
9. Part I of the First Schedule appended to the Act lists the professional
misconducts in relation to Chartered Accountants in practice; whereas Part II
deals with professional misconduct in relation to members of the Institute in
service. Part III deals with professional misconduct in relation to members
of the Institute generally. Part I of the Second Schedule appended to the Act
deals with professional misconduct in relation to Chartered Accountants in
practice requiring action by a High Court; whereas Part II provides for
professional misconduct in relation to members of the Institute generally
requiring action by a High Court, whether in practice or not.
10. A resolution has been passed by the Council under Section 2(2)(iv) of
the Act exempting a member who is holding a Certificate of Practice from
the Institute of Cost & Works Accountants of India or the Institute of
Company Secretaries of India or from the Bar Council or such other bodies,
as may be specified in that behalf, by the Council, from the purview of
clause (3) thereof which reads as under :
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12
"(3) "Pursuant" to Section 2(2)(iv) of the
Chartered Accounts Act, 1949, the Council herein
reiterates its opinion that a member shall be deemed to be
in practice if he, in his professional capacity and neither
in his personal capacity nor in his capacity as an
employee, acts as a liquidator, trustee, executor,
administrator, arbitrator, receiver, adviser or
representative for costing, financial or taxation matters or
takes up an appointment made by the Central
Government or a State Government or a Court or law or
any other legal authority or acts as a Secretary unless his
employment is on a salary-cum-full-time basis;"
Clauses (2) and (3) of Appendix No. (8) read as under :
"The Council decided that letters or description in
respect of membership of bodies other than Accountancy
Institutes can be used provided such use does not amount
to the use of designation and in the case of Accountancy
Institutes prior recognition of the Council in this behalf is
necessary. It was also decided that in respect of
Accountancy Institutes which are recognized and in
respect of Institutes other than Accountancy Institutes the
word London in brackets may be allowed to be added
provided that in each case the respective Institutes had
permitted such addition.
xxx xxx xxx
(3) The Council also decided that the Institute
of Cost and Works Accountants is not an Accountancy
Institute within the meaning of Section 7 and therefore
there was no bar to the use of these letters by the
members of that Institute, if they happen to be our
members."
11. The High Court proceeded on the basis that the notification is covered
under Sections 7 and 24A of the Act.
12. Before proceeding to consider the respective contentions raised by the
learned counsel for the parties, we may notice that the constitutionality of
the provisions of the Act are not in question. What was in question before
the High Court was merely the validity of the said notification dated
03.08.1989.
13. Section 7 of the Act prohibits any member using the designation of a
Chartered Accountant from using any other description, whether in addition
thereto or in substitution therefor. Proviso appended thereto, however, inter
alia, permits the member of the Institute to describe any other qualification
that he may possess. The proviso is in three parts. The first part lifts the
embargo provided under the main provision in respect of membership of
such other Institute of Accountancy, whether in India or elsewhere may be
recognized in that behalf by the Council. The Second parts enables the
member of the Institute to add any other qualification that he may possess;
and third part prohibits a firm, all the partners of which are members of the
Institute and in practice, from being known by its firm name as Chartered
Accountants. We are not herein concerned with the third part.
14. Whereas submission of Mr. Venugopal is that the second part of the
proviso appended to Section 7 of the Act enables the member of the Institute
to use any qualification and in that view of the matter the qualification
acquired by any member from the appellant Institute being a matter of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12
statutory right cannot be taken away by reason of a delegated notification;
the submission of Mr. Ganesh is that the second part of the proviso must be
given a contextual meaning in the light of the first part thereof.
15. The role of a proviso is well-known. A proviso may restrict the
operation of the main provision, but by reason thereof the rights and
liabilities contained in the main provision cannot altogether be taken away.
16. The main provision contains the prohibition, but the proviso appended
thereto only lifts such prohibition to the extent mentioned therein, in respect
of the other Institutes of Accountancy, the degrees granted in respect thereof
are six in number, as would appear from Appendix No. (8) of the said Act.
The expression ’any other qualification that he may possess’, therefore, must
be read as qualification other than conferred upon the member by other
Institutes of Accountancy. Such qualification of accountancy may be
conferred even by other Institutes. But as noticed hereinbefore, an
exemption had been granted by reason of a resolution of the Institute in
relation to the Institute of Cost and Works Accountants. Furthermore, a
degree conferred by any university also is subject to an exemption from the
rigour of the provisions of Section 7 of the Act.
17. There cannot, therefore, be any doubt whatsoever that ’the other
qualification’ would mean a qualification other than granted by an Institute
of Accountancy, subject of course to recognition thereof by the Institute.
18. The questions, however, which is required to be posed and answered
inter alia is whether by reason of a notification, acquisition of a qualification
itself can be prohibited. The Institute is constituted under a parliamentary
act. It is governed by the provisions thereof as also the rules and regulations
framed thereunder. It being a statutory authority must confine its activities
within the four-corners of the statute. Section 7 of the Act debars a person
from using a qualification; it does not prohibit him from acquiring a
qualification. If, therefore, any member of the Institute intends to acquire a
qualification, the same being an inherent and human right cannot be a
subject-matter of prohibition until and unless there exists any statutory
interdict therefor.
19. The explanatory statement appended to the notification does not state
that the same had been issued for the purposes sought to be achieved by
Section 7 of the Act. Even otherwise it is impermissible. What is a
professional misconduct has been defined. The statutory authority,
therefore, cannot transgress its authority that acquisition of a qualification by
a member of the Institute shall itself constitute a misconduct. We have no
doubt in our mind that the provision of Section 22 of the Act must be
construed widely. It must take within its sweep the misconduct of a member
of the Institute, which would disentitle him from pursuing a noble
profession.
20. Our attention, in this behalf, has been drawn to two decisions of this
Court in The Council of the Institute of Chartered Accountants of India &
Another v. B. Mukherjea [(1958) SCR 371 : AIR 1958 SC 72] and H.A.K.
Rao v. Council of Institute of Chartered Accountants of India, New Delhi
[AIR 1967 SC 1257]. They were, however, rendered in different fact
situation.
21. In B. Mukherjea (supra), the question which arose for consideration
before this Court was as to whether a Chartered Accountant while acting in
the capacity of a liquidator appointed by the High Court could refuse to
furnish any information to this Court and, thus, committed a misconduct.
22. In H.A.K. Rao (supra), the question which arose was as to whether
canvassing for the purpose of contesting an election to the post of an
Institute is permissible in law.
23. We are herein concerned with the term ’misconduct’. The word
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12
’misconduct’ which in generic sense would mean, as held in Probodh Kumar
Bhowmick v. University of Calcutta and Ors. 1994 (2) C.L.J. 456 is as
under:
"Misconduct, inter alia, envisages breach of discipline,
although it would not be possible to lay down
exhaustively as to what would constitute conduct and
indiscipline, which, however, wide enough to include
wrongful omission or commission whether done or
omitted to be done intentionally or unintentionally. It
means, ’improper behaviour; intentional wrong doing on
deliberate violation of a rule of standard or behaviour’:
Misconduct is a transgression of some established and
definite rule of action, where no discretion is left except
what necessity may demand; it is a violation of definite
law a forbidden act. It differs from carelessness.
Misconduct even if it is an offence under the Indian
Penal Code is equally a misconduct."
[See also State of Punjab and Others v. Ram Singh Ex. Constable - AIR
1992 SC 2188 : (1992) 4 SCC 54 and B.C. Chaturvedi v. Union of India
(1995) 6 SCC 749].
24. In ’M’ an Advocate Re [AIR 1957 SC 149], this court dealt with
professional misconduct in the following terms :
"As has been laid down by this Court in the matter of ’G’,
a Senior Advocate of the Supreme Court (A) (supra) the
Court, in dealing with cases of professional misconduct is
"not concerned with ordinary legal rights, but with the
special and rigid rules of professional conduct expected
of and applied to a specially privileged class of persons
who, because of their privileged status, are subject to
certain disabilities which do not attach to their men and
which do not attach even to them in a non-professional
character ...he ( a legal practitioner) is bound to conduct
himself in a manner befitting the high and honourable
professional to whose privileges he has so long been
admitted; and if he departs from the high standards which
that professional has set for itself and demands of him in
professional matters, he is liable to disciplinary action."
25. Whether misconduct has been conducted or not would depend upon
the statute in question and the nature of misconduct said to have been
committed. A misconduct must be definite or precise but subject to its
generic meaning in absence of any statutory definition. When a person is
otherwise entitled to acquire any additional qualification, such qualification
per se, in our opinion, cannot be termed to be a misconduct in its generic
sense.
26. There is another aspect of the matter. A distinction must be drawn
between a misconduct committed by an employee and a professional
misconduct. In the case of the latter, the person in the profession precisely
knows what is expected of him. It may not be possible to lay down all such
misconducts but, in our opinion, it would be too much to contend that even
an acquisition of an additional qualification would come within the purview
thereof. Such a broad meaning in our opinion defy all norms.
27. In B.P. Sharma v. Union of India and Others [(2003) 7 SCC 309], this
Court held:
"14. The right which is guaranteed to all citizens under
Article 19(1)( g) of the Constitution of India is to practise
any profession or to carry on any calling, trade or
business. Clause (6) of Article 19, however, places a
restriction that nothing would prevent the State from
making any law imposing reasonable restrictions in
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12
exercise of the right in the interest of the general public.
Sub-clauses ( i ) and ( ii ) further provide that
professional and technical qualifications, as may be
thought necessary for practising the profession, can
always be prescribed and exclusion of carrying on of any
calling, trade or business etc. is also envisaged which is
also carried on by a State or by a corporation owned and
controlled by the State. Subject to the abovenoted
restrictions the valuable right as provided under Article
19(1)( g ) is available to all the citizens who are free to
choose any trade, business, calling or profession etc. It
obviously, also includes the manner and terms in which
they will carry on their profession, but again subject to
reasonable restrictions which may be thought necessary
by the State in the interest of the general public. On the
other hand, once a citizen voluntarily chooses to join
government service or any other service, he would
obviously be free to do so but he would be bound by the
terms and conditions of the service as may be provided
under the law or by contract of service."
28. Submission of Mr. Ganesh that Section 7 should be read with Section
24A of the Act, in our opinion, cannot be accepted. An institute may
commit an offence for awarding a degree in respect of attainment of any
qualification or competence similar to that of a member of institute. But
answer to such a question must be rendered as and when the same is raised.
It is not for us to proceed on the presumption that the appellant has
committed an offence. It is also not possible to hold that the appellant has
committed an offence. It is also not possible to hold that in the event such
an offence has been committed, awarding of any degree in violation of
Clause (ii) of Sub-section (1) of Section 24A of the Act would be a nullity.
In any event, so long awarding of any degree is not held to be illegal or a
nullity, using the same as permitted in terms of Section 7 of the Act would
not per se be illegal. If it is not per se held to be illegal, the concept of
misconduct arising as a result thereof, in our opinion, would not arise.
Reasonableness is the soul of law. A law is said to be the perfection of
reason. Even otherwise, Section 24A of the Act is a penal provision. It
must receive a strict construction. What is, therefore, not contemplated is a
misconduct under the Act, in our opinion, cannot be termed to be a
misconduct by reason of an administrative order. A statutory authority, as is
well-known, must not only act within the four-corners of the statute, it also
must act fairly and reasonably.
29. Our attention has been drawn to certain subsequent events. We do not
think that we should go thereinto. It would be for the appropriate authority
to take a decision on the basis of the said subsequent events. Submission of
Mr. Ganesh that the decision taken by Respondent No. 1 having been taken
by an expert decision and, thus, the same does not deserve any interference
at the hands of the court, in our opinion, is misconceived.
30. Interpretation of law is the job of the superior court. An opinion of an
expert is not beyond the pale of judicial review. It would certainly not be so
when the statutory authority transgresses its jurisdiction. A decision taken in
excess of jurisdiction would render the same a nullity. [See Vasu Dev Singh
& Ors. v. Union of India & Ors. 2006 (11) SCALE 108]
31. In any event, similarity in the designation on the premise that three of
the papers taught by the appellant institute are also taught by Respondent
No. 1 cannot be a ground to uphold the contention of Mr. Ganesh.
32. If a notification issued under a statute is a law within the meaning of
Article 13(3)(a) of the Constitution, the same is liable to be struck down if it
is contrary to any of the fundamental rights guaranteed under the
Constitution of India. [See Indian Express Newspapers (Bombay) Private
Ltd. and Others v. Union of India and Others, (1985) 1 SCC 641]. In our
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
opinion the notification dated 03.08.1989 issued by respondent No.1 violates
Articles 14 and 19 (1) (g) of the Constitution and is hereby quashed.
33. For the reasons aforementioned, the impugned judgment cannot be
sustained which is set aside accordingly. The appeal is allowed. No costs.