Mohit Bansal v. The Institute of Chartered Accountants of India

Case snapshot

Sections / provisions: Section 354/506-II of Indian Penal code; 1860 and Section 8 of the Chartered Accountants Act 1949

Questions before the Court / Tribunal

• *Mohit Bansal Vs The Institute of Chartered accountants of India* *Forum-Delhi High Court* *Date- 21st January 2022* *Sub-Whether a Chartered accountant who has committed an offence under IPC 354 , 506-II relating to outraging modesty of a woman prior to his being enrolled as a member of the Institute can be disqualified by the Institute of Chartered Accountants of India u/s 8 of the Chartered Accountants of India, 1949 and that too after a long period of time?* An interesting question arose in this case where the appellant being a chartered accountant committed offences under *IPC 354 and 506-II dealing with outraging modesty of a woman during his college days amounting to moral turpitude* and was issued show cause notice by ICAI for removal of his name under various provisions of the Act. The petitioner in this case interalia argued that the offence was committed at a time when he had…
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

Prathiba M. Singh, J. 1. The Petitioner- Mohit Bansal, is a qualified Chartered Accountant (hereinafter “CA” ), enrolled with the Respond ent No. 1 – Institute of Chartered Accountants of India (hereinafter, “ICAI”) since 25 th January 2008. 2. The ICAI issued a notice dated 25th June 2018, to show cause as to why action under Section 8 of the Chartered Accountants Act, 1949 (hereinafter, “Act”) should not be taken against the Petiti oner in view of his conviction by the Delhi High C ourt under Sections 354 and 506 -II of

the Indian Penal Code 1860. The operative portion of the said notice reads as under: “ Please refer to your letter dated 27.01.2017 sending therewith a copy of the judg ment dated 07.10.2013 of the Hon ’ble Delhi High C ourt in the Cr.LA no. 828 of 2009 filed by you. Relying on the aforesaid judgment dated 07.10.2013, yo u have stated that the Hon’ble High Court of Delhi has acquitted you from the charge levelled under Section 376(2)(g) of the Indian Penal Code, 1860. However it has been noticed that vide the same judgment , the Hon’ble Delhi High C ourt has convicted you under another Section 354 of the Indian Pen al Code, 1 860, i.e., ‘Assault or criminal force to woman with intent to outrage her modesty’ and also maintaine d your earlier conviction under Section 506 -II of the IPC i.e. ‘Punishment for criminal intimidation ’ (para 109, 110 and 11 3 of judgment).

It h as further been not iced that you had filed an app lication u/s 4 and 6 of the Probation of Offenders Act , 1958 read with Section 482 of the Code of Criminal Procedure Crl. M.A. No. 1117/3014 in Crl. Appeal No. 828/200 9, seeking probation in terms of your conviction wh ich was dismissed by the Hon ’ble Delhi High Court vide its judgment dated 12.11.2014. In t his con nection, it is informed that the above matter along with your letter dated 27.01.2017 was considered by the Council. O n perusal of the judgments passed by the Hon’ble Delhi High Court , it is clear that you h ave been convicted u/s 354 of the Ind ian Penal Co de, 1860, for ‘Assault or criminal force to woman with intent to out rage her modesty ’ which involves m oral turpitude and attracts the pro visions of Section 8 of the Chartered Accountants Act, 1949 .

3. To this, a de tailed reply was filed by the Petitioner on 26 th October 2018. Post this, on 14 th September 2020, notice to appear fo r hearing was issued to the Petitioner. The said notice for hearing reads as under: “ Please r efer to ou r notice no. 1 - CA(1)/Council Affairs - MB da ted 25.06 .2018

4. The prayer of the Petitioner is to quash this notice of hearing dated 14th September 2020 , served up on him by the ICAI, and the entire

Appellant / petitioner / assessee submissions

Submissions on behalf of the Petitioner: 16. On behalf of the Petitioner it is, firstly, submitted that the wife of the Petitioner, who is a professional CA, had some disputes with one Mr. Atul Gupta- Respondent No.3, who la ter on we nt on to become the President of the ICAI. He submitted that it is at his behest that a decision was taken to debar the Petitioner from practi sing as a CA in view of the disability provided under Section 8(v) of the Act. It is thereafter, that t he notice for hearing date d 14 th September 2020 was se rved upon the Petitioner. Allegations of personal enmity and malafide on the part of the Respondent No. 3 is raised. 17. It is further submit ted that the Petitioner and his wi fe are professionals, who are fully qualified CAs, and it is only in view of the personal enmity with Mr. Atul Gupta that the entire issue has been raised in the Institute, despite opposition from various me mbers of the Committee. Reliance is placed upon the minutes of the meeting dated 13thW.P.(C) 6819/2020 Page 10 of 88

Petitioner was tha t if hi s convicti on is not s uspended, he would be debarred from the rolls of he I CAI unde r section 8, and would lose valuable years in t he profession. The key aspect in this cas e is that the Petitioner herein had primarily contended that he had appealed against his conviction and had a strong case in his favour, and hence if his plea o f suspension was not granted by the Court, he would have been disqualified from the ICAI, irrespective of the outcome of his appeal to the conviction, thus losing valuable yea rs in t he profess ion. The Co urt, upon analysin g the provisions of Section 8 and Section 20 of the Act held as under:

“6……So, a conjunct ive study of the above provisions would show that a person who is guilty of an offence committed in his prof essional capacity a ttains dis qualification to be entered or borne out in the Register maintai ned by t he Institute. Apart from it , it appears, if a p erson is held guilty by any civil o r crim inal Court for an offence punish able with imprisonment for a term exceeding six months, in such cases also, under Second Sche dule (Part III) of the Act, hewill be liable for disciplinary proceedings for misconduct. d) In the instant case as already s tated supra, the petitioner/A2 was sen tenced with a highest substantive sentence of t hree years and th erefore naturally threat of invocation of disciplinary proceedings is lo oming large at him. Therefore, I find force in the submission of learned counsel for petitioner that if by virtue of imp ugned judgment he were to be removed from the r olls of the Register pending appeal, it would cause irretrievable loss to him even if he succeeds in the appeal, since he would loose not only professional income but most importantly his goodwill and the clients. Hence, his case has to be cons idered sympathetically.

Revenue / respondent submissions

The judgment does not separately label the respondent’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Court / Tribunal analysis and reasoning

as Respondent No. 3. On the said date, u pon an assurance given on behalf of Responde nt No. 1, the proceedings before the ICAI sch eduled to be held on 24 th September 2020 were postponed during the pendency of the present pe tition. In effect therefore, the proceedings pursuant to the impugned notice of hearing have remained stayed during the pendency of the present writ petition. 15. Thereafter, submissions have been hear d by this Court, in thi s matter, from time to time. Initially, Mr. Manav Gupta, ld. Counsel made submissions on behalf of the Petitioner, however he requested for discharge on 6th September 2021. Since then, Mr. Bansal – Petitioner, has made submissions, in person.

Rejoinder submissions on behalf of the Petitioner: 34. In rejoi nder, Mr. Ba nsal, appearing in person, has attempted to distinguish P. Mohanasundaram (supra) by arguing that the facts of the said case are completely distinct from the present case. He submits that in the said case, the CA in question was enrolled in 19 75 and the of fence was committed in 1984. H owever, in the present case the offence is 7 years prior to Mr. Bansal being enrolled as a CA. He further submits that in P. Mohansundaram (supra), the CA in question did not even respond to the notice of the ICAI, and therefore, an order was passed under Section 21 of the Act. He submits that the distinction in facts needs to be

minors and matters on behalf of workers pitted again st rich and infl uential pe rsons can be entrusted to h im without qualms. Court records can be placed at his disposal, his word at the Bar should be accepted? Should a character certificate in the form of a Black Gown be given to him so that a promise of pro bity and trustworthiness i s held out to the unwary li tigants seeking justice? A copy of this order may, therefore, be sen t to the appropriate authorities concerned with the administration of the Bar Council of India and the State Bar Council, Ministry of L aw of the Government of In dia and Law Commis sion in o rder that the matter maybe examined fully and closely with the end in view to preserve the image of the professi on and protect the seekers for justice from dangers inherent in admitting such persons on the rolls of the Bar Council.

69. Pursuant to the above recommendation, an amendment was suggested by the Law Commissi on for removal of the proviso as also Section 24 (A)(2) of the Advocates Act, completely. Therefore, the two - year period was recommended to b e remove d, which in effect would result in a per manent debarment of any advocate who may have been convicted for an offence of moral turpitude. As per these recommendations, even the protection under the provision s of the Probation of Offenders Act is to be deleted. The said recommendations of the Law Commission is yet to be implemented. 70. In State Bank of India and Ors. vs. P. Soupramaniane, (2019) 18 SCC 135, the employee in questio n was working with the Bank as a messenger. He was convicted under Section 324 IPC and was sentenced to imprisonment of three months. The Supreme Court was considering Section 10(1)(b)(i) of the Banking Regulation Act, 1949 which provided

82. Coming to the profession of Chartered Accountants, in Council of the ICAI vs. B . M ukherjea AIR 1958 SC 72, the CA in question concerned was enrolled as a member of the ICAI. He was appointed as a Liquidator of three companies, however when some refunds were received by him, he did not report about the sa me. Therefore, misconduct was alleged in his role as a liquidator. A new liquidator was appointed. He was held guilty of gross negligence in the conduct of his professional duty. 83. In this fact situation, the Supreme Court considered the scheme o f the Act. The Calcutta High Court had held that the CA in question could not have been held to be guilty of professional misconduct, as it was in his capacity as a liquidator - which is not in “professional capacit y”. The challenge before the Supreme Cour t was that professional misconduct

cannot be narrowly construed. Section 8 was interpreted by the Supreme Court in this case. The Supreme Court held: “8. This would really disp ose of the appeal before us, because once it is held that the respondent is guil ty o f p rofessional misconduct it would be obviously nece ssary to deal with him o n that basis and make an appr opriate order under s. 21, sub-s. (3) of the Act. However, since the learned Attorney-General has alternatively urged before us that in confining t he e xercise of disciplinary jurisdiction only to cases o f prof essional misconduct, technical ly so-called, the learned Judges of the Calcutta Hig h Court ha ve misconstrued the re levant provisions of the Act, we propose to deal very briefly with that question also.

Operative decision and relief

89. In Council of ICAI vs. Shri Gurvinder Si ngh & Others (Civil Appeal No. 11034 o f 2018 , dec ided on 16 th November 2018 ), the allegation against the CA i n question was that some 100 shares were transferred by him into his own name. The Disciplinary Committee held that he was guilty of misconduct under Section 21 of the Act. The High Court, ho wever, concluded that the said sa le was a commer cial sale transaction of the CA concerned and it was not in his role as a CA. 90. This was reversed by the Supreme Court on the ground that any act which in the opi nion o f the C ouncil brings disrepute o f the profession, whether or not related to his professional work, shall be liable to be taken action upon . The High Court order was accord ingly reversed and the matter was remanded back to the High Court. The Court held:

7) This being the case, it is clear that the imp ugned judgment is incorrect and must, therefore, be set aside. We thus remand the matter to the High Court to be decided afresh leaving all contentions open to

9. In the result, Crl. A.M.P. No. 751 o f 2014 is allowed and conv iction passed agains t the petitioner/A2 Ch. Ramakrishna Rao b y the trial Court in C.C. No. 4/ 2009 is suspended pending disposal of the appeal.”

the Officer, in this case, was permitted to p ractice as a Chartered Accountant and the de cision of the Board was quashed. The EC tHR also awarded compensation and costs in his favour . However, t he above observations of the ECtHR also make it clear that if a person is convicted for a serious criminal offence, dishonesty or moral turpitude, debarment of such person from practicing as a chartered accountant could be justified. Applicability to the facts of the case 104. The sum total of the scheme of the Act, read along with the judgments leads to the conclusion that in the case of Chartered Accountants the ICAI has the power and discretion to enter into or remove from the Register , the name of any person who s uffers from any disabilities under Sect ion 8 or is gu ilty of professional or other misconduct or an y other circumstances, which as per the Counci l would disentitle the person f rom continuing on the Register .

Ratio and legal principle

The narrow proposition associated with Mohit Bansal v. The Institute of Chartered Accountants of India concerns *mohit bansal vs the institute of chartered accountants of india* *forum-delhi high court* *date- 21st january 2022* *sub-whether a chartered accountant who has committed an offence under ipc 354 , 506-ii relating to outraging modesty of a woman prior to his being enrolled as a member of the institute can be disqualified by the institute of chartered accountants of india u/s 8 of the chartered accountants of india, 1949 and that too after a long period of time?* an interesting question arose in this case where the appellant being a chartered accountant committed offences under *ipc 354 and 506-ii dealing with outraging modesty of a woman during his college days amounting to moral turpitude* and was issued show cause notice by icai for removal of his name under various provisions of the act. the petitioner in this case interalia argued that the offence was committed at a time when he had… The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in W.P.(C) 6819/2020.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Quashed / set aside” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: *Mohit Bansal Vs The Institute of Chartered accountants of India* *Forum-Delhi High Court* *Date- 21st January 2022* *Sub-Whether a Chartered accountant who has committed an offence under IPC 354 , 506-II relating to outraging modesty of a woman prior to his being enrolled as a member of the Institute can be disqualified by the Institute of Chartered Accountants of India u/s 8 of the Chartered Accountants of India, 1949 and that too after a long period of time?* An interesting question arose in this case where the appellant being a chartered accountant committed offences under *IPC 354 and 506-II dealing with outraging modesty of a woman during his college days amounting to moral turpitude* and was issued show cause notice by ICAI for removal of his name under various provisions of the Act. The petitioner in this case interalia argued that the offence was committed at a time when he had… Its practical value lies in the way the Delhi High Court connected the governing provisions—Section 354/506-II of Indian Penal code; 1860 and Section 8 of the Chartered Accountants Act 1949—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of Section 354/506-II of Indian Penal code; 1860 and Section 8 of the Chartered Accountants Act 1949 and the decision date 2022-01-21; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is Mohit Bansal v. The Institute of Chartered Accountants of India, the proceeding is W.P.(C) 6819/2020, and the decision is dated 2022-01-21. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as JUSTICE PRATHIBA M. SINGH. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with Section 354/506-II of Indian Penal code; 1860 and Section 8 of the Chartered Accountants Act 1949. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Quashed / set aside. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• Section 354/506-II of Indian Penal code — apply the exact version considered in the judgment.
• 1860 and Section 8 of the Chartered Accountants Act 1949 — apply the exact version considered in the judgment.

Case network

• Sun Aero Ltd. v. PCIT — Delhi High Court · Quashed / set aside
• Deepak Kapoor v. Principal Commissioner of Income Tax — Delhi High Court · Quashed / set aside
• Ashish Agarwal v. The Institute of Chartered Accountants of India — Delhi High Court · Quashed / set aside
• Sunil Jain v. National Faceless Assessment Centre — Delhi High Court · Quashed / set aside

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