Chartered Accountants Act, 1949 - Sections 7, 22 and 24A - Chartered Financial Analyst (C.F.A.) Course/Programme offered by a registered society - Council of Institute of Chartered Accountants of India issuing notification prescribing that its members i.e. Chartered Accountants (C.A.), who had obtained qualification from that Society, if they did not surrender same by a prescribed date, they would be guilty of professional misconduct under the Act - Correctness of - Held - Functions of C.F.A. were altogether different from those of a C.A., and did not include those in exclusive domain of latter - Similarly in designation on premise that three papers taught by Institute were also taught by Society was immaterial - Society did not commit offence under Section 24A(1) of awarding degree similar to that of Institute, and award of qualification by it could not be said to be nullity - Section 7 only debarred member of Institute from using a qualification; it did not prohibit C.A. from acquiring a qualification - Acquisition of a qualification being an inherent and human right, it could not prohibited except by a statutory interdict - Use of same as permitted by Section 7 was not per se illegal, and no misconduct arose as a result thereof-Section 24A could not be read with Section 7, and being a penal provision, had to be construed strictly - Otherwise too, notification was impermissible as professional misconduct having been defined under Section 22, a statutory authority could not transgress its authority to say by an administrative order that acquisition of a qualification by a member of Institute shall itself constitute a misconduct - Notification issued by Council, being a law within meaning of Article 13(3)(a) of Constitution, 1950 and violative of Articles 14 and 19(1)(g) thereof is quashed.

Words and phrases - Any other qualification that he may possess - In context of Section 7 of Chartered Accountants Act, 1949.

Words and phrases - Misconduct - In context of Section 22 of Chartered Accountants Act, 1949.

Appellant is a registered Society offering the Chartered Financial Analyst Course/Programme. Respondent issued a notification prescribing that if any of its members i.e. any Chartered Accountant, had obtained the qualification from appellant and did not surrender the same by a prescribed date, they would be held to be guilty of professional misconduct under the Chartered Accountants Act, 1949. Aggrieved by this, appellant filed a writ petition before High Court, but same was dismissed. Hence the present appeal.

Appellant contended that (i) the notification issued by respondent was violative of fundamental rights under Articles 14 and 19(1) (g) of the Constitution of India, 1950; (ii) second part of the proviso 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 Chartered Accountant from them being a matter of statutory right, it cannot be taken away by a delegated notification.

Respondents contended that (i) under Section 7 of the Act, a Chartered Accountant was prohibited from using any other description, whether in addition thereto or in substitution thereof; (ii) 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'; (iii) proviso to Section 7 permits addition of a description or letters to name to indicate membership of another Institute of Accountancy, only if that other Institute, has been recognized by them and not otherwise; (iv) 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; (v) the proviso cannot be so construed as to nullify completely the prohibition in the opening part of Section 7; (vi) their view that appellant is an institute of accountancy should not be interfered with by the Court having regard to their expertise in the field of accountancy in general; (vii) item No. (1) of Part II of the Second Schedule of the Act makes contravention of any provision of the Act or of the regulations made there under, amount to a misconduct.