Mahendra Kumar Mahajan v. Icai

JUDGMENT V.K.JAIN. J. (ORAL^

¶1Thepetitionerbeforethis Courtwas enrolledas a memberofthe respondent-Institute of Chartered Accountant of India (ICAI). Pursuant to a complaint received against him, the DisciplinaryCommittee of ICAI found the petitioner guiltyof misconductand vide orderdated 01.02.2012,the DisciplinaryCommittee orderedremovalof the name of thepetitionerfrom the Registerof Members,for a period of one year. Being aggrievedfrom the order passed by the Disciplinary Committeeof ICAI, the petitionerpreferredan appealwhich cameto be dismissed by the Appellate Authority vide order dated 17.07.2012. The petitionerthen preferred a writ petition, challenging the orders passed by the Disciplinary Committeeas well as the order passed by the AppellateAuthority. Vide order dated 14.08.2012, this Court reduced the term of removal of the name of the petitionerfrom the Registerof Membersfrom one year to six months. Vide letter IV.P.(C) 4840/2013 Page1 of5 dated 28.02.2013,the petitioner,claimingthat the periodof six months was over, sought restoration of his name back in the Register of Members. This was followed by various reminders to ICAI. The petitioneralso depositedthe fee towards restoration of his name to the Register of Members. Vide notification dated

25.07.2013,the respondent-ICAInotifiedthatthe name of the petitionershallstand removediBromthe Register of Membersfor a period of six months with effect from

01.08.2013. Being aggrieved from the aforesaid notification, the petitioner is before this Court by way of this writ petition.

¶2The contention of the learned counsel for the petitioner is that since the penaltyis modifiedby this Courthas alreadybeenundergoneby the petitioner,the notificationdated25.07.2013is liableto be quashedand thename of thepetitioner needs to be restored to the Register of Members. Per contra, the contention of the learned counsel for the respondent that the petitioner has not undergone the penalty, which would start operating only with effect from 01.08.2013 when the nameofthepetitionershallstandremovedfrom theRegisterofMembeirs.

¶3Regulation18 of ICAI'Regulations,to the extentit is relevant,providesthat the removal,of a member's name from the Registershall be notifiedin the Gazette of Indiaandshall also be communicatedin writingto him. It fiirtherprovidesthat the Councilmay, on an applicationin the appropriateForm, receivedin tHis behalf frbm a memberwhosenamehas beenremovedfrom theRegister,restorehisname, if he is otherwise-eligible to such membership. Regulation 20 of the aforesaid Regulationsprovidesthat restoratioliofamember'sname to the Registershall be notifiedinthe Gazetteof Indiaarid shallalsobe communicatedinwritingto him.

¶4A carefril perusal of the aforesaid order dated 01.02.2012 would show that the Disciplinary Committee, by virtue ofthat order, ordered removal of the name of the petitioner from the Register of Members for a period of one year.' The said order by itself did not remove the name of the petitioner from the Register of W.P.(C)4840/2013 • Page 2 of5 •r > Members and was requiredto be executedby the office of ICAI. The penalty j awardedto the petitioner,therefore,beginsto operateonly from the date his name'^^ is actually removed from the Register of Members. The order passed by the DisciplinaryCommitteedid not havethe effectofdisqualifyingthe petitionerfrom practicingas a CharteredAccountant.He would standdisqualifiedfrom practising as a CharteredAccountantonly from the date his name is actuallyremovedfrom the Register of Members, in executionof the..orderpassed by the Disciplinary Committee.This, accordingto the learnedcounselfor the respondent,has always beenthe understandingand interpretationof ICAI and I see nogood reasonfor not acceptingthe interpretationgiven by the respondentso long as the order is to be operating from the date of notification. In fact, in his applicationfiled under Section151 of CPC filed inthe earlywritpetition,seekingstay ofthe operationof the order dated 01.02.2012,the petitionerhimselfstated as under:- "3. The Petitioner, however, submits that to the best of his knowledge in pursuance to the order dated

01.02.2012as well as dated 17.07.2012dismissinghis appeal, the necessary notification as to the date on which the order of 01.02.2012shall come into operationis yet to be decided and issued by the RespondentNo. 1/ICAI. That, however, in case the operation of the impugned order of 01.02.2012 is not stayed, pending the present Writ Petition, the Petitionershall suffer an irreparable loss & injury which cannot be compensatedin terms of money." In view of the standtakenbythe petitionerin the aforesaidapplication,it is not open to him to now say that the order dated 01.02.2012came into operation, the moment it was passed. The understandingof the petitionerthus was that the orderbecomesoperativeonly on issueof notificationin terms of Regulation18 of ICAI Regulations. ff'.P.(C) 4840/2013 Page3 of5

¶5The petitioner submitted an application to the PIO of ICAI under Right to Information Act, seeking information as to whether his name has been restored to the Register of Members and if not, the reasons thereof. It was clearly stated in the reply sent to him that he would be eligible to get his name restored after six months from the date mentioned in the removal notification in the Gazette. Thus, it has been the consistent stand of the respondent that the order imposing penalty of removal of the name from the Register of Members comes into force only from the effective date, indicated in the Gazette Notification issued under Section 18 of ICAI Regulations.

¶6Considering the order passed by the Disciplinary Authority, which was not interfered by this Court, except to the extent of reducing the period of removal from one year to six months, I am of the considered view that the said order comes into force only from the date it is notified in the Gazette and not from the date on which it is passed. However, in my view, the respondent, while publishing the Gazette Notification in terms of Regulation 18 cannot make the removal effective from a future date. The removal comes into force the moment the Gazette Notification under Regulation 18 of ICAI Regulations is published. Therefore, the penalty imposed upon the petitioner became operational on 25.07.2013.

¶7During the course of arguments, the learned counsel for the petitioner referred to the decision of Supreme Court in Raiinder Sineh v. State of Harvana and others AIR 2005 SC 504. The Apex Court in that case was concerned with interpretation of Section 4 of Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act. Under Section 4(1) of the said Act provides that an area becomes a controlled area by the Government declaring it to be so by a notification under the said provision. Sub-section (2) of the said Section provides that the Government shall cause the contents of the declaration under sub section (1) to be published in newspapers. The contention of the appellants before W.P.(C) 4840/2013 Page 4 of5 Supreme Court was that so long as the declaration notified in the Gazette Notification is not followed by a publication of the contents of that declaration in two languagenewspapers, the declaration of the controlled area does not come into force and consequently, the area could not be deemed to be a controlled area. The High Court held that it was not possible to accept the contentionthat the delayed publication of the declaration under sub-section (2) of Section 4 would affect the declaration under sub-section (1). The Court rejected the contention that the declaration under sub-section (1) remained inchoate for want of publication in newspapers. The Apex Court did not interfere with the view taken by the High Court in this regard and also held that Section 5(1) and 7(1) of the said Act spoke only of publication of notificationunder sub-section(1) and not the publicationof contents of the declaration in terms of sub-section (2) of Section 4 of the Development Act and, therefore, the requirement of sub-section (2) was not mandatory. The aforesaid decision has no applicability to the case before this Court, considering the nature of the order passed by the Disciplinary Authority and the interpretation of the said order given by the respondent as also by the petitioner in his applicationunder Section 151 of CPC in the earlierwrit petition filed by him.

¶8For the reasons stated hereinabove, the writ petition stands disposed of with the direction that the order of removal of the petitioner from the Register of Members shall become operative with effect from 25,07.2013, the date on which notification under Regulation 18 was issued by the respondent. V.K. JAIN, J JULY 31,2013 V . bg 'T' ^ W.P.(C) 4840/2013 Page5 of5 IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C)4840/2013 + MAHENDRAKUMARMAHAJAN Petitioner Through: None. versus Respondent Through: Mr.RakeshAgarwal&Mr.PulkitAgarwal, Advs. CORAM; HON'BLEMR. JUSTICEV.K. JAIN % ORDER

10.12.2013 r.MNo.14840/2013(forclarificationoforderdated31.7.2013), Videorderdated31.7.2013,thisCourtinteraliaheldas under; "2 The contentionof the learned counsel for the petitioneris that sincethe penaltyis modified^y.f ^ ^as^rt undergoneby the petitioner,the notificationdated 25.07^2013is TabS to be quashedand the name of the petitionerneeds to ^ restoredto theRegisterofMembers. Per contra,the contentionof S learnedcounsd for the respondentthat theP—" undergone the penalty, which would start operatingo y effectfrom 01.08.2013whenthenameofthepetitionershall removedfromtheRegisterofMembers. Consideringthe orderpassedby the DisciplinaiyAuthority which w" not iLferedby this Court, exceptto the ex ent of reducingthe periodofremovalfirolnone yearto six months,la of consid^dview that the said order comes into force only from the date it is notified in the Gazette and not from the date on which it is passed. However, in my view, the respondent,while publishing the Gazette Notificationin terms of Regulation 18 cannot make the removal effective from a friture date. The removal comes into force the moment the Gazette Notification under Regulation18 of ICAI Regulationsis published. Therefore,the penalty imposed upon the petitioner became operational on

25.07.2013. D

¶8For the reasons stated hereinabove, the writ petition stands disposed of with the directionthat the order of removal of the petitionerfrom the Registerof Members shall become operative with effect from 25.07.2013, the date on which notification under Regulation18 was issuedbythe respondent." It would, thus, be seen that the aforesaid order dated 31.7.2013 proceeded on the basis that the Notification,removing the name of the petitioner,was issued on 25.7.2013. The contentionof the respondent-Institute of Chartered Accountants of India is that the Notification came to be publishedonly on 1.8.2013and the communicationdated 25.7.2013was onlyaletterto the petitionerinforminghim thatthe periodofremovalofhis name from the registerof membershad been reducedfrom one year to six months. It was also stated in the said letter that a copy of the Notification for removalof the name of the petitionerfrom the registerof membersfor a period of six months was being publishedin the OfficialGazetteofIndia extraordinaiy.The copy enclosedto the said communicationwas also dated

25.7.2013. However,as wouldbe evidentfrom the GazetteNotification,it cameto be publishedin the OfficialGazetteonly on 1.8.2013. SinceI have taken a view that the order removingthe name of the petitionerfrom the register of members comes into force from the date it is notified in the Gazette and not from the date on which it is passed, it is quite clear that the said removal came into force on 1.8.2013. Ordered accordingly. The application stands disposed of DECEMBER 10, 2013 b 'nesh

V.K. JAIN, J.

# * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 31.07.2013 + W.P.(C) 4840/2013 MAHENDRA KUMAR MAHAJAN Petitioner Through: Ms Vibha Mahajan Seth, Adv. versus ICAI Respondent Through: MrRakeshAgarwalandMrPulkitAgarwal, Advs. CORAM: HON'BLE MR. JUSTICE V.K.JAIN