The Delhi High Court has clarified that the scope of judicial review under Article 226 of the Constitution is limited to examining the legality of the decision-making process, and the High Court does not sit in appeal over orders passed by statutory authorities such as the ICAI Board of Discipline. The Court said that where the Board of Discipline has appreciated the evidence on record and arrived at findings of fact, the High Court cannot reappreciate the evidence merely because another view may be possible.
The High Court ruled that absence of a fiduciary or professional relationship between the complainant and the Chartered Accountant, though not by itself a bar to invoking Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949, becomes a material consideration where the Director (Discipline) proceeded on the very premise that such a relationship existed. Hence, the pendency of criminal proceedings does not, by itself, oust the disciplinary jurisdiction of the Board of Discipline. However, the Board may close the complaint where the allegations are not supported by cogent evidence to sustain a finding of misconduct.
Allegations of professional misconduct must be evaluated on the basis of cogent material establishing mala fide intent or deliberate facilitation, and the Board is entitled to take into account the surrounding circumstances, including the relationship between the parties and the context in which the alleged conduct occurred, added the Court.
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A Single Judge Bench of Justice Amit Mahajan noted that the Board, upon consideration of the material before it, took into account the circumstances in which the laptop came to be used and specifically noted that Respondent No. 2 was unaware of the matrimonial dispute between the petitioner and his wife at the relevant time. The Board accordingly found that the material did not justify an inference of mala fide intent or deliberate facilitation, and since the Board arrived at these findings after appreciating the evidence on record, the Court in exercise of its jurisdiction could not reappreciate evidence merely because another view may be possible.
The Court further observed that the Board took into account that the parties had no professional relationship and that the allegation of Respondent No. 2 being the petitioner’s tax consultant was denied by both parties. The Director (Discipline), while giving its prima facie opinion, had proceeded on the basis that Respondent No. 2 was the petitioner’s tax consultant, whereas such relationship was denied by both parties.
The Court noted that while the absence of a fiduciary relationship may not, by itself, exclude the applicability of Item (2) of Part IV of the First Schedule, once the Director (Discipline) has given its prima facie opinion of guilt proceeding on the premise of a fiduciary relationship existing between the parties, the absence of such relationship assumes significance in establishing that the Director (Discipline) erred in making the prima facie opinion of guilt.
On the issue of pending criminal proceedings, the Court observed that their pendency did not, by itself, oust the Board’s disciplinary jurisdiction. However, the Board had not merely exonerated Respondent No. 2 because criminal proceedings were pending but had specifically observed that the allegations were not supported by cogent evidence so as to punish Respondent No. 2 for misconduct.
Briefly, the petitioner, Shekhar Sharma, filed a complaint before the Institute of Chartered Accountants of India (ICAI) against Respondent No. 2, a Chartered Accountant, alleging that Respondent No. 2 had facilitated unauthorised access to and alteration of the petitioner’s Income Tax account. The Director (Discipline), upon consideration of the complaint and the material on record, formed a prima facie opinion holding Respondent No. 2 guilty of ‘Other Misconduct’ under Section 22 read with Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. However, the Board of Discipline did not concur with the said opinion and closed the complaint.
The petitioner thereafter approached the Delhi High Court on two earlier occasions. The Co-ordinate Bench noted that the earlier decision of the Board did not furnish any reasons for disagreeing with the Director (Discipline) and directed Respondent No. 1 to furnish reasons. The another Co-ordinate Bench set aside the earlier decision and remanded the matter for fresh consideration, observing that Respondent No. 2 was unable to refute the finding of unauthorised access to the petitioner’s personal information, and that the mere fact that the complaint related to a family dispute could not be a ground to reject allegations concerning violation of statutory norms. Pursuant to the remand, the Board again declined to concur with the prima facie opinion and closed the complaint by its decision taken in the 391st Meeting.
