Disgraceful Conduct of the Institute of Chartered Accountants of India

 

Introduction

 

Today we will discuss a judicial pronouncement by the High Court of Judicature for Rajasthan, Risha Lodha v. Institute of Chartered Accountants of India, S.B. Civil Writ Petition no. 6261 of 2021, wherein the story of gross injustice against a CA aspirant was unfolded by the Court.

 

Facts in Brief

 

The Petitioner was a Chartered Accountancy (CA) aspirant. On 20.11.2020, concerned with the pandemic situation, she wrote an Email to the functionaries of the Institute of Chartered Accountants of India (ICAI) cautioning that if the CA Exams are held during the time of Covid-19 pandemic, it will lead to exponential growth in number of Covid cases and sought development of online infrastructure for conducting CA Exams.

 

Later on, during 22.01.2021 to 07.02.2021, she had appeared for Intermediate Exams of CA. On 22.02.2021, she received an Email from ICAI informing that her result had been put on hold because of the derogatory remarks made by her in the Email dated 20.11.2020 and she was asked to explain why disciplinary proceedings should not be initiated against her. The Petitioner immediately issued an unconditional apology on 22.02.2021 itself whereafter she was asked to personally appear before the Examination Committee of ICAI on 10.03.2021 at Jaipur. She appeared on the said date but the Order/Result of the same was not informed to her. When the results were announced on 26.03.2021, the Petitioner found out that her result was cancelled under caption “ADOPTED UNFAIR MEANS. LETTER FOLLOWS.”

 

On 30.03.2021, the Respondents (ICAI) informed her that she was guilty of making derogatory remarks in the captioned examination and therefore, her result was cancelled. Hence, a Petition was preferred before the Hon’ble High Court of Judicature for Rajasthan.

 

Arguments of the Petitioner

 

1. The action of the Respondents is against Regulations 41 and 176 of the Chartered Accountants Regulations, 1988 (in short, “CA Regulations”) as the Examination Committee can adjudge conduct of a candidate in or near an Examination Hall only whereas the Letter dated 20.11.2020 was written months before the Exam and not during the time of the Exam.

 

2. The Email dated 20.11.2020 cannot be said to be derogatory. Though there were certain strong remarks, yet the same were only due to the anxiety of the Petitioner to request the ICAI to develop online infrastructure.

 

3. The Reply to the Email dated 22.02.2021 by the Petitioner is reflective of the pressure that she is facing from the ICAI.

 

4. The ICAI failed to show grace and despite nothing derogatory in the Email dated 20.11.2020, it did not close the matter.

 

5. The phrase “adopted unfair means” was prima facie factually incorrect and only shows the vindictiveness of the ICAI.

 

Arguments of the Respondents

 

1. There is an efficacious alternative remedy of filing a review before the Council against the decision of the Examination Committee. Hence, the Writ Petition is not maintainable.

 

2. The cancellation of result has not been challenged and hence, the relief of declaration of result is not maintainable.

 

3. There was disorderly behaviour on part of the Petitioner and doubts should not have been raised with respect to Institute’s preparation in conducting the exams.

 

4. The Email dated 20.11.2020 related to exams and hence, the Examination Committee had jurisdiction to look into the matter.

 

Observations of the Court

 

The Court observed that the initiation of proceedings against the Petitioner were without jurisdiction, arbitrary, capricious and against the principles of natural justice. It was further observed that the Email dated 20.11.2020 was addressed to the office bearers of the ICAI and not to the Examination Committee.

 

It was the opinion of the Court that the Email contained nothing derogatory and any action in this regard is unwarranted, uncalled for and high-handed. The Court also stated that the Institute of Chartered Accountants of India pushed the Petitioner to brink and subjugated her to the extent that she had to write in her Reply that she is ashamed of herself.

 

The Court found it disturbing that the Petitioner was personally heard on 10.03.2021, yet no order was ever communicated to her, and her exam result was cancelled in an arbitrary manner vide Communication dated 30.03.2021.

 

Regarding existence of alternate remedy, the Court observed that availability of alternate remedy is a rule of discretion and the present case smacks of abuse of authority leading to infringement of fundamental rights of the Petitioner. According to the Court, the conduct of the Respondents is such that the alternate remedy was “to challenge Caesar’s order before Caesar’s wife” and cancellation of Petitioner’s result “is nothing short of colourable exercise of powers.”

 

A Notice dated 22.11.2020 was also sent to the Petitioner wherein it was stated that the Petitioner is to refrain from addressing any such communication (like the Email dated 20.11.2020) to any body failing which the ICAI shall be constrained to initiate appropriate legal proceedings against her. Hence, according to the Court, the Respondents were estopped from initiating any action against the Petitioner since she did not make any communication as they had asked for.

 

The Court also cited the case of Gorkha Security Services v. Govt. of NCT, Delhi, (2014) 9 SCC 105, wherein it was held that “a show cause notice should necessarily state the action which is proposed to be taken against the noticee.” Since such mandate was also not followed by the ICAI; therefore, the impugned Order of cancelling the result was held to be illegal.

 

Going into the question that whether the ICAI could still initiate disciplinary proceedings against the Petitioner, it was held by the Court that as per Regulation 41 of the CA Regulations, the Examination Committee could act only “if a candidate behaves in a disorderly manner in or near an examination hall or has resorted to unfair means.” Such was clearly not the case and hence, the proceedings were void ab initio.

 

The Court also found that the Petitioner had cleared the CA Intermediate Examination. Thus, the Writ Petition was allowed by the Court.

 

Concluding Remarks

 

This case reflects the high-handedness with which the authorities work in general. Be it professional bodies like the ICAI or be it any other authority, the entire system seems to have become rotten and stale. The mentality of the persons officiating on high posts has become menial and deprecating. Many public servants consider themselves to be nothing less than a demigod and suffer from God’s Syndrome.

 

I think it is high time that such pathetic officers are stripped of their ranks and services. But who will do it when from the top to the bottom, the entire system has become crooked? Suppressing the voices of the people is a task in which the authorities of present day excel at. It is most depressing to see that for trivial issues where one is not even at fault, the Courts are to be approached.

 

Justice is truly a rare commodity these days and for seeking every kind of justice, usually, one has to approach the Courts, and nothing could be expected from the authorities in this regard. Not everybody is so well-informed or resourceful to afford an advocate of their choice or let alone know about their rights. People usually do not approach the Courts out of fear of vindictive attitude of the authorities.

 

I am glad the Petitioner in the present case knocked the doors of justice and got what rightfully belonged to her. All I can say is that don’t be afraid. Times are such that people will have to fight for their rights. We are being pushed to the brink but don’t be afraid, the truth shall prevail.