# H. A. K. RAO, CHARTERED ACCOUNTANT v. COUNCii. OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, NEW DELHI December 13. 1966

- **Citation:** [1967] 2 S.C.R. 256
- **Court:** Supreme Court of India
- **Decided:** 1964-02-22
- **Bench:** K. SUBBA Rt, J. C. Shah, S. M. Sikri, V. Ramaswa!\11, C. A. Yaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/h-a-k-rao-chartered-accountant-v-councii-of-institute-of-chartered-accountants-3934
- **Pages:** 9

## Headnote

Chartered Accou11ta11ts Act 1949-ClatH_e
(ii~, P«rf J.', SC'co_r;d Scltedule-Cnuncil's polver 10 specify a"y act or omilorlon other thaJJ those
coi•ered by Act or ReRulations as 'professional mlsconduct'-scope of.
The •Council of the Institute of Chartered Accountants, by a notification issued on February 22, 1964. in exCrcisc of powers confrrred by
cl. (ii) of Part II of the Second Schedule to the Char1ercd Accountants
Act, 1949, notified, intn- alia,
that a member of the Institute shall
be deemed to be guilty of miscvnduct ir. in
con1l\!~tio1t v.·i;h elections
to the Councils of the Institute, he took pan directly or indirectly in
( 1) issuing manifestoc:s or circulars~ (2) canvassing votes by visiting
places of business or residence of the voters or in any othci· manner.
The appellant, who was a prospective candidate for election to the
Central Council of the Institute, filed a writ petition 10 quash the notification. It wa• contended on his t>.half that the power of the Council
to issue a notification i• limited by the express provisions of cl. (ii) of
Parf II of the Second Schedule to rhe Act. Under cl. (i) any contravention of the provisions of the Act or of the Regulations made thereWlder
was erofessional misconduct; therefore the expression "other act or omission" in cl. ('i) must be an act or omission other than tbooe covered by
the Act or the Rcgulatiott<.
Under cl. ( 2) of Regulation 54-A. undue
influence by interfering with the free exercise of any electoral rights
wa• misconduct, but the provi•o to cl. (2) which permitted a declaration of policy or • promise of a particular action saved the muing of
manifestoes and circulars from the operation of the substantive pan of the
clau•e.
The appellant therefore claimed that he had a legal right to
issue circulars or manifcstoe; "'·ithin the meaning of the proviso and
that the impugned no1ification hc;ng in tlcrogation ..:l :r.c
R:--&ill~tion.
was illegal.
It was further contended lh<1t the notification was inconsi!tent with
cl. (48) of Regulation 54A. bec;iuse rhat clause only prohi1'ited canvassing for voles within a distance of 200 meters from the polling hoolhs,
thereby impiedly permitting canvassing beyond that dh;iance; cl. (48)
detracted only ;o a limited extenr from the leJ?I right to canvass and
the impugned notification contain!ng a prohibition against general canvassing beyond these limits contravened hoth cl. (2) and cl. (48) of
Regulation 54-A and was therefore bad
The High Court held that the impugned notification in so far as it
d.- .~led that the issuing of manife:;toes or circulars was misconduct. was
ii: · '1; but that the rest of it was va'.;d. On appeal to rhi. Court by the
"l'. ,:1lant and upon a cross-appeal hy the r~pondcnt.
HELD : The entire notification was valid.
Although the act of issuing a manifesto or a circular would not amount
lo undue influeocc by virtue of the proviso to Regulation 54-A(2) such
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H. A. K. RAO v. COUNCIL, I.C.A.I. (S11bba Raa, C.J.)
257
ac:t was constituted by the notification a different head of professional misconduct which the Council was authorised to do under cl. (ii) of Part II
of the Second Schedule to the Act. (263 HJ
The Council had the power to issue the notification prohibiting canvassing of votes and the notification was not inconsistent with either the
provisions of the Act or the Regulations. [263 FJ
While the Regulations provide for discinlinary action for undue inftuence and for canvassing for votes within a distance oi 200 meters
.from a _eolling booth, the notification placed
other acts and omissions
under r'ifferent heads of misconduct. There is no inherent conflict between undue influence, canvassing of votes by visiting the places of business or the residence of the voters, and canvassing within a distance of
200 metres from a
polling
booth.
All the three can stan<i
together.
(262 HI
The appellant did not have any unlimited right to canvass for votes
either statutoty ·o

## Text

H. A. K. RAO, CHARTERED ACCOUNTANT
v.
COUNCii. OF INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA, NEW DELHI
December 13. 1966
[K. SUBBA Rt.,, C.J., J. C. SHAH, S. M. SIKRI, V. RAMASWA!\11
AND C. A. YAIDIALINGAM, JJ.]
Chartered Accou11ta11ts Act 1949-ClatH_e
(ii~, P«rf J.', SC'co_r;d Scltedule-Cnuncil's polver 10 specify a"y act or omilorlon other thaJJ those
coi•ered by Act or ReRulations as 'professional mlsconduct'-scope of.
The •Council of the Institute of Chartered Accountants, by a notification issued on February 22, 1964. in exCrcisc of powers confrrred by
cl. (ii) of Part II of the Second Schedule to the Char1ercd Accountants
Act, 1949, notified, intn- alia,
that a member of the Institute shall
be deemed to be guilty of miscvnduct ir. in
con1l\!~tio1t v.·i;h elections
to the Councils of the Institute, he took pan directly or indirectly in
( 1) issuing manifestoc:s or circulars~ (2) canvassing votes by visiting
places of business or residence of the voters or in any othci· manner.
The appellant, who was a prospective candidate for election to the
Central Council of the Institute, filed a writ petition 10 quash the notification. It wa• contended on his t>.half that the power of the Council
to issue a notification i• limited by the express provisions of cl. (ii) of
Parf II of the Second Schedule to rhe Act. Under cl. (i) any contravention of the provisions of the Act or of the Regulations made thereWlder
was erofessional misconduct; therefore the expression "other act or omission" in cl. ('i) must be an act or omission other than tbooe covered by
the Act or the Rcgulatiott<.
Under cl. ( 2) of Regulation 54-A. undue
influence by interfering with the free exercise of any electoral rights
wa• misconduct, but the provi•o to cl. (2) which permitted a declaration of policy or • promise of a particular action saved the muing of
manifestoes and circulars from the operation of the substantive pan of the
clau•e.
The appellant therefore claimed that he had a legal right to
issue circulars or manifcstoe; "'·ithin the meaning of the proviso and
that the impugned no1ification hc;ng in tlcrogation ..:l :r.c
R:--&ill~tion.
was illegal.
It was further contended lh<1t the notification was inconsi!tent with
cl. (48) of Regulation 54A. bec;iuse rhat clause only prohi1'ited canvassing for voles within a distance of 200 meters from the polling hoolhs,
thereby impiedly permitting canvassing beyond that dh;iance; cl. (48)
detracted only ;o a limited extenr from the leJ?I right to canvass and
the impugned notification contain!ng a prohibition against general canvassing beyond these limits contravened hoth cl. (2) and cl. (48) of
Regulation 54-A and was therefore bad
The High Court held that the impugned notification in so far as it
d.- .~led that the issuing of manife:;toes or circulars was misconduct. was
ii: · '1; but that the rest of it was va'.;d. On appeal to rhi. Court by the
"l'. ,:1lant and upon a cross-appeal hy the r~pondcnt.
HELD : The entire notification was valid.
Although the act of issuing a manifesto or a circular would not amount
lo undue influeocc by virtue of the proviso to Regulation 54-A(2) such
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H. A. K. RAO v. COUNCIL, I.C.A.I. (S11bba Raa, C.J.)
257
ac:t was constituted by the notification a different head of professional misconduct which the Council was authorised to do under cl. (ii) of Part II
of the Second Schedule to the Act. (263 HJ
The Council had the power to issue the notification prohibiting canvassing of votes and the notification was not inconsistent with either the
provisions of the Act or the Regulations. [263 FJ
While the Regulations provide for discinlinary action for undue inftuence and for canvassing for votes within a distance oi 200 meters
.from a _eolling booth, the notification placed
other acts and omissions
under r'ifferent heads of misconduct. There is no inherent conflict between undue influence, canvassing of votes by visiting the places of business or the residence of the voters, and canvassing within a distance of
200 metres from a
polling
booth.
All the three can stan<i
together.
(262 HI
The appellant did not have any unlimited right to canvass for votes
either statutoty ·or otherwise. His rights were defined by tbe statute and
it could not be said that such an unlimited right to canva5" is implicit
in the right to stand for election. [263 BJ
The electorate was an enlightened body and the elections were to a
oouncil designed to maintain high standards of the profession.
Canvassing may be necessary for explaining to an illiterate voter the qualifications
of a candidate and the principles· for which he stands or in the case of a
vast electorate with which the candidate may not be familiar, but no such
necessity exists in the case of enlightened voters of a compact electorate.
The impugned notification was n<>t therefore unreasonable in the -
that expression :, understood in law. [263 CJ
[The question whether the notification was violative of Article 19 of
die Constitution and whether that Article could be invoked notwithstanding the fact that a state of emergency was in force,
was
left open.]
[259 A-BJ
C!v!L APPELLATE JURISDICTION : Civil Appeals Nos. 447 and
501 of 1965.
Appeals by special leav~ .from the judgment and order dated
July 2, 1964 of the Mysore '; gh Ccmrt i!1 Writ Petition No. 473
of 1964.
K. Srinfrasan and R. Gopa/akrishnan, for the appellant (in
C. A. No. 447 of 1965) and the respondent (in C. A. No. 501 of
1965).
M. C. Setalvad, K. K. Jain and H. K. Puri, for the respondent
(in C. A. No. 447 of 1965) and the appellant (in C. A. No. 501 of
1965).
The Judgment of the Court was delivered by
Subba Rao, C. J. T.hese are cross-appei:ls-the appeal has
been filed by H. A. K. Rao, a Chartered Accountant, and the
cross-appeal has been filed by the respondent therein-against the
judgment and order of the Mysore High Court passed in Writ
Petition No. 473 of 1964 filed by the former challenging the validity
of the notification issued by the latter tegulating the conduct of
elections to the '.::entral Council and the Regional Councils of the
Institute of Chartered Accountants of India.
M lSup.Cl/67-3
258
SUPllBMB COUllT
l.EPOl.TS
(1967) 2 s.c.a.
The facts are not in dispute and they may be briefly stated.
H. A. K. Rao, the appellant in Civil Appeal No. 447 of 1965, is
a cha1 tered accountant by profession and is a fellow member of
the Institute of Chartered Accountants of India, hereinafter referred
to as the "Institute". The election to the Central Council and the
Regional Councils of the Institute was to take place in the month
of August, 196"
On February 22, 1964, the President of the
Institute issued a notification in exercise of the powers conferred
by cl. (ii) of Part II of the Second Schedule to The Chartered Accoi:ntants Act, 1949 (38 of 1949). hereinafter callei' the Act, notifying that a member of the Institute shall be deemed to be guilty
of misconduct, if, in connection with election to the Councils of
the Institute, he was found to have taken part, directly or indirectly,
either himself or through any other person, in any of the following
activitic<;:-{I) issuing manifestoes or circulars; (2) canvassing votes
by visiting places of business or residence of the voters or in any
other manner; and (3) organising parties to entertain voters. The
appellant in Civil Appeal No. 447 of 1965 was a prospective candidate for the Central Council of the Institute. He filed the aforesaid
writ petition to quash the said notification on various grounds,
which we will consider in the course of the judgment. The High
Court held that the impugned notification, in so far as it directed
that issuing of manifestoes or circulars was misconduct was illegal
and that that part of the notification in so far as it directed canvassing of votes was misconduct was valid. Both the parties are
challenging tile said order in so far as it is against each of them.
Mr. K. Srinivasan, learned counsel for the appellant in Civil
Appeal No. 44 7 of 1965, attacked the validity of the notification
on three grounds, namely, (I) it was beyond the competence of
the Central Council, (2) it purported to amend the Regulations,
(3) it was in conflict with the Regulations, and (4) it was in violation of els. (l)(a) and (I)(g) of Art. 19 of the Constitutio:'..
Mr. M. C. Setalvad, appearing for the Institute, canvassed. the
correctness of the order of the High Court in so far as it held that
•he issuing of manifestoes and circulars was illegal. 'te contended
that the impufned notification was well within the competence of
the Institute and was not in conflict with any of the Regulations,
but it was really an additional head of disqualification introduced
by the Institute in the interests of r.;aintaining high standards in
the profession.
\t the outset it may be menciJned that the appellant in Civil
Ap~ .~I No. 447 of 1965 did not seek to sustain his claim on the
basis of his fundamental right presumably in view of the fact that
its operation was and is suspended under Art. 358 of the Constitution during the emergency, though he sought to draw an anology
on the provisions of Art. 19 and the decisions thereon in support
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H. A. K. P.AO v. COUNCIL, !.C.A.L (Subba Rao, C.l.)
259
of his contentions. We do not propose to express any opinion
either on the question whether Art. 19 of the Constitution can be
invoked in the instant case notwithstanding the fact that the state
of emergency is in force or on the question whether the Institute
is a State within the meaning of Art. 12 of the Constitution. We
put aside Art. 19 altogether, as the appellant did not rely upon it
and proceed to consider his other arguments.
•
Before we consider the relevant provisions of the Act it is
necessary to notice at the outset the nature and the objects of the
Institute. The Institute is a statutory body having perpetual
succe~sion and a common seal. It is governed by the Act and the
Chartered Accountants Regulations, 1949, hereinafter. called the
Regulations. The Central Council of the Institute shall be composed
of not more than 24 members elected by the members of the Institute from among the fellows thereof and 6 persons nominated by
the Central Government. There are Regional Councils which
function in their respective regions subject to the control, supervision and direction of the Central Council or any of its committees.
Elections to the Councils are held once in three years. Therefore,
the Act, thr ;iugh its provisions, regulates the profession of chartered
accountants. It establishes a·1 Institute of Chartered Accountants
and provides for the constitution of a Council for carrying out the
objects of the Act. The Central Council, inter alia, has the power
to admit members to the Institute, to take disciplinary action, and
to regulate and maintain the status and standard of the ;:irofessional
qualifications of the members of the Institute. It is needless to
say that the profession of chartered accountant is a respectable one
and the duties of chartered accountants are onerous and responsible.
Tuey are all educated and qualified men and on their efficiency and
integrity depends the stability of many of the institutions in the
country. It cannot, therefore, be gainsaid that the candidate~
seeking to become members of the said Council which regulates
the conduct of chartered accountan•s shall necessarily be persons of
high integrity and above criticism.
With this background we shall now proceed to consider the
arguments raised in the appeals.
•
To appreciate the contentions of the parties it will be convenient to collect at one place the relevant provisions of the Act
and the Regulations.
The Act
Section 22. For the purpose of this Act, the expression
"'professional misconduct" shall be deemed to include any
act or omission specified in any of the Schedules, but
nothing in this section shall be construed to limit or
.abridge in any way the pGwer conferred or duty cast on
260
SUPREME OOURT REPORTS
(1967) 2 s.c.a.
the Council under sub-s...--ction (I) of section 21 to inquire
into the conduct of any member of the Institute under
any other circumstai1ces.
Sec1io11 30 (I). The Council may, by notification in
the Gazette of India, make regulations for the purpose of
carrying out the objects of this Act, and a copy of such
regulations sh~ll be sent to each member of the Institute.
(2) In particular, and without prejudice to the
generality of the foregoing power, such regulations may
provide for all or any of the following matters :-
•
(b) the manner in which elections to the Council and
the Regional Councils may be held.
THE SECOND SCHEDULE
Par/ I
A chartered accountant in practice shall
guilty of professional misconduct, if hebe deemed to be
Clauses (I) to (10)
•
•
•
Par/ II
A member of the Institute, whether in practice or not, shall
be deemed to be guilty of professional misconduct, if he-
(i) contravenes any of the provisions of this Act or
the regulations made thereunder.
(ii) is guilty of such other ::ct or omission as may
be specified by the Council in this behalf, by notification
in the Gazette of India.
THE REGULATIONS
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Regulation 54-A. Disciplinary actio:i against member
G
in connection with conduct of election :
A member of the Institute shall be liable for disciplinary
action by the Council if he adopts one or more of the
following practices with regard to the election to the
Council, namely ;
(1}
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(2) Undue influence, that is to say, any direct
or indirect interference or attempt to interfere on the
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H. A. K. RAO v. COUNCIL, LC.A.I. (Subba Rao, C.J.)
261
part of a candidate or of any other person with the connivance of the candidate, with the free exercise of any
electoral right ;
Provided thatA declaration of policy or a promise of a particular
action, or the mere exercise of a legal right without intent
to interfere with an electoral right, shall not be deemed
to be interference within the meaning of this clause •
. •
(4B). The canvassing for votes, 01 soliciting the vote
of any elector, or persuading any elector not to vote,
for any particular candidate, or persuading any elector
not to vote at the ~lection, or exhibiting any notice or
sign board (other than an official notice) relating to the
election, by a candidate or by any other person with the
connivance of a candidate within a distance of 200 meters
from a polling booth.
In exercise of the power conferred under cl. (ii) of Part II of the
Second Schedule to the Act, on 'February 22, 1964, the Coun.:il
issued the following notification :
...... a member of the Institute shall be deemed to be
guilty of professional misconduct, if l:i1 connection with
election to the Central Council and/or Regional Councils
of the Institute, he is found to have taken part, directly or
indirectly, either himself or through aily other person,
in any of the following activities :-
(i) issuing manifestoes or circulars.
(ii) canvassing votes by visiting places of business
or residence of voteVi or in any other manner;
and
(iii) organising parties to entertain voters.
The gist of the said provisions may be stated thus : For the
purpose of the Act the expression "professional misconduct"
includes the act or omission specified in the Schedule to the Act.
The Council also may by notification make regulations in c-innection with the conduct of elections. Under Regulation 54-A(2) and
(4B) a member of the Institute shall be liable to disciplinary action
by the Council if he was guilty of the practice, among others, of
undue influence and canvassing as defined therein. On February 22,
1964, the Council issued a notification specifying that a member of
the Institute shall be deemed to be guilty of misconduct, if, in
connection with the election to the Councils of the Institute, he
is found to have taken part, directly or indirectly, either himself or
262
SUPREME COUJ.T REPORTS
(1967) 2 S.C.ll..
through any other person, or to have issued manifertoes or circulars or to have canvassed votes by visiting places of business
or residence of voters or in any other manner.· Part I oft he Second
Schedule to the Act describes the acts of professional misconduct
in relation to chartered accountants in practice requiring action by
the High Court and Part II thereof states genernlly that a member
of the Institute, whether in practice or not, shall be deemed to be
guilty of professional misconduct, if he contravenes any of the
provisions of the Act or the Regulations or is guilty of such other
act or omission as may be specified by the Council in this behalf.
by notification in the Gazette of India.
Now the question is whether the said notification is invalid
for any of the reasons mentioned above. It is said that the power
of the Council to issue a notification . is limted by the express provisions of cl. (ii) of Part II of the Second Schedule to the Act.
As
under cl. (i) of Part IJ of the Second Schedule to the Act, the contravention of the provisions of the Act or of the Regulations made
thereunder was professional misconduct. the argur, .nt proceeded,
the expression "other
act or omission" in
cl. (ii)
should
be an act or omission other than those provided in the Regulations.
Elaborating this argument it was said that under Regulation 54-A(2)
the appellant in Civil Appeal No. 447 of 1965 had a legal right to
·canvass within the meaning of the said prO\iso, that the notification in effect depriving him of that right was in derogation of the
the said Regulation and, was, therefore, illegal. It was also argued
that the said notification was inconsistent with cl. (48) of Regulation
54A, as under that clause canvassing for votes or soliciting votes
of electors was prohibited within a distance of 200 meters from the
polling booths, thereby impliedly permitting eanvas~;n!! beyond
that
tlistance, and that, therefore, the notification prohibiting
canvassing generally was in dirert conflict with the same. The
further augument was that cl. ( 48) of Regulation 54-A detracted
only to a limited extent from the legal right to canvass and that
any prohibition against general canvassing beyond the limits laid
down by cl. (4B) of Regulation 54-A contravened both cl. (2) and
cl. (48) of Regulation 54-A and was bad.
The argument at first sight appears to be attractive, but it
involves a fallacy.
The Regulations enumerated different heads for
disciplinary action in connection with the conduct of an election:
but they did not. either expressly or by necessary implication,
prohibit the Council from adding addition3l heads of disciplinary
action. While the Regulations provide for disciplinary action for
undue ir. Ruence and for canvassing for votes ~te. within a distance
of 200 r.ietres from a polling booth, the notification placed other
acts and omissions under different heads of misconduct. There is
no inherent conflict between undue influence and canvasisng of
votes by visiting the places of business or the residence of the voters.
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H. A. K. RAO v. COUNCIL, J.C.A.I. (Subba Rao, C.J.)
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So took there is no conflict between canvassing of votes within a
distance of 200 meters from a polling booth and canvassing of
votes by visiting places of business or residence of voters or in any
other manner. All the three can stand together.
Nor can we agree that apart from the fundamental rights,
which the appellant does not claim in this appeal, he has an unlimited
right to canvass for votes, either statutory or otherwise. Nothing
has been placed before us to sustain any such right. His rights
are defined by the statute and we cannot say that such an unlimited
right to canvass is implicit in the right to stand for election.
We cannot also agree with the learned counsel for the appellant
that the notification is unreason: ble in the sense that expression is
understood in law-. As noticed .earlier, the electorate is an enlightened body and the elections are to a council designed to maintaia
high standards of the profession. The voters are expected to know
the qualifications of every candidate and they are certainly in a
position to vote for the best ·candidate. Canvassing may be necessary for explaining to ·an illiterate voter the qualifications of a
candidate and the principles for which he stands or in the case of
vast electorate to which the candidate may not be familiar, but no
such necessity exists in the case of enlightened voters of a compact
electorate.
If the Council thought that malpractices existed and
undue and unwholesome pressures were brought to bear on the voters
and for that reason, with a view to purify the conduct of elections,
if it issued the said notification prohibiting canvassing, we cannot
say that the Council acted unreasonably in issuing the said notification. It issued the notification in the best intei:.ests of the purity
of the elections and ultimately.in the interests of the profession itself.
We, therefore, hold that the Council had not only power to issue
tlie notification prohibiting canvassing of votes but also that the
said notification was not inconsistent with either the provisions of
the Act or the Regulations made thereunder.
Now coming to the cross-appeal, the High Court held that issuing
illegible manifestoes or circulars directly came into conflict with
the proviso to cl. (2) of Regulation 54-A which says that a declara~
tion of policy or a promise of a particular action, or the mere exercise
of a legal rigl:t without intent to ·interfere with an electoral right,
shall not lie deemed to be ir.terference within the meaning of the said
clause. Doubtless the proviso to Regulation 54-A(2) saves issuing
of manifestoes and circulars from the operation of the substantive _part of the. clause. The act of issuing· a manifesto or
a circular' therefore, does not amount to undue influence with in
the meaning of that clause. If the notification says tt tt such issuing
of manifestoes or circulars is undue influence, it certainly comes
into conflict v,ith that clause. But the notification does not, and·
indeed it cannot, amend the definition of "undue influence". The
264
SUPJtl!MB couaT JlEPOl.TS
(1967) 2 S.C.ll.
said Act, though it does not amount to an undue i~fluence, is conA
stituted a dilferent head of professional misconduct which the Council
is authori7.ed to do under cl. (ii) of Part II of the Second Schedule
to the Act. From this perspective no conflict between the two
arises. We cannot, therefore, agree with the reasoning of the
High Court that the notification in so far as it prohibited issuing
of manifcstoes and circulars was illegal.
B
In the result, we hold that the entire notification is valid. Civil
Appeal No. 447 of 1965 is dismissed with costs and Civil rtpμeal
No. 501 of 1965 is allowed, but, in the circumstances, without
costs.
R.K.P.S.
C. A. 447of1965 dismis:red.
c
C. A. 501 of 1965 allowed.