# INDIA v. VIMAL KUMAR SURANA AND ANOTHER

- **Citation:** [2010] 14 S.C.R. 248
- **Court:** Supreme Court of India
- **Decided:** 2010-12-01
- **Case number:** Criminal Appeal Nos. 2263-2264 of 2010
- **Bench:** G.S. Singhvi, Asok Kumar Ganguly
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/india-v-vimal-kumar-surana-and-another-26481
- **Pages:** 41

## Headnote

Chartered Accountants Act, 1949:
ss. 2(d), 24, 24A, 25, 26 and 28 - Person qualifying the
exam of Chartered Accountant but not a member of the Institute
of Chartered Accountant of India - Person impersonating as
Chartered Accountant, preparing audit reports and forged
D seals - Criminal complaint before police against him alleging
commission of offences punishable ulss. 419, 420, 468 and
473 /PC - Prosecution under the provisions of Penal Code rl
w ss. 24 and 26 of the Act - Trial court and High Court holding
that even though prima facie case made out against the
accused u/s. 24, 24A and 26, cognizance could not have been
E taken on the basis of the complaint because no complaint was
filed u/s. 28 ;and that he could not be prosecuted under the
Penal Code - On appeal, held: If the particular act of a member
or a non-member or a company results in contravention of the
provisions contained ins. 24 or sub-section (1) of s.24A, 25 or
F 26 of the Act and such act also amounts to an offence of
criminal misconduct under /PC, then a complaint can be filed
by or under the order of the Council uls. 28, which may result
in punishment prescribed u/s. 24 or sub-section (2) of ss. 24A,
25 or 26 - Such member or non-member or company can also
G be prosecuted for any identified offence under /PC - There is
no bar against prosecution of such person if he is charged with
the allegations constituting offences under Penal Code or
under other laws - Matter remitted to trial court to consider
whether a/legations contained in the complaint constitute any
H
248
INSTITUTE OF CHARTERED ACCOUNTANTS OF
249
INDIA v. VIMAL KUMAR SURANA
offence under Penal Code - In the absence of a complaint ul A
s. 28, no charges could be framed against chartered
accountant for the alleged contravention of ss. 24, 24A or 26 -
Penal Code, 1860 - ss. 419, 420, 468 and 473.
ss. 24A(2), 26 and 25(2) - Expression 'without prejudice
8
to any other proceedings which may be taken against him' in
ss. 24A(2), 26 and s. 25(2) - Meaning of
Criminal Law:
Double jeopardy - Simultaneous prosecution of offender C
for contravention of ss. 24, 24A and 26 of the 1949 Act and for
the offences under the Penal Code - Permissibility of - Held:
Simultaneous prosecution is permissible but in view of the bar
contained in Article 20(2) of the constitution rlw s. 26 of the 1897
Act and s.300 Cr.P.C., punishment twice for the same offence
D
is barred- Chartered Accountants Act, 1949- ss. 24, 24A, 26
- Penal Code, 1860- Constitution of India, 1950- Article 20(2)
- General Clauses Act, 1897 - s. 26.
Interpretation of statutes:
Construction of statutory provisions - Held: When there
are two possible constructions of a statute, then the one which
leads to anomaly or absurdity and makes the statute vulnerable
to the attack of unconstitutionality should be avoided in
preference to the other which makes it rational and immune
from the charge of unconstitutionalJfy.
E
F
The respondent qualified the exam of Chartered
Accountant but was not a member of the appellantInstitute. The appellant-Institute filed a complaint before
G
the police against the respondent alleging cheating by
impersonation, forgery and counterfeiting of seal of the
Institute, punishable under Sections 419, 468, 471and472
IPC. The police filed the challan before the Magistrate. The
trial court held that there was no basis for framing any
H
250
SUPREME COURT REPORTS [20~0] 14 (ADDL.) S.C.R.
A charge against the respondent under IPC; and cognizance
of offences under Sections 24 and 26 of the Act could not
be taken because no complaint was filed by or under the
order of the Council of the appellant-Institute, before the
Magistrate. Aggrieved, the appellant filed revisions. The
B Single Judge of the High Court dismissed the same.
Therefore, the appellant-institute filed the instant appeals.
Allowing the appeals and remitting the matter to the
trial court, the Court
C
HELD: 1.1. Section 24 of the Chartered Accountants
Act, 1949 provides for puni

## Text

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[2010] 14 (ADDL.) S.C.R. 248
A
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF
B
c
INDIA
v.
VIMAL KUMAR SURANA AND ANOTHER
(Criminal Appeal Nos. 2263-2264 of 2010)
DECEMBER 01, 2010
[G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]
Chartered Accountants Act, 1949:
ss. 2(d), 24, 24A, 25, 26 and 28 - Person qualifying the
exam of Chartered Accountant but not a member of the Institute
of Chartered Accountant of India - Person impersonating as
Chartered Accountant, preparing audit reports and forged
D seals - Criminal complaint before police against him alleging
commission of offences punishable ulss. 419, 420, 468 and
473 /PC - Prosecution under the provisions of Penal Code rl
w ss. 24 and 26 of the Act - Trial court and High Court holding
that even though prima facie case made out against the
accused u/s. 24, 24A and 26, cognizance could not have been
E taken on the basis of the complaint because no complaint was
filed u/s. 28 ;and that he could not be prosecuted under the
Penal Code - On appeal, held: If the particular act of a member
or a non-member or a company results in contravention of the
provisions contained ins. 24 or sub-section (1) of s.24A, 25 or
F 26 of the Act and such act also amounts to an offence of
criminal misconduct under /PC, then a complaint can be filed
by or under the order of the Council uls. 28, which may result
in punishment prescribed u/s. 24 or sub-section (2) of ss. 24A,
25 or 26 - Such member or non-member or company can also
G be prosecuted for any identified offence under /PC - There is
no bar against prosecution of such person if he is charged with
the allegations constituting offences under Penal Code or
under other laws - Matter remitted to trial court to consider
whether a/legations contained in the complaint constitute any
H
248
INSTITUTE OF CHARTERED ACCOUNTANTS OF
249
INDIA v. VIMAL KUMAR SURANA
offence under Penal Code - In the absence of a complaint ul A
s. 28, no charges could be framed against chartered
accountant for the alleged contravention of ss. 24, 24A or 26 -
Penal Code, 1860 - ss. 419, 420, 468 and 473.
ss. 24A(2), 26 and 25(2) - Expression 'without prejudice
8
to any other proceedings which may be taken against him' in
ss. 24A(2), 26 and s. 25(2) - Meaning of
Criminal Law:
Double jeopardy - Simultaneous prosecution of offender C
for contravention of ss. 24, 24A and 26 of the 1949 Act and for
the offences under the Penal Code - Permissibility of - Held:
Simultaneous prosecution is permissible but in view of the bar
contained in Article 20(2) of the constitution rlw s. 26 of the 1897
Act and s.300 Cr.P.C., punishment twice for the same offence
D
is barred- Chartered Accountants Act, 1949- ss. 24, 24A, 26
- Penal Code, 1860- Constitution of India, 1950- Article 20(2)
- General Clauses Act, 1897 - s. 26.
Interpretation of statutes:
Construction of statutory provisions - Held: When there
are two possible constructions of a statute, then the one which
leads to anomaly or absurdity and makes the statute vulnerable
to the attack of unconstitutionality should be avoided in
preference to the other which makes it rational and immune
from the charge of unconstitutionalJfy.
E
F
The respondent qualified the exam of Chartered
Accountant but was not a member of the appellantInstitute. The appellant-Institute filed a complaint before
G
the police against the respondent alleging cheating by
impersonation, forgery and counterfeiting of seal of the
Institute, punishable under Sections 419, 468, 471and472
IPC. The police filed the challan before the Magistrate. The
trial court held that there was no basis for framing any
H
250
SUPREME COURT REPORTS [20~0] 14 (ADDL.) S.C.R.
A charge against the respondent under IPC; and cognizance
of offences under Sections 24 and 26 of the Act could not
be taken because no complaint was filed by or under the
order of the Council of the appellant-Institute, before the
Magistrate. Aggrieved, the appellant filed revisions. The
B Single Judge of the High Court dismissed the same.
Therefore, the appellant-institute filed the instant appeals.
Allowing the appeals and remitting the matter to the
trial court, the Court
C
HELD: 1.1. Section 24 of the Chartered Accountants
Act, 1949 provides for punishment of a person who is not
a member of the Institute, but represents himself as a
member of the Institute or uses the designation of
chartered accountant. Similar punishment can be
D imposed on a member of the Institute who does not have
a certificate of practice but represents that he is in practice
or practises as a chartered accountant. Sub-section (2) of
Sections 24A, 25 and 26 provide for imposition of different
kinds of punishment for violation of the provisions
E contained in sub-section (1) of those sections. Section 26
provides for imposition of punishment ifa person other
than a member of the Institute signs any document on
behalf of a chartered accountant in practice or a firm of
such chartered accountants in his or its professional
F capacity. [Para 12] [266-B, D, F]
1.2. Section 28 which is couched in negative form
declares that no person would be prosecuted under the
Act except on a complaint made by or under the order of
the Council or of the Central Government. The prohibition
G contained in Section 28 is attracted only when such
person is sought to be prosecuted for contravention of the
provisions contained in Section 24 or sub-section (1) of
Sections 24A, 25 or 26 and not for any act or omission
which constitutes an offence under the IPC. The use .of
H
INSTITUTE OF CHARTERED ACCOUNTANTS OF
251
INDIA v. VIMAL KUMAR SURANA
expression 'without prejudice to any other proceedings
A
which may be taken against him' in sub-section (2) of
Sections 24A and 26 and somewhat similar expression in
sub-section (2) of Section 25 shows that contravention of
the provisions contained in sub-section (1) of those
sections can .lead to filing of complaint under Section 28
8
of the Act and if the particular act also amounts to an
offence under the IPC or any other law, then a complaint
can also be filed under Section 200 Cr.P .C. or a first
information report lodged with the police under Section
156 Cr.P.C. The said expression cannot be given a c
restricted meaning in the context of professional and other
misconducts which may be committed by a member of the
Institute and for which he may be punished under Section
218(3) because the violation of Sections 24 to 26 can be
committed by a person who may or may not be a chartered
0
accountant as defined in Section 2(b). Thus, if the
particular act of a member of the Institute or a non-member
or a company results in contravention of the provisions
contained in Section 24 or sub-section (1) of Sections 24A,
25 or 26 and such act also amounts to criminal
misconduct which is defined as an offence under the IPC,
then a complaint can be filed by or under the order of the
Council or of the Central Government under Section 28,
which may ultimately result in imposition of the
punishment prescribed under Section 24 or sub-section
E
F
(2) of Sections 24A, 25 or 26 and such member or nonmember or company can also be prosecuted for any
identified offence under the IPC. The object underlying the
prohibition con!_ained in Section 28 is to protect the
persons engaged' in profession of chartered accountants
against false and unt~nable complaints from dissatisfied
G
litigants and others: However, there is nothing in the
language of the provisions contained in Chapter VII from
which it can be inferred that Parliament wanted to confer
immunity upon the members and non-members from
H
252 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
A prosecution and punishment if the action of such member
or non-member amounts to an offence under the IPC or
any other law. [Para 13] [267-A, E-H; 268-A]
1.3. Unlike ss. 416, 463, 464, 468 and 471 of the Penal
8 Code, the provisions contained in Chapter VII of the Act
neither define cheating by personation or forgery or
counterfeiting of seal, etc. nor do they provide for
punishment for such offences. If it is held that a person
acting in violation of Section 24 or contravening subsection (1) of Sections 24A and 26 of the Act can be
C punished only under the Act even though his act also
amounts to one or more offence(s) defined under the IPC
and that too on a complaint made in accordance with
Section 28, then the provisions of Chapter VII would
become discriminatory and might have to be struck down
D on the ground of violation of Article 14. Such an
unintended consequence can be, and deserves to be
avoided, in interpreting Sections 24A, 25 and 26 keeping
in view the settled law that if there are two possible
constructions of a statute, then the one which leads to
E anomaly or absurdity and makes the statute vulnerable to
the attack of unconstitutionality should be avoided in
preference to the other which makes it rational and
immune from the charge of unconstitutionality. That apart,
the court cannot interpret the provisions of the Act in a
F manner which would deprive the victim of his right to
prosecute the wrong doer for the offences defined in
Sections 416, 463, 464, 468 and 471 by IPC filing a first
information report or a complaint under the relevant
provisions of Cr.P.C. [Para 14] [268-G-H; 269-A-C]
G
H
1.4. The respondent could have been simultaneously
prosecuted for contravention of Sections 24, 24A and 26
of the Act and for the offences defined under the IPC but
in view of the bar contained in Article 20(2) of the
Constitution read with Section 26 of the General Clauses
INSTITUTE OF CHARTERED ACCOUNTANTS OF
253
INDIA v. VIMAL KUMAR SURANA
Act, 1897 and Section 300 Cr.P.C., he could not have been
A
punished twice for the same offence. [Para 15] [269-D]
Maqbool Hussain v. The State of Bombay (1953) 4 SCR
730; T.S. Baliahv. T.S. Rangarchari (1969) 3 SCR 65; State
of Bombay v. S.L Apte (1961) 3 SCR 107; V.K. Agarwal v.
B
Vasantraj B. B(7atia (1988) 3 SCC 467; State of Bihar v. Murad
Ali Khan (1988) 4 SCC 655; State of Rajasthan v. Hat Singh
(2003) 2 sec 152, referred to.
1.5. The submission that the Chartered Accountants
Act, 1949 is a special legislation vis-a-vis IPC and a person
C
who is said to have contravened the provisions of subsection (1) of Sections 24, 24A, 25 and 26 cannot be
prosecuted for an offence defined under the IPC, which
found favour with the High Court, cannot be accepted.
[Para 21] [279-G]
D
Jeewan Kumar Raut v. CBI (2009) '7 SCC 526;
Jamiruddin Ansari v. CBl(2009) 6 SCC 316 - distinguished.
1.6. Except the provision contained in Section 28
against the prosecution of a person, who is alleged to have
acted in contravention of sub-section (1) of Sections 24,
24A, 25 or 26 otherwise than on a complaint made by or
under the order of the Council or the Central Government,
the Act does not specify the procedure to be followed for
punishing such person. In the absence of any such
provision, the procedure prescribed in Cr.P.C. has to be
followed for inquiry, investigation and trial of the complaint
which may be filed for contravention of any of the
provisions contained in Chapter VII of the Act. [Para 24]
[283-C-D]
1.7. It is incorrect to say that the respondent cannot
be prosecuted for offences defined under the IPC because
no complaint had been fil~(Lagainst him by the court or
authority concerned a_s per the requirement of Section
E
F
G
H
254
SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
A 195(1)(b)(ii) Cr.P.C. The prohibition contained in Section
195 Cr.P.C. against taking of cognizance by the court
except on a complaint in writing made by the court before
which the document is produced or given in a proceeding
is not attracted in the instant case because the officers of
B the Income Tax Department and the authorities constituted
under the Madhya Pradesh Trade Tax Act, 1995 before
whom the respondent is alleged to have acted on the basis
of power of attorney or as legal representative or produced
audit report do not fall within the ambit of the term 'court'
c as defined in Section 195(3) Cr.P.C. Such officer/
authorities were neither discharging the functions of a
civil, revenue or criminal court nor could they be treated
as tribunal constituted by or under the Central or State Act,
which is declared to be a court for the purpose of Section
D 195. [Para 25] [283-E-H; 284-A]
Iqbal Singh Marwah v. Meenakshi Marwah (2005) 4 SCC
370; Emperorv. Kushal Pal Singh AIR 1931 Allahabad 443 -
referred to.
E
1.8. The impugned order is set aside and the matter is
remitted to the trial court for considering whether the
allegations contained in the complaint lodged by 'B'
authorized by the appellant-Institute constitute any
offence under the IPC. If the trial court comes to the
F conclusion that the allegations do constitute one or more
offence(s), then it would proceed against the respondent
in accordance with law. However, it is made clear that in
the absence of a complaint having been filed under Section
28, no charges could be framed against the respondent
G for the alleged contravention of Sections 24, 24A or 26 of
the Act. [Para 27] [288-D-E]
H
Case Law Reference:
(1953) 4 SCR 730
(1969) 3 SCR 65
Referred to.
Referred to.
Para 15
Para 16
INSTITUTE OF CHARTERED ACCOUNTANTS OF
255
INDIA v. VIMAL KUMAR SURANA
'
(1961) 3 SCR 107
Referred to.
Para 17
A
(1988) 3 sec 467
Referred to.
Para 18
(1988), 4 sec 655
Referred to.
Para 19
(2003) 2 sec 152
Referred to.
Para 20
B
(2009) 1 sec 526
Distinguished.
Para 22
(2009) 6 sec 316
Distinguished.
Para 22
(2005) 4 sec 370
Referred to.
Para 25
c
AIR 1931 All 443
Referred to.
Para 25
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
Nos. 2263-2264 of 2010.
From the Judgment & Order dated 27.1.2009 of the High
D
Court of Judicature at Madhya Pradesh at Jabalpur in Cr.
Revision Nos. 436 & 550 of 2004.
Uday U. Lalit, Pramod Dayal, Nikunj Dayal for the Appellant.
R.P. Gupta, Neeraj Shekhar, Vibha Datta Makhija for the
E
Respondents.
The Judgment of the Court was delivered by
G.S. SINGHVI, J. 1. Leave granted.
2. The question which arises for consideration in these
appeals is whether the provisions contained in Sections 24, 24A
and 26 of the Chartered Accountants Act, 1949 (for short, 'the
Act') operate as a bar against the prosecution of a persbn who
F
is charged with the allegations which constitute an offence or
G
offences under other laws including the Indian Penal Code (IPC).
3. Respondent, Vimal Kumar Surana, who is a graduate in
Commerce and has passed the examination of Chartered
Accountant but is not a member of the appellant-Institute is
H
256 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
A alleged to have represented himself before the Income Tax
Department and the authorities constituted under the Madhya
Pradesh Trade Tax Act on the basis of power of attorney or as
legal representative and submitted documents such as audit
reports and certificates required to be issued by the Chartered
B Accountants by preparing forged seals. He is also said to have
impersonated himself as Chartered Accountant and prepared
audit reports for monetary consideration.
4. Shri Brij Kishor Saxena, who was authorised by the
appellant-Institute to do so, submitted complaint dated
C 18.3.2001 to the Station House Officer, Police Station, Betul with
D
E
F
G
H
following allegations:
"(1) That the said Shri Vimal Kumar Surana is not registered
with the Institute of Chartered Accountants of India as
Chartered Accountants, but he being not a Chartered
Accountant impersonated in the public as such, and
performed such functions which are being performed by a
Chartered Accountant. Whereas without being registered
as Chartered Accountant, he is not legally authorized to
perform the said functions before the Income Tax
Department, under the provisions of Income Tax Act, 1961,
he represented himself as legal representative. Similarly
under Section 31 of the M.P. Trade Tax Act, 1995 he worked
on the basis of Power of Attorney or as legal representative.
In this manner he has worked contrary to the provision of
Section 24 of the Chartered Accountants Act, 1949, which
is punishable offence under section 24 of the Act.
(2) That in the manner above mentioned, the said Shri Vimal
Kumar Surana not being a Chartered Accountant,
personated to the public as Chartered Accountant and in
the same manner unauthorisedly worked, which is an
offence under Section 419 of the Indian Penal Code.
(3) That the said Shri Vimal Kumar Surana impersonated
himself as the Chartered Accountant, prepared the audit
INSTITUTE OF CHARTERED ACCOUNTANTS OF
2S7
INDIA v. VIMAL KUMAR SURANA [G.S. SINGHVI, J.]
reports; which are required to be issued under different
A
provisions of law and obtained monitory consideration which
is an offence under Section 420 of the Indian Penal Code.
(4) That the said Shri Vimal Kumar Surana with the intention
of cheating with a view to extract money by playing fraud
8
upon the general public, prepared valuable documents such
as audit reports, certificates required to be issued by
Chartered Accountants for being used, which is punishable
offence under Section 468 of the Indian Penal Code.
(5) The said Shri Vimal Kumar Suran a with a view to perform
C
aforesaid acts prepared forged seals and used the same,
which is an offence punishable under Section 472 of the
Indian Penal Code. He is in possession of the seal which
he uses as Chartered Accountant. Therefore, this act is
punishable offence under Section 473 of the Indian Penal
D
code."
5. After conducting investigation, the police filed challan in
the Court of Chief Judicial Magistrate, Betul (hereinafter referred
to as 'the trial Court'), who passed order dated 10.3.2003 for
E
framing charges against the respondent under Sections 419,
468, 471 and 472 IPC. The respondent challenged that order
by filing revision under Section 397 of the Code of Criminal
Procedure (Cr.P.C.). 1st Additional Sessions Judge, Betul
allowed the revision, set aside order dated 10.3.2003 and
remitted the case to the trial Court with the direction to decide
whether there are sufficient grounds for framing charges under
Sections 419, 420, 465, 467 and 473 IPC read with Sections
F
24 and 26 of the Act. After remand, the trial Court passed order
dated 8.12.2003 and held that there was no basis for framing
any charge against respondent under the IPC. It further held that
G
cognizance of offences under Sections 24 and 26 of the Act
cannot be taken because no complaint had been filed by or under
the order of the Council before the Magistrate.
6. The appellant questioned the correctness of orders dated
H
258
SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
A 29.10.2003 and 8.12.2003 passed by 1st Additional Sessions
Judge, Betul and the trial Court respectively by filing two separate
revisions. The learned.Single Judge of the High Court dismissed
both the revisions. He held that even though prima facie case
was made out against the respondent under Sections 24, 24A
B and 26 of the Act, the Magistrate could not have taken cognizance
because no complaint was filed under Section 28 and the report
submitted by the police could not be made basis for punishing
him on the allegation of contravention of any of those provisions.
The learned Single Judge also referred to Sections 2(d), 4, 5
c and Section 195(1)(b)(ii) Cr.P.C. and held that in the absence
of a complaint filed by the concerned Court, the Magistrate was
not competent to frame charges against the respondent. The
learned Single Judge also held that in view of the special
mechanism contained in the Act for prosecution of a person
0
violating Sections 24, 24A and 26 of the Act, he cannot be
prosecuted under the IPC.
I
7. Shri U.U. Lalit, learned senior counsel appearing for the
appellant argued that even though the provisions contained in
Chapter VII of the Act specify penalties for certain acts
E committed by a member of the Institute or a non member or a
company, there is no bar against prosecution of such member,
non member or company if he/it commits an offence under the
IPC. Learned senior counsel invited our attention to the
expression 'without prejudice to any other proceedings, which
F may be taken against him' used in sub-section (2) of Sections
24A, 25 and 26 of the Act and argued that any person who
contravenes these provisions can be punished by levy of fine
and/or imprisonment and also prosecuted for offence(s) under
the IPC. Learned senior counsel emphasized that while enacting
G Chapter VI I of the Act, the legislature has designedly not excluded
the applicability of the provisions contained in the IPC and
argued that the learned Single Judge committed serious error
by approving the orders of the trial Court and 1st Additional
Sessions Judge, Betul.
H
INSTITUTE OF CHARTERED ACCOUNTANTS OF
259
INDIA v. VIMAL KUMAR SURANA [G.S. SINGHVI, J.]
8. Shri R.P. Gupta, learned senior counsel appearing for
A
the respondent argued that the Act is a special legislation and
as specific penalties have been provided for contravention of
Section 24 and sub-section (1) of Sections 24A, 25 and 26, the
provisions contained in the IPC and Cr.P.C. cannot be invoked
for prosecuting and punishing such person. Learned senior
B.
counsel further argued that the respondent could not have been
prosecuted for the alleged contravention of sub-section ( 1) of
Sections 24A and 26 of the Act because no complaint was filed
against him under Section 28 of the Act. In support of this
argument, the learned senior counsel relied upon the judgments c
of this Court in Jeewan Kumar Rauf v. CBI (2009) 7 SCC 526
and Jamiruddin Ansari v. CBI (2009) 6 SCC 316. Learned
counsel then submitted that this Court may not interfere with the
impugned order because the allegations levelled against the
respondent do not constitute any offence under the IPC.
9. Ms. Vibha Datta Makhija, learned counsel for the State
D
of Madhya Pradesh relied upon the judgment of this Court in
Maqbool Hussain v. The State of Bombay (1953) 4 SCR 730
and T.S. Baliah v. T.S. Rangachari (1969) 3 SCR 65 and
argued that the offences specified in Sections 24 to 26 are
E
distinct from the offences defined under Sections 419, 420, 465,
467, 468, 472 and 473 IPC and even ifthe complaint submitted
by Brij Kishor Saxena cannot be treated as a complaint filed
under Section 28 of the Act, his prosecution for offences defined
under the IPC cannot be treated as barred.
F
10. The Chartered Accountants Act was enacted by
Parliament to make provision for regulation of the profession of
Chartered Accountants. Chapter I of the Act contains definitions
of various terms. Chapter II contains provisions relating to
G
incorporation of the Institute, entry of names in the Register,
categorisation of the members of the Institute and certificate of
practice. Section 7 which also finds place in this Chapter
declares that every member of the Institute in practice shall, and
any other member may, use the designation of a chartered
H
260 SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.
A accountant and no member using such designation shall use any
other description, whether in addition thereto or in substitution
therefor. Section 8 enumerates the disabilities which disentitles
a person to have his name entered in the Register. Section 9(1)
which finds place in Chapter Ill postulates that there shall be a
B Council of the Institute for the management of the affairs of the
Institute and for discharging the functions assigned to it. The other
provisions contained in Chapter Ill regulate constitution of the
Council of the Institute, establishment of Tribunal and their
functions, etc. The provisions contained in Chapter IV mandates
c the Council to maintain a Register of the members of the Institute,
inclusion of the particulars of the members and removal of the
name of any member of the Institute from the Register. Chapter
V_consists of thirteen sections i.e. Sections 21 to 22G. Section
21(1) postulates establishment of a Disciplinary Directorate by
D the Council headed by an officer of the Institute designated as
Director (Discipline). The main function of the Director
(Discipline) is to scrutinize any information or complaint received
against any member and place the same before the Disciplinary
Committee. Sections 21A, 21Band22A provide for constitution
of a Board of Discipline, a Disciplinary Committee ahd an
E Appellate Authority. The main function of these bodies is to
ensure that expeditious action is ta~en against the members
against whom allegations of misconduct are levelled and he gets
fair opportunity to contest those allegations. An order passed by
the Disciplinary Committee can be appealed against under
F Section 22G. Section 23 which finds place in Chapter VI
provides for constitution and functions of Regional Councils.
Chapter VII specifies the penalties, which can be imposed on a
member, a non member and a company. Chapter VI IA contains
provisions for establishment of Quality Review Board, functions
G of the Board, etc. and Chapter VIII contains miscellaneous
provisions. Schedules I and II appended to the Act specify
various acts of misconduct of a chartered accountant in practice.
These Schedules obviously do not enumerate the wrong doings
of a person who is not a member of the Institute.
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INSTITUTE OF CHARTERED ACCOUNTANTS OF
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11. Sections 2(1) (b), 24, 24A, 25, 26 and 28 of the Act,
A
which have bearing on this case, read as under:
"2 .. Interpretation
(1) In this Act, unless there is anything repugnant in the
subject or context,-
(b) "chartered accountant" means a person who is a
member of the Institute.
24. Penalty for falsely claiming to be a member, etc.
Any person who ?
(i) not being a member of the Institute?
(a) represents that he is a member of the Institute;
or
(b) uses the designation Chartered Accountant; or
(ii) being a member of the Institute, but not having a
certificate of practice, represents that he is in practice or
practises as a chartered accountant, shall be punishable on
first conviction with fine which may extend to one thousand
rupees, and on any subsequent conviction with
imprisonment which may extend to six months or with fine
which may extend to five thousand rupees, or with both.
24A. Penalty for using name of the Council, awarding
degree of chartered accountancy, etc.
(1) Save as otherwise provided in this Act, no person shall?
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(i) use a name or the common seal which is identical
with the name or the common seal of the Institute or
so nearly resembles it as to deceive or as is likely
to deceive the public;
(ii) award any degree, diploma or certificate or
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SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
bestow any designation which indicates or purports
to indicate the position or attainment of any
qualification or competence similar to that of a
member of the Institute; or
(iii) seek to regulate in any manner whatsoever the
profession of chartered accountants.
(2) Any person contravening the provisions of subsection
(1) shall, without prejudice to any other proceedings which
may be taken against him, be punishable with fine which
may extend on first conviction to one thousand rupees, and
on any subsequent conviction with imprisonment which may
extend to six months, or with fine which may extend to five
thousand rupees, or with both.
25. Companies not to engage in accountancy
(1) No company, whether incorporated in India or elsewhere,
.:>hall practise as chartered accountants.
(2) If any company contravenes the provisions of sub-section
E
(i), then, without prejudice to any other proceedings which
may be taken against the company, every director,
manager, secretary and any other officer thereof who is
knowingly a party to such contravention shall be punishable
with fine which may extend on first conviction to one
F
thousand rupees, and on any subsequent conviction to five
thousand rupees.
26. Unqualified persons not to sign documents
(1) No person other than a member of the Institute shall sign
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any document on behalf of a chartered accountant in
practice or a firm of such chartered accountants in his or its
professional capacity.
(2) Any person who contravenes the provisions of subH
section (1) shall, without prejudice to any other proceedings,
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INDIA v. VIMAL KUMAR SURANA [G.S. SINGHVI, J.]
which may be taken against him, be punishable on first
A
conviction with a fine not less than five thousand rupees but
which may extend to one lakh rupees, and in the event of a
second or subsequent conviction with imprisonment for a
term which may extend to one year or with fine not less ten
thousand rupees but which may extend to two lakh rupees
8
or with both.
28. Sanction to prosecute
No person shall be prosecuted under this Act except on a
complaint made by or under the order of the Council or of C
the Central Government."
Sections 2(d), 4, 5 and 195 Cr.P.C. on which reliance has
been placed by learned senior counsel for the respondent read
as under:
"2(d). "complaint" means any allegation made orally or in
writing to a Magistrate, with a view to his taking action under
this Code, that some person, whether known or unknown,
has committed an offence, but does not include a police
report.
·
Explanation. -A report made by a police officer in a case
which discloses, after investigation, the commission of a
non-cognizable offence shall be deemed to be a complaint;
and the police officer by whom such report is made shall
be deemed to be the complainant;
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4. Trial of offences under the Indian Penal Code and other
laws. - (1) All offences under the Indian Penal Code (45 of
1860) shall be investigated, inquired into tried, and
otherwise dealt with according to the provision hereinafter
G
contained.
(2) All offences under any other law shall be investigated,
inquired into, tried, and otherwise dealt with according to -
the same provisions, but subject to any enactment for the
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264 SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.
time being in force regulating the manner or place of
investigating, inquiring into, trying or otherwise dealing with
such offences.
5. Saving. - Nothing contained in this Code shall in the
absence of a specific provision to the contrary, affect any
special or local law any special jurisdiction or power
conferred, or any special form of procedure prescribed, by
any other law for the time being in force.
195. Prosecution for contempt of lawful authority of public
servants, for offences against public justice and for
offences relating to documents given in evidence.- (1) No
Court shall take cognizance-
(a) (i) of any offence punishable under sections 172 to 188
(both inclusive) of the Indian Penal Code (45 of 1860), or
(ii) of any abetment of, attempt to commit, such offence, or
(iii) of any criminal conspiracy to commit, such offence,
except on the complaint in writing of the public servant
concerned or of some other public servant to whom he is
administratively subordinate;
(b) (i) of any offence punishable under any of the following
section of the Indian Penal Code (45 of 1860), namely,
sections 193 to 196 (both inclusive), 199, 200, 205 to 211
(both inclusive) and 228, when such offence is alleged to
have been committed in, or in relation to, any proceeding
in any Court, or
(ii) of any offence described in section 463, or punishable
under section 471, section 475 or section 476, of the said
Code, when such offence is alleged to have been
committed in respect of a document produced or given in
evidence in a proceeding in any Court, or
INSTITUTE OF CHARTERED ACCOUNTANTS OF
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INDIA v. VIMAL KUMAR SURANA [G.S. SINGHVI, J.)
'
(iii) of any criminal conspiracy to commit, or attempt to
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commit, or the abetment of, any offence specified in subclause (i) or sub-clause (ii),
except on the complaint in writing of that Court or by such
officer of the Court as that Court may authorise in writing in
8
this behalf, or of some other Court to which that Court is
subordinate.
(2) Where a complaint has been made by a public servant
under clause (a) of subsection (1) any authority to which he
is administratively subordinate may order the withdrawal of
C
the complaint and send a copy of such order to the Court;
and upon its receipt by the Court, no further proceedings
shall be taken on the complaint:
Provided that no such withdrawal shall be ordered if the trial o
in the Court of first instance has been concluded.
(3) In clause (b) of sub-section (1 ), the term "Court" means
a Civil, Revenue or Criminal Court, and includes a tribunal
constituted by or under a Central, provincial or State Act if
declared by that Act to be a Court for the purposes of this
E
section.
(4) For the purposes of clause (b) of sub-section (1 ), a Court
shall be deemed to be subordinate to the Court to which
appeals ordinarily lie from appealable decrees or
sentences of such former Court, or in the case of a civil
Court from whose decrees no appeal ordinarily lies, to the
principal Court having ordinary original civil jurisdiction
within whose local jurisdiction such Civil Court is situate:
Provided that-
( a)
where appeals lie to more than one Court, the
Appellate Court of inferior jurisdiction shall be the
r,ourt to which such Court shall be deemed to be
~ ubordinate;
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A
(b)
where appeals lie to a civil and also to a Revenue
B
Court, such Court shall be deemed to be subordinate
to the civil or Revenue Court according to the nature
of the case or proceeding in connection with which
the offence is alleged to have been committed.'1
12. An analysis of Section 24 shows that if a person who
is not a member of the Institute represents himself as a member
of the Institute or uses the designation of chartered accountant
then he is liable to be punished on first conviction with fine which
may extend to Rs.1,000/-. On any subsequent conviction, he can
C be punished with imprisonment up to 6 months or fine which may
extend to Rs.5,000/- or with both. Similar punishment can be
imposed on a member of the Institute who does not have a
certificate of practice but represents that he is in practice or
practises as a chartered accountant. Sub-section (2) of Sections
D 24A, 25 and 26 provide for imposition of different kinds of
punishment for violation of the provisions contained in subsection (1) of those sections. The punishment prescribed under
Section 24A can be imposed if a person uses a name or the
common seal which is identical with the name or the common
E seal of the Institute or is almost similar to such seal and the use
of such seal has the effect of deceiving or is likely to deceive the
public. A person can also be punished if he awards any degree,
diploma or certificate or bestow any designation which indicates
or purports to indicate position or attainment of any qualification
F or competence at par with a member of the Institute or if he seeks
to regulate the profession of chartered accountants. Section 26
provides for imposition of punishment if a person other than a
member of the Institute signs any document on behalf of a
chartered accountant in practice or a firm of such chartered
G accountants in his or its professional capacity. Section 28 which
is couched in negative form declares that no person shall be
prosecuted under the Act except on a complaint made by or
under the order of the Council or of the Central Government.
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13. What is most significant to note is that prohibition
INSTITUTE OF CHARTERED ACCOUNTANTS OF
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INDIA v. VIMAL KUMAR SURANA [G.S. SINGHVI, J.]
contained in Section 28 against prosecution of a person except
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on a complaint made by or under the o.rder of the Council or of
the Central Government is attracted only when such person is
sought to be prosecuted for contravention of the provisions
contained in Section 24 or sub-section (1) of Sections 24A, 25
or 26 and not for any act or omission which constitutes an offence
8
under the IPC. The use of expression 'without prejudice to any
other proceedings which may be taken against him' in subsection (2) of Sections 24A and 26 and somewhat similar
expression in sub-section (2) of Section 25 show that
contravention of the provisions contained in sub-section (1) of
C
those sections can lead to filing of complaint under Section 28
of the Act and if the particular act also amounts an offence under
the IPC or any other law, then a complaint can also be filed under
Section 200 Cr.P.C. or a first information report lodged with the
police under Section 156 Cr.P.C. The said expression cannot
be given a restricted meaning in the context of professional and
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other misconducts which may be committed by a member of the
Institute and for which he may be punished under Section 218(3)
because the violation of Sections 24 to 26 can be committed by
a person who may or may not be a chartered accountant as
defined in Section 2(b). In other words, if the particular act of a
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member'.of the Institute or a non member or a company results
in contravention of the provisions contained in Section 24 or subsection (1) of Sections 24A, 25 or 26 and such act also amounts
criminal misconduct which is defined as an offence under the
IPC, then a complaint can be filed by or under the order of the
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Council or of the Central Government under Section 28, which
may ultimately result in imposition of the punishment prescribed
under Section 24 or sub-section (2) of Sections 24A, 25 or 26
and such member or non member or company can also be
prosecuted for any identified offence under the IPC. The object
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underlying the prohibition contained in Section 28 is to protect
the persons engaged in profession of chartered accountants
against false and untenable complaints from dissatisfied litigants
and others. However, there is nothing in the language of the
provisions contained in Chapter VII from which it can be inferred
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268 SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.
A that Parliament wanted to confer immunity upon the members
and non members from prosecution and punishment ifthe action
of such member or non member amounts to an offence under
the IPC or any other law.
14. The issue deserves to be considered from another
8
angle. If a person cheats by pretending to be some other person,
or by knowingly substituting one person for another, or
representing that he or any other person is a person other than
he or such other person really is (Section 416 IPC), then he can
be charged with the allegation of cheating by personation and
C punished under Section 419 for a term which may extend to 3
years or with fine or both. If a person makes any false document
with the intent to cause damage or injury to the public or to any
person, or to support any claim or title, then he can be prosecuted
for an offence of forgery (Section 463) and can be punished
D under Section 465 with imprisonment which may extend to 2
years or with fine or with both. If a person commits forgery for
the purpose of intending that the document forged by him shall
be used for the purpose of cheating then he can be punished
with imprisonment for a term which may extend to 7 years and
E fine (Section 468). If a person makes or counterfeits any seal,
plate or other instrument for making an impression, intending that
the same shall be used for committing any forgery which would
be punishable under Section 467 or with such intent, in his
possession any such seal, plate or other instrument, knowing the
F same to be counterfeit then he is liable to be punished with
imprisonment for life or with imprisonment which may extend to
7 years. He shall also be liable to fine. The provisions contained
in Chapter VI I of the Act neither define cheating by personation
or forgery or counterfeiting of seal, etc. nor provide for
G punishment for such offences.