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Case NameChartered Accountants of India v/s Vimal Kumar and Anr
Citation1 SCC(Cri) 442
Date of JudgmentDecember 1, 2010
CourtSupreme Court
Case NumberCriminal Appeal no. 2263-64 of 2010
Case TypeCriminal Case
AppellantInstitute Of  Chartered Accountants Of India
RespondentVimal Kumar Surana and Another
BenchJustice G.S. Singhvi and Justice A.K. Ganguly

FACTS

It is alleged that Vimal Kumar Surana, the respondent, represented himself before the Income Tax Department and the authorities established under the Madhya Pradesh Trade Tax Act on the basis of a power of attorney or as a legal representative and submitted documents, such as audit reports and certificates that had to be issued by the Chartered Accountant, even though he is not a member of the appellant-Institute and is a graduate in commerce. He is also reported to have impersonated himself as Chartered Accountant and created audit reports for monetary consideration.It is alleged that Vimal Kumar Surana, the respondent, represented himself before the Income Tax Department and the authorities established under the Madhya Pradesh Trade Tax Act on the basis of a power of attorney or as a legal representative and submitted documents, such as audit reports and certificates that had to be issued by the Chartered Accountant, even though he is not a member of the appellant-Institute and is a graduate in commerce. He is also reported to have impersonated himself as Chartered Accountant and created audit reports for monetary consideration. The trial Court (hereafter referred to as “the trial Court”) issued an order on March 10, 2003, establishing charges against the respondent under Sections 419, 468, 471, and 472 IPC after the police had carried out an investigation. By seeking a revision under Section 397 of the Code of Criminal Procedure (Cr.P.C. ), the respondent disputed that order. The case was returned to the trial court with the directive to determine whether there are sufficient grounds for framing charges under Sections 419, 420, 465, 467, and 473 IPC read with Sections 24 and 26 of the Act. The primary additional sessions judge in Betul accepted the revision, overruled the order dated 10.3.2003, and allowed the revision. The trial Court made an order upon remand ruling dated 8.12.2003 and stated that the respondent had no legal basis for any charges to be lodged against him under the IPC. Moreover, it concluded that no allegations had been brought before the Magistrate by the Council or in accordance with its order, forbidding the taking of cognizance of offences under Sections 24 and 26 of the Act.

LEGAL ISSUES

  1. 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 person who is charged with the allegations which constitute an offence or offences under other laws including the Indian Penal Code (IPC).

CONTENTION OF APPELLANT

Shri U.U. Lalit, an experienced senior attorney representing the appellant, argued that even though Chapter VII of the Act’s provisions list penalties for specific actions taken by Institute members, non-members, or companies, there is no immunity from prosecution if that member, non-member, or company infringes the IPC. The learned senior counsel drew our attention to the phrase “without prejudice to any other proceedings, which may be taken against him” in sub-section (2) of Sections 24A, 25 and 26 of the Act, and advanced the case that any person who violates these provisions may be fined, imprisoned, and/or prosecuted for an offense(s) under the IPC.The learned single judge made a serious mistake by approving the rulings of the trial Court and 1st Additional Sessions Judge, Betul, according to learned senior counsel, who highlighted that the legislature did not consciously exclude the applicability of the IPC provisions when enacting Chapter VII of the Act.

CONTENTION OF RESPONDENT

The respondent’s senior counsel, Shri R.P. Gupta, argued that the IPC and Cr.P.C.’s provisions could not be used to pursue and punish the offender because the Act is a special piece of legislation and because violations of Section 24 and sub-section (1) of Sections 24A, 25 and 26 transmit specific penalties. Since no complaint was made against the respondent under Section 28 of the Act, learned senior counsel further asserted that the respondent could not have been prosecuted for the claimed infraction of sub-section (1) of Sections 24A and 26 of the Act.The learned senior counsel cited the court’s rulings in Jamiruddin Ansari v. CBI (2009) 6 SCC 316 and Jeewan Kumar Raut v. CBI (2009) 7 SCC 526 in support of this claim. The learned attorney then argued that because the allegations made against the respondent are not related to an IPC breach, this Court cannot interfere with the impugned order.

JUDGMENT

Both the definition and the punishment for personation fraud, forgery, counterfeiting of seals, etc. are lacking in Chapter VII of the Act’s provisions. The provisions of Chapter VII will become discriminatory and may need to be invalidated on the grounds that they violate Article 14 if it turns out that a person who breaches Section 24 or violates Subsection (1) of Sections 24A and 26 of the Act can only be punished under the Act, even though his act also represents one or more offences defined under the IPC, and that too on the foundation of a complaint made in accordance with Section 28. According to established law, if there are two possible constructions of a statute, the one that results in anomaly or absurdity and makes the statute susceptible to the charge of unconstitutionality should be avoided in preference to the other that makes the statute rational and impervious to the charge of unconstitutionality. Such an unintended consequence can be avoided and deserves to be avoided when interpreting Sections 24A, 25 and 26. Aside from that, the Court cannot interpret the Act’s provisions in a way that would deny the victim of an offence defined in Sections 416, 463, 464, 468, or 471 the ability to pursue legal action against the wrongdoer by filing a first information report or complaint in accordance with the applicable Cr.P.C. provisions.The contested order is overturned, and the trial court is given another chance to determine whether the accusations made in Brij Kishor Saxena’s complaint amount to an IPC violation. The trial Court will proceed against the respondent in line with the law if it determines that the charges do constitute one or more offense(s). However, it is made clear that no charges would be brought against the respondent for allegedly violating Sections 24, 24A, or 26 of the Act if no complaint has been submitted under Section 28.The argument that the respondent cannot be charged with crimes under the IPC because no complaint had been made against him to the relevant court or authority as required by Section 195(1)(b)(ii) of the Cr.P.C. sounds good, but it is unfounded. The officers of the Income Tax Department and the authorities established under the Madhya Pradesh Trade Tax Act, 1995 are exempt from the prohibition in Section 195 Cr.P.C. against taking cognizance by the Court except on a complaint in writing made by the concerned Court before which the document is produced or given in a proceeding Whoever the respondent is alleged to have appeared before using a power of attorney, acting as a legal representative, or producing an audit report does not fit under the definition of “Court” as stated in Section 195(3) of the Criminal Procedure Code. These officers/authorities were not carrying out the duties of a Civil, Revenue, or Criminal Court, nor could they be regarded as a tribunal established by or pursuant to a Central or State Act, which is declared to be a Court for purposes of Section 195.

REFERENCES

https://indiankanoon.org/doc/878138/

https://www.scconline.com/Members/SearchResult.aspx

This Article is Written by Khushaal Shukla of Vivekananda Institute of Professional Studies


1 Comment

Kunal Shukla · May 16, 2023 at 6:44 am

Well Written👍🏻

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