Delhi HC issues notice on plea against amendments to Chartered Accountants Act

The Delhi High Court on Thursday sought the response of the Centre and the Institute of Chartered Accountants of India (ICAI) on a plea challenging the constitutional validity of recent amendments to the Chartered Accountants Act, 1949.

Issuing notice in the matter, a bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad posted the matter for further hearing on January 20 next year.

In the plea, petitioner Venugopal Swami B. challenged sections 21(9), 21A(6) & (7) and 21B (6) & (7) of the Act as amended by The Chartered Accountants and Company Secretaries (Amendment) Act, 2022 arguing they are contrary to Articles 14, 19(1)(g) and 21 of the Constitution.

The provisions concern misconduct and liability of CA firms and their partners.

The plea filed through advocates Biju Mattam, Chetan Garg, and Ankita Bafna contended that the said provisions are against settled principles of law and natural justice as they punish the firm and its unrelated and innocent partners who may not even be privy to or aware of the alleged misconduct of the member.

“While sub-section (5) of Section 21A provides an opportunity for being heard to the accused member before passing any order or taking action under clause (a), (b) or (c) of Sub Section (5), the Act denies any such opportunity to the firm/ innocent/unrelated partner(s) before passing an order under sub-Section (6) or (7). Again, the action that may be initiated against firm/innocent/unrelated partner(s) is more stringent, harsh, and unproportionate than what would be imposed upon the member who is found guilty of misconduct itself,” read the plea.

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