Delhi HC seeks centre's stand on plea challenging provisions of Chartered Accountants Act

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The Delhi High Court on Thursday sought the Centre’s stand on a petition challenging certain provisions of the Chartered Accountants Act as amended earlier this year.

A bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad issued notice on a petition by Venugopal Swami B who claimed that 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 are contrary to Articles 14, 19(1)(g) and 21 of the Constitution and should thus be quashed.

The provisions deal with the misconduct and liability of CA firms and their partners. The court also sought the stand of the Institute of Chartered Accountants of India, Institute of Cost Accountants of India, and Institute of Company Secretaries of India on the petition.

The petition, filed through lawyers Biju Mattam, Chetan Garg, and Ankita Bafna, claimed that the amended law provides for punishing the firm as well as innocent/unrelated partners, who may not be privy to or even aware of the alleged misconduct of the member who purportedly has been found guilty, without even adhering to the principles of natural justice.

The petition which demonstrates many other provisions of the Act that is ultra vires to the Constitution further said that the amended Act does not provide the right to file an appeal against such adverse orders and empowers the Disciplinary Committee/Board to take stringent actions against the firm in the nature of cancellation of registration or suspension of business activities, without even affording an opportunity of being heard to the firm or its other partners. The matter would be heard next on January 20.