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                            Inst.Of Chartered Accountants Of India Vs. Vimal Kumar Surana & Anr. on 1 December, 2010
                        
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Supreme Court of India
Inst.Of Chartered Accountants Of India Vs. Vimal Kumar Surana & Anr. on 1 December, 2010
Author: G Singhvi
Bench: G.S. Singhvi, Asok Kumar Ganguly
IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS._________OF 2010

(Arising out of S.L.P. (Crl.) Nos.3411-3412 of 2009)

The Institute of Chartered Accountants of India .......Appellant

Versus

Vimal Kumar Surana and another .......Respondents

J U D G M E N T

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 person who is charged with the allegations

which constitute an offence or 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 2

member of the appellant-Institute is 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 Accountants by preparing

forged seals. He is also said to have impersonated himself as Chartered

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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 18.3.2001 to the Station House Officer,

Police Station, Betul with 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

3) That the said Shri Vimal Kumar Surana impersonated himself as the Chartered Accountant, prepared the
audit reports; which are required to be issued under different 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 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 Surana with a view to perform 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 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 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

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14. The issue deserves to be considered from another 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

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 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 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 same to be counterfeit

then he is liable to be punished with imprisonment for life or with 17

imprisonment which may extend to 7 years. He shall also be liable to fine.

The provisions contained in Chapter VII of the Act neither define cheating

by personation or forgery or counterfeiting of seal, etc. nor provide for

punishment for such offences. If it is held that a person acting in violation

of Section 24 or contravening sub-section (1) of Sections 24A and 26 of the

Act can be 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

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made in accordance with Section 28, then the provisions of Chapter VII will

become discriminatory and may have to be struck down 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 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 manner which will deprive the victim of the offences defined

in Sections 416, 463, 464, 468 and 471 of his right to prosecute the wrong

doer by filing the first information report or complaint under the relevant

provisions of Cr.P.C.

18

15. We may add that 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

Act, 1897 and Section 300 Cr.P.C., he could not have been punished twice

for the same offence. In Maqbool Hussain v. The State of Bombay

(supra), the Court considered the question whether the appellant who had

brought gold from Jeddah in contravention of notification dated 25.8.1948

could have been prosecuted under Section 8 of the Foreign Exchange

Regulation Act, 1947 after the gold had been confiscated by the authorities

of the Customs Department under Section 167(8) of the Sea Customs Act,

1878. The appellant challenged his prosecution by contending that this

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The aforesaid decision was considered in Raghunath v. State of U.P. Here, the accused had obtained sale deed
of the property of a widow by setting up of an impostor and thereafter filed a mutation application before the
Tahsildar. The widow contested the mutation application on the ground that she had never executed the sale
deed and thereafter filed a criminal complaint under Sections 465, 468 and 471 IPC in which the accused were
convicted. In appeal, it was contended that the private complaint was barred by virtue of Section 195(1)(c)
CrPC and the Revenue Court alone could have filed the complaint. The Court repelled the aforesaid
contention after relying upon the ratio of Patel Laljibhai v. State of Gujarat and the private complaint was held
to be maintainable. In Mohan Lal v. State of Rajasthan the abovenoted two decisions were relied upon for
holding that provisions of Section 195(1)(c) (old Code) would not be applicable where mutation proceedings
were commenced after a Will had been forged. In Legal Remembrancer, Govt. of W.B. v. Haridas Mundra,
Bhagwati, J. (as His Lordship then was), speaking for a three-Judge Bench observed that earlier there was
divergence of opinion in various High Courts, but the same was set at rest by this Court in Patel Laljibhai
Somabhai and approved the view taken therein that the words of Section 195(1)(c) clearly meant the offence
alleged to have been committed by a party to the proceeding in his character as such party i.e. after having
become a party to the proceeding, and Sections 195(1)(c), 476 and 476-A (of the old Code) read together
indicated beyond doubt that the legislature could not have intended to extend the prohibition contained in
Section 195(1)(c) to the offences mentioned in the said section when 36

committed by a party to a proceeding prior to his becoming such party. Similar view has been taken in
Mahadev Bapuji Mahajan v. State of Maharashtra where the contention that the absence of a complaint by the
Revenue Court was a bar to taking cognizance by the criminal court in respect of offences under Sections 446,
468, 471 read with Section 120-B IPC which were committed even before the start of the proceedings before
the Revenue Court, was not accepted.

An enlarged interpretation to Section 195(1)(b)(ii), whereby the bar created by the said provision would also
operate where after commission of an act of forgery the document is subsequently produced in court, is
capable of great misuse. As pointed out in Sachida Nand Singh after preparing a forged document or
committing an act of forgery, a person may manage to get a proceeding instituted in any civil, criminal or
revenue court, either by himself or through someone set up by him and simply file the document in the said
proceeding. He would thus be protected from prosecution, either at the instance of a private party or the police
until the court, where the document has been filed, itself chooses to file a complaint. The litigation may be a
prolonged one due to which the actual trial of such a person may be delayed indefinitely. Such an
interpretation would be highly detrimental to the interest of the society at large."

The attention of the High Court does not appear to have been invited to the

aforesaid judgment of the Constitution Bench and this is the reason that the

High Court declared that the complaint filed by Brij Kishor Saxena was not

maintainable because the same was not filed in accordance with Section

195(1)(b)(ii) Cr.P.C.

26. Although, Shri Gupta argued that the allegations levelled against the

respondent do not constitute any offence under Sections 419, 420, 465, 467,

468, 472 and 473 IPC, we do not consider it necessary to deal with this point 37

because the High Court did not sustain the orders challenged before it on

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that ground.

27. In the result, the appeals are allowed. 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 Brij Kishor Saxena

constitute any offence under the IPC. If the trial Court comes to the

conclusion that the allegations do constitute one or more offence(s), then it

shall 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 be framed against the respondent for the alleged

contravention of Sections 24, 24A or 26 of the Act.

.................................J.

[G.S. Singhvi]

.............................

.....J.

[Asok Kumar Ganguly]

New Delhi

December 01, 2010.

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