LI Network
Published on: February 10, 2024 at 00:15 IST
The Supreme Court resolved a challenge to Rule 9(3)(b) under the Chartered Accountants’ (Procedure of Investigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
This particular rule empowers the Board of Discipline to forward a misconduct complaint to the Disciplinary Committee, even if the Director (Discipline) suggests that the accused individual or firm is not culpable and recommends further investigation.
The bench, comprising Justices PS Narasimha and Aravind Kumar, asserted that the contested rule aligns perfectly with the objectives of framing the ‘Misconduct’ chapter under the Chartered Accountants’ Act.
The case involved an appeal against a Delhi High Court order, which had dismissed a challenge to Rule 9(3)(b) as ultra vires of Section 21A(4) of the Chartered Accountants’ (Amendment) Act, 2006.
The Supreme Court, laid set of legal principles applicable to instances where subordinate legislation is contested on the basis of being ‘ultra vires’ the parent Act.
Here’s a breakdown of the key points elucidated:
1. Doctrine of Ultra Vires: The rule-making body must operate within the bounds of authority conferred by the parent Act, as it derives its power solely from the statute.
2. Manifestations of Ultra Vires: Ultra vires may manifest through excess power, inconsistency with the parent Act, or non-compliance with procedural requirements, necessitating judicial intervention to uphold legality.
3. Judicial Scrutiny: Courts must analyze the source of power, the meaning of subordinate legislation, and its consistency with the delegated authority.
4. Delegated Power Structure: Delegated rule-making power typically follows a standardized pattern, distinguishing between general authority and specific enumeration.
5. Generality vs. Enumeration: The principle elucidates that specific powers enumerated do not restrict the general power granted, allowing for a broader interpretation within the scope of the general power.
6. Purposeful Delegation: Delegated power aims to facilitate the enactment’s objectives, necessitating adherence to the Act’s intent without extending its scope.
7. Ancillary Nature: Delegated power serves as a means to execute the enactment’s provisions and cover incidental aspects, avoiding the creation of substantive rights or obligations beyond the Act.
8. Limits of Rule-making: Specific enumeration of rule-making power necessitates compliance with the prescribed limits outlined in the parent Act.
This comprehensive elucidation of legal principles offers valuable insights for adjudicators navigating challenges to subordinate legislation, ensuring adherence to legal frameworks and upholding the integrity of statutory enactments.
Case Title: Naresh Chandra v. The institute of chartered accountants of India and others