- (1.) Appellant No.1 herein is a Society registered under the Andhra Pradesh (Telangana Area) Public Societies Act, 1350F. At the time of its registration it was known as 'Institute of Certified Financial Analysts', which was changed to 'The Institute of Chartered Financial Analysts of India'. Appellants contend that it offers the Chartered Financial Analyst Course/Programme, which is entirely different from that offered by Respondent No.1 It has sought for opinion from the Director General of Investigation and Registration in terms of Sections 11 and 36 of the Monopolies and Restrictive Trade Practices Act, 1969 on 11.02.1988, whereto a reply was sent by the appellants on 24.02.1988. A notice, however, was published in the journal of Respondent No.1 herein, wherein a purported caution to members about the appellant-Institute was published in the following terms : "It has come to the notice of the Institute that the Institute of Chartered Financial Analysts of India, Hyderabad is conferring the designation of "Chartered Financial Analyst" and permitting its members to use the letters 'C.F.A.' after their names. The Additional Solicitor General of India has opined that the designation "Chartered Financial Analyst", would seem to be similar to the designation Chartered Accountant especially when the letters 'C.F.A.' are added to the name, which is very close to the letters 'F.C.A.' conferred by the Institute of Chartered Accountants of India. He has further opined that the activities of the Institute of Chartered Financial Analysts of India are violative of Section 24A of the Chartered Accountants Act, 1949. The Institute has already filed an application under Section 36 of the MRTP Act, 1969 with the Director General, MRTP Commission, New Delhi against the activities of the said Institute and the matter is under investigation by the Commission."
(2.) It is, however, not in dispute that no investigation was initiated by the MRTP Commission in that behalf. A notice was sent by Appellant No.1 to Respondent No.1, asking for a copy of the opinion of the Additional Solicitor General so as to enable it to know the facts placed before him for his opinion. But no response was received thereto. A reminder thereto was sent on 15.06.1989 and by a letter dated 11.07.1989, the Secretary of Respondent No.1 refused to send the copies of the case and the opinion of the Additional Solicitor General. On or about 03.08.1989, a notification was issued by Respondent No.1 herein prescribing that if any member of the Respondent-Institute i.e. any Chartered Accountant, who obtained the qualification of the Chartered Financial Analyst on or after 01.01.1990; or having obtained the said qualification earlier did not surrender the same before the said date, would be held to be guilty of professional misconduct in term of the provisions of the Chartered Accountants Act, 1949 (for short, 'the Act').
(3.) A writ petition was filed before the Andhra Pradesh High Court by Appellant No.1 herein on or about 16.11.1989. The said writ petition was dismissed by a learned Single Judge by a judgment and order dated 21.11.1990, inter alia, opining : "The proviso to a section cannot be expected to nullify the effect of the main Section. The proviso must be treated as an exception and subservient to the object sought to be achieved by the main Section. Under Appendix No. (8) it was agreed that the Institutes previously recognized under the Auditor's Certificate Rules, 1932, be recognized for the purposes of Section 7 for the use of letters, F.S.A.A. Further the Council decided that letters or description in respect of membership of bodies other than Accountancy Institutes can be used provided such use does not amount to the use of designation and in the case of Accountancy Institutes prior recognition of the Council in this behalf is necessary. It was also decided that in respect of Accountancy Institutes prior recognition of the Council in this behalf is necessary. It was also decided that in respect of Accountancy Institutes, which are recognized and in respect of Institutes other than Accountancy Institutes the word 'London' in brackets may be allowed to be added provided that in each case the respective Institutes had permitted such addition. The Council also decided that the Institute of Costs and Works Accountants is not an Accountancy Institute within the meaning of Section 7 and therefore there was no bar to the use of these letters by the members of that Institute, if they happen to be their members. A combined reading of Section 7 and the Appendix (8) makes it clear that Chartered Accountants who have been registered as members of the 1st respondent-Institute alone are permitted to use the letters or description which are recognized by it. Therefore it is clear that the designation of 'Chartered Financial Analyst' is not recognized by the 1st respondent-Institute or for that matter by the Central Government or by any Statute. Therefore, under Section 24A of the Act the 1st respondent-Institute can impose restrictions on all the members of the 1st petitioner-Institute not to use the unrecognized diploma or designation that has been awarded by the 1st petitioner-Institute. Section 24A clearly provides penalty for using the name of the Council, awarding degree of Chartered Accountancy etc. Section 24A of the Act reads as follows : "24A.-Penalty for using name of the Council awarding degree of chartered accountancy, etc. : "(1) Save as otherwise provided in this Act, no person shall (i) use a name or the common seal which is identical with the name or the common seal of the Institute or so nearly resembles it as to deceive or as is likely to deceive the public; (ii) award any degree, diploma or certificate or bestow any designation which indicates or purports to indicate the position or attainment of any qualification or competence similar to that of a member of the Institute; or (iii) seek to regulate in any manner whatsoever the profession of chartered accountants." Sub-section (2) of Section 24A deals with the penalty to be imposed in case of contravention of the provisions of sub-section (1). Under sub-section (3) it is stated that nothing contained in this section shall apply to any University established by law or to any body affiliated to the Institute. The 1st respondent-Institute can also impose restrictions on its own members and also impose penalty for using the name of the Council, awarding degree of chartered accountancy. Section 24 deals with the penalty for falsely claiming to be a member of the Institute (R-1) According to the petitioners, the course of study that is being taught at the Institute is different. But the 1st respondent Institute contends that the course of study is similar. The respondents filed an Annexure-X to the counter giving a comparative table of syllabi of ICFAI and ICAI. But one should not forget the fact that the 1st respondent-Institute has got authority to change the syllabus from time to time depending upon the changes in the economic environment in the national and international sphere and the Chartered Accountants can function not only as Accountants, Auditors, Financial Advisors, but also as Financial Analysts. The Chartered Accountancy course is fairly exhaustive and includes areas in financial and investment management, micro economics and security evaluation, project appraisal and Indian financial system. Section 2(b) of the Act defines 'Chartered Accountant' as to mean a person who is a member of the Institute and the persons who have passed such examination and complete such training as may be prescribed for members of the Institute shall be entitled to have their names entered in the Register of the Institute and no member of the Institute shall be entitled to practice whether in India or elsewhere unless he has obtained from the Council a Certificate of practice. According to Section 7, every member of the Institute in practice shall, any other member may, use the designation of a chartered accountant and no member using such designation shall use any other description, whether in addition thereto or in substitution therefor. The members of the Institute are divided into two classes viz., associates and fellows. Any person whose name is entered in the Register is deemed to have become an associate member of the Institute and is entitled to use the letters "A.C.A." after his name to indicate that he is an associate member of the Institute of Chartered Accountants. A member, being an associate, who has been in continuous practice in India for at least five years as a Chartered Accountant is entitled to use the letters F.C.A. after his name to indicate that he is a fellow of the Institute of Chartered Accountants and his name will be entered in the Register as a fellow of the Institute." It was further held : "There are many Analysts in different fields such as Food Analyst and Chemical Analyst. But when the 1st petitioner-Institute is dealing with the accountancy profession and training people in one form or the other, the 1st respondent-Institute which is a statutory body is perfectly justified in restraining their own members in using some other designation which is akin or which resembles the designation along with the designation that is being conferred by the 1st respondent-Institute, which will give rise an impression in the minds of the general public or the persons connected with the accountancy profession that the designation 'C.F.A.' is an additional qualification to the persons that were already holding 'C.A.' or 'F.C.A.'. Such preference cannot be taken advantage of by the members of the 1st respondent-Institute and Section 24A of the Act gives ample power to the 1st respondent-Institute to issue the impugned Notification as well as the 'caution'.;