INSTITUTE OF CHARTERED ACCOUNTANTS Vs. DEBABRATA BASU

JUDGEMENT

(1.) This appeal involves an interesting question as to the true construction of Section 30, Chartered Accountants Act, and as to the validity of Regulation 34 framed thereunder. The validity of Clause 4(f) of Form "L", prescribed for an agreement between a member of the Institute of Chartered Accountants and an articled clerk, is consequential and is also in question.

(2.) The simple facts are as follows. One Sri Debabrata Basu was a Chartered Accountant, and respondent No. 2, Prasanta Kumar Dutt, entered into an agreement with him on 1-4-1950, for service under articles of clerkship. The regulations framed under 'the Chartered Accountants Act provide that such an agreement is to be sent to the Institute of Chartered Accountants for registration. In forwarding the particular agreement to the Institute, Debabrata Basu said that he had omitted clause 4(f) of the standard form, inasmuch as, in his view, that clause was ultra vires the Act. The Institute refused to register the agreement, inasmuch as it was not an agreement in accordance with Regulation 36 which required such agreements to be executed in conformity with Form "L". Thereupon, Debabrata Easu commenced a suit in which he asked for a declaration that the agreement was valid & proper, a further declaration that the refusal by the Institute to register the agreement was wrongful, illegal and void and a still further declaration that respondent No. 2 should be registered and should be regarded as being registered in the books of the Institute as from the date of the agreement. There were also prayers for certain ancillary reliefs to which it is not necessary to refer.

(3.) The defence of the Institute was that Clause 4(f) of Form "L" was based on Regulation 34 and that regulation had been validly made under the powers conferred on the Institute by Section 30(1) of the Act. The contention of the Institute, accordingly, was that the agreement sought to be registered not being in accordance with Regulation 34 & not being in conformity with Form "L" as required by Regulation 36, was not registrable and that its registration had been rightly refused.