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the Chartered Accountants Act, 1949
Section 24A in the Chartered Accountants Act, 1949
Section 7 in the Chartered Accountants Act, 1949
The Companies Act, 1956
The Co-operative Societies Act, 1912

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Andhra High Court
The Institute Of Chartered ... vs The Council Of The Institute Of ... on 21 November, 1990
Equivalent citations: 1991 (1) ALT 87
Author: R Rao
Bench: R Rao

ORDER

Radhakrishna Rao, J.

1. The Institute of Chartered Financial Analysts of India, a Society registered under the A.P. (Telangana Area) Public Societies Act, 1350 Fasli represented by its Registrar, and 16 others who are members of the said Society and members of Institute of Chartered Accountants of India, filed this writ petition challenging the Notification dated 3rd August, 1989 and the Explanatory Statement issued by the Council of the Institute of Chartered Accountants of India, the first respondent herein, as unauthorised, invalid and unenforceable and violative of Articles 14 and 19 of the Constitution of India.

2. The impugned Notification reads as follows:

"NOTIFICATION

(Chartered Accountants)

August 3, 1989.

No. 1-CA (7)/9/89;-In exercise of the powers conferred by Clause (ii) of Part II of the Second Schedule to the Chartered Accountants Act, 1949, the Council of the Institute of Chartered Accountants of India hereby specifies that a member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct if he becomes a member of the Institute of Chartered Financial Analysts of India on or after 1st January, 1990 or having already become a. member of the said Institute earlier, does not surrender his membership before the said date.

M.C. Narasimhan,

Secretary."    

3. The Explanatory Statement to Notification No. 1-CA(7)/9/89 dated 3rd August, 1988 reads:

"It has been observed that the Institute of Chartered Financial Analysts of India, Hyderabad, (earlier known as Institute of Certified Financial Analysts of India) has been conducting certain courses in financial analysis and basic finance and awarding the degree and qualification on the successful candidates. Thereafter, the candidates are allowed to describe themselves as "Chartered Financial Analysts" and use the designation "C.F.A.". In this connection, the Additional Solicitor General of India has expressed the view that the designation "Chartered Financial Analysts", would in the eye of a reasonable man, seem similar to the designation of Chartered Accountant specially when the letters C.F.A. are added at the end of a name or juxtaposed with the letters A.C.A. at the end of a name. This is also very close to the letters F.C.A. which fellow members of the Institute of Chartered Accountants of India can use. There is thus, a similarity which is sufficient to attract the provisions of Section 24-A of the C.A. Act, 1949. He has further opined that there is a prima facie case of similarity which tends to mislead a member of the public into believing both designations to be similar. In his view, the Institute of Chartered Financial Analysts of India, on conducting the course in its present form, without prior permission or sanction of either the Government of India or the Council of the Institute of Chartered Accountants of India has infringes the provisions of Section 24-A of the C.A. Act, 1949.

Having regard to the above, the Council is of the view that a notification should be issued under Clause (ii) of Part II of the Second Schedule to the Act, advising members to cease to be members of the Institute of Chartered Financial Analysts of India, Hyderabad."

4. The above Notification was published in the book "Chartered Accountant' an official journal of the Institute of Chartered Accountant of India, in its September, 1989 issue. In its May 1989 issue, a Caution to Members about the Institute of Chartered Financial Analysts of India was published in a box item. The box item reads as follows: "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 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 24-A 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.

5. On 25th May, 1989, Mulla & Mulla & Craigie Blunt & Caroe, Advocates, Solicitors and Notaries, issued a registered notice to the Editor of the journal on behalf of the 1st petitioner, asking him to insert a suitable explanation in the next issue of the publication as the contents of the publication are clearly designed to damage the reputation of the 1st petitioner-Institute and to cause them financial loss and also to lower them in the estimate of the members of the public. A reminder also was given on 15th June, 1989. Subsequently, the petitioners have filed this writ petition.

6. The Secretary of the 1st respondent Institute filed a detailed counter-affidavit narrating the circumstances which led to the issuance of the said notification, contending that the Notification that has been issued is perfectly within the authority that was conferred on the 1st respondent-Institute under the Chartered Accountants Act, 1949 (hereinafter referred to as 'the Act'), and also with the object of regulating the accountancy profession to maintain the standards of its members.

7. The learned counsel for the petitioners has raised several other contentions but we are not connected with all of them for the disposal of this writ petition. It is also a case of 'passing off' where it has to be decided in a proper and competent Court but not by this Court. We are only concerned, here whether the first respondent is competent to issue the impugned notification.

8. For an effective resolution of the issue involved in this writ petition, it is better to trace out the origin and development of accountancy and the recognition of the 1st respondent-Institute in India.

9. The earliest piece of legislation in India relating to companies was the Act of 1857. The Act did not contain any elaborate provisions directly dealing with the keeping of accounts, the making of accounts, their audit or their circulation to members. The Indian Companies Act, 1866, for the first time, made elaborate provisions in respect of Audit of accounts of Companies. The Companies Act of 1882 also did not contain any detailed provisions regarding either books or making of accounts or audit. It will thus be seen that the audit of accounts was not compulsory nor were there any provisions relating to qualifications of auditors so much so that up to 1913 it was open to any one to style oneself as an 'Auditor' and act as an independent auditor of companies wherever companies chose to have their accounts audited. The British Government, observing the changing conditions and the increasing industrial and commercial activities in which public interest was also increasing, decided to introduce new provisions mainly with a view to safeguard the public interest by the Act of 1913. Section 113 of the 1913 Act required "every company to keep proper books of accounts of the affairs and transactions of the companies" though the books to be kept were not specified, According to Section 144 of the said Act, no person could be appointed to act as Auditor unless he held a Certificate from the Local Government entitling him to act as an Auditor. The Section also provided powers to the Governor in Council to declare by notification that members of a particular Institution or Association (specified shall also be entitled to act as Auditors. A notification was subsequently issued on 14th March, 1914 in the following terms :

"In pursuance of the proviso to Sub-section (1) of Section 144 of the Indian Companies Act, 1913 (Act VII of 1913), the Governor General in Council is pleased to declare that the members of the following institutions and associations shall be entitled to be appointed and to act as auditors of companies throughout British India :-

(1) The Institute of Chartered Accountants of England and Wales;

(2) The Society of Incorporated Accountants and Auditors ;

(3) The Society of Accountants in Edinburgh ;

(4) The Society of Accountants and Actuaries in Glasgow ;

(5) The Society of Accountants in Aberdeen ;

(6) The Institute of Chartered Accountants in Ireland."

10. In pursuance of the powers vested in Local Governments of the various provinces of British India, they granted two types of certificates to those, who, in their opinion, possessed the qualifications to act as auditors of companies viz., 'Unrestricted Certificates', which entitled them to act as auditors through British India and also 'Restricted Permanent and Temporary Certificates' entitling the holders to act as auditors within the Province concerned and in the languages specified in the certificate. The temporary certificates granted were intended only as a transitional measure for a short period. The issue of the Restricted Certificate was practically discontinued after 1920 or thereabouts under instructions from the Government of India. At about this time, auditing, as such, was little known.

11. The next stage in the history of company legislation having a bearing on the evolution of the accountancy profession was the shifting of the control from Provincial Governments to Central Government on an all India basis. Prior to that, the Government of Bombay formulated a scheme for conducting the examination for the Government diploma in accountancy which was approved by the Government of India. In Bombay Presidency an Auditors Council was established to aid the Governor in Council to inter alia exercise disciplinary control over the holders of the Certificate of practice in Bombay. In 1930, the Government of India decided to exercise control over the members in practice by maintaining a register of accountants. For that purpose. Section 144 of the Companies Act, 1913 was amended by Act of 1930. Pursuant thereto the Governor General in Council authorised local Governments to grant certificates. An Indian Accountancy Board was set up with local Accountancy Board. The Governor General in Council was empowered to make rules for regulating the profession of auditors and for maintaining register of Accounts. Accordingly, the Auditors Certificates Rules, 1932 were framed on 26-3-1932 pursuant to Section 144 of the Companies Act. In 1934, the Government Diploma in Accountancy examination was abolished and the Registered Accountants examination was introduced by the Indian Accountancy Board. In 1948, an Expert Committee was constituted to recommend setting up of the Institute of Chartered Accountants of India. Based on the recommendations of the said Expert Committee, the Constituent Assembly passed the Chartered Accountants Bill, 1949 and the Chartered Accountants Act, 1949 came into force from 1-7-1949. Based on the experience and working of the 1st respondent Institute and the needs of the changing environment the Government decided to set up the Institute for Costs and Works Accountancy in 1959 and the Institute for Company Secretaries in 1980. These three Institutes which are constituted under relevant Statutes are holding power governing or regulating the field of Accountants or Company Secretaries.

12. Taking this background into consideration, we have to see whether the first respondent-Institute is justified in issuing the impugned Notification and the subsequent caution as already extracted above.

13. As already stated above, the first respondent-Institute is a statutory body created under the Chartered Accountants Act, 1949, for the purpose of making provision for the regulation of the profession of Chartered Accountants. The affairs of the 1st respondent-Institute are managed by a Council consisting of 24 elected members and 6 persons nominated by the Central Government. Section 15 of the Act provides for the functions to be carried out by the Council. The functions include the duty of carrying out the provisions of the Act and also includes specific duties of holding examinations, regulating engagement and training of articles and audit clerks, prescribing qualifications for entry in the Register of Members, recognition of foreign qualification, granting or refusal of certificates of practice to members, maintenance and publication of Register of practising chartered accountants, prescribing of tees for various purposes, removal of names from the Register and restoration thereof, regulation and maintenance of the status and standard of professional qualification of the members of the Institute, carrying out research in accountancy, maintenance of library and exercise of disciplinary powers. Section 17 of the Act provides for constitution of 3 Standing Committees viz., the Executive Committee, the Examination Committee and the Disciplinary Committee. In addition, the Council has power to form other Non-Standing Committees. Sections 24 and 24-A provide for penalty for falsely claiming to be a member of the Institute and for using the name of the Institute or which is identical with the name with common seal of the Institute or so nearly resembles it as to deceive or as is likely to deceive the public and awarding any degree, diploma or certificate, 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 etc., and awarding degree without authority. Section 30 of the Act empowers the Council to make regulations for the purpose of carrying out the objects of the Act as also for the purposes specified in the Section. These regulations are subject to the approval of the Central Government and previous publication in the Gazette of India. The regulations are to be laid before both Houses of Parliament. The First and the Second Schedules to the Act deal with professional misconduct in relation to chartered accountants in practice or in service and the purview of the Council and the various High Courts in the matter of professional misconduct of members. The Regulations in force at present are the Chartered Accountants Regulations, 1988.

14. A close reading of the provisions of the Act and the Regulations makes it clear that the 1st respondent-Institute has been set up by the Central Government under the authority of Parliament.

15. While so, on coming to know that the 1st petitioner-Institute is conferring designation of Chartered Financial Analyst upon the students who have fulfilled all the requirements prescribed for this designation by successfully completing the Chartered Financial Analyst Programme being offered by the 1st petitioner-Institute issued the impugned Notification and also cautioned the public by publishing a box item in its journal.

16. Admittedly, the 1st petitioner-Institute was not recognised by the Government of India or by any other Statute and the Degrees or Diplomas that are being conferred by it are not being recognised by any University or by any authority constituted under a Statute. It is apposite to read Section 7 of the Act in toto.

"7. Members to be known as Chartered Accountants-Every member of the Institute in practice shall, and by 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:

Provided that nothing contained in this section shall be deemed to prohibit any such person from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other Institute of Accountancy, whether in India or elsewhere, as may be recognised in this behalf by the Council, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the Institute and in practice, from being known by its firm name as Chartered Accountants."

17. 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 recognised under the Auditor's Certificate Rules, 1932, be recognised 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, which are recognised 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 Cost 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.

18. 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 recognised by it. Therefore it is clear that the designation of 'Chartered Financial Analyst' is not recognised 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 unrecognised 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.

19. Sub-section (2) of Section 24-A 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).

20. 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.

21. 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, and 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.

22. Now we have to see whether the Members of 1st petitioner-Institute are entitled to use the words C.F.A. (Chartered Financial Analyst) after their names as a personal aggrandisement, and the words 'C.F.A.' are not in juxta-position to the letters 'C.A.' and there will not be any confusion in the minds of the public that C.F.As. are not C.As.

23. The word 'Chartered Accountant' has got a special significance and much deliberations took place in the Parliament in that connection. In the Book, 'History of the Accountancy Profession in India,' Volume I by G.P. Kapadia and published by the 1st respondent-Institute, in Chapter 5, under the caption 'What is in a name ?', we can have a clear idea as to how the words "Chartered Accountant" have come into being and the various considerations which weighed in the adoption of the nomenclature "The Institute of Chartered Accountants" for the Institute and of the designation "Chartered Accountant" for the members and the vicissitudes through which the same have been accomplished. During the discussions on the Companies (Amendment) Bill introduced in the Legislative Assembly on 23rd March, 1936 an organised attempt to secure the designation of "Chartered Accountants" for the members of the profession in India emerged. The Article is exhaustive and ultimately after considering the pros and cons, the Joint Committee concludes its views on the issue as follows :

"In our view, the adoption of the name" Institute of Chartered Accountants" for the integrated Institute and the adoption of the designation "Chartered Accountant" for the members of this Institute are perfectly in order. This designation has acquired a worldwide fame and great significance is attached to certification by Chartered Accountants. If this designation were to be substituted by any other, the natural result would be that such designation can still be used by persons holding foreign qualifications from Institute of Chartered Accountants abroad and we have a large number of such persons, both Indian and non-Indian in this country. Adoption of any other designation would, no doubt, be a retrograde step and against the best interest of the profession. We are, therefore, of the view that the nomenclature of the Institute should be "The Institute of Chartered Accountants of India" and the designation of the members "Chartered Accountant" and we recommend their adoption.

If past experience is to serve as a guide in this matter, we feel that no person other than a member of the unified Institute, the Institute of Chartered Accountants of India, should be permitted to use the designation "Chartered Accountant". It follows that any other designation which may be similar to or a colourable imitation of this designation should also be prohibited. In a like manner, use of designation "Incorporated Accountant", "Cost and Works Accountant", "Certified Accountant", "Certified Auditor" should also be prohibited. The members of the integrated body should not be allowed to call themselves by any designation other than the designation "Chartered Accountant" on the lines of the respective provisions now obtaining in respect of each one of the Institutes."

At the end the Joint Committee concluded :

"In the light of the above detailed discussion, the great significance attached to the designation "Chartered Accountant" which has won world acclaim as the hall-mark of professional excellence and the justification for its adoption in India should be clear to all."

24. It is, therefore, clear that the word "Chartered Accountant" has got it own significance and the discussion that was made at the time of adoption of the nomenclature by the Joint Committee, supports the case of the 1st respondent-Institute the value and the significance that is being attached to the designation "Chartered Accountant" for the members of the Institute for use of the letters 'C.A.' and 'F.C.A.' after their names. When such is the position, with such a history and background for the adoption of the designation "Chartered Accountant" can we say that the 1st petitioner-Institute is entitled to confer certificates on its members so as to enable them to use the designation. 'C.F.A.'. There is jugglery of the letters. 'F.C.A.' means a Fellow of the Institute of Chartered Accountants' and it has got a universal recognition. Whereas, 'C.F.A.' means 'Chartered Financial Analyst' and it shows that by using the abbreviated letters 'C.F.A.' the members of the 1st petitioner-Institute want it to be believed really that they have something to do with the chartered accountancy. The attempt made by them appears to my mind, to be a surreptitious attempt to trench upon the position of the members of the 1st respondent-Institute, who by reason of their association with the Institute of Chartered Accountants are entitled to calf themselves as "Chartered Accountants" and Fellow of Institute of Chartered Accountants. There is absolutely no justification for allowing the members of the 1st petitioner-Institute to use the designation 'C.F.A.' at the end of their names or any other designation as the letters would seem similar to the designation of F.C.A.'. The Joint Committee also felt that any other designation which may be similar to or a colourable imitation of the designation 'Chartered Accountant' should be prohibited. The members of the 1st petitioner-Institute will only use the abbreviated form i.e., 'C.F.A.' and not the full form 'Charteted Financial Analyst' at the end of their names and it certainly, in the eye of a reasonable man, seem similar to the designation of Chartered Accountant. There is every possibility of the persons dealing in the Accountancy profession to be misled by the designation 'C.F.A.' leave alone common people, since the persons trained by the 1st petitioner-Institute have to work in. some field or the other connected with the accounts and auditing or with the financial institutions.

25. The designation "Chartered Accountant" has won world-wide acclaim as the hall-mark of professional excellence and by long course of time the members of the 1st respondent-Institute acquired aright to use the designation 'C.A.' and 'F.C.A.' particularly in the background and history for the adoption of the said designation. The letters 'C.F.A.' are akin to the letters 'C.A.' and 'F.C.A.' and they will naturally cause confusion in the minds of the persons that are connected with the 1st respondent-Institute and the accountancy profession. Moreover, the petitioners in their affidavit state that 'CFA' is not the designation conferred by the 1st petitioner-Institute. The 1st petitioner-Institute is only a Society registered under the A.P. (Telangana Area) Public Societies Act, 1350 Fasli. It has neither recognised by the Government of India nor established under any Statute unlike the 1st respondent-Institute. The 1st petitioner-Institute never sought for the recognition of the Central Government. No authorised Institute or University would desire its own degrees and qualifications to be by-passed by qualifications or degrees granted by unauthorised or unrecognised bodies or institutions privately constituted. The contention of the petitioners that other Indian Universities are conferring Degrees MCA and DCA which stand for Master of Computer Applications and Diploma in Computer Applications has no relevance and the other contention that unless the letters 'C and 'A' are in juxtaposition, they cannot stand for Chartered Accountant and once they are separated and some other letter is interposed as in the case of 'C.F.A.' there can never be anyassociation with the profession of CAs is not tenable. When the 1st petitioner-Institute is not a recognised one, it cannot confer any degree or certificate under the style "Chartered Financial Analysts" and the recipientsalso cannot use the designation 'C.F.A.' at the end of their names.

26. The mere fact that the Institute of Chartered Financial Analysts is a global institute and it has been adopted in some other countries does not mean that they can use the designation. The petitioners have not produced any document to show that the Institute of Chartered Financial Analysts of U.S.A. has been recognised by the Government of India or the 1st respondent-Institute. The idea in forming an Institute may be a good idea but as Plato said, all good ideas become good not because of their inherent worth but rather because of who takes them up. Assuming for a moment that the Financial Analysts could be made to see that certification by the 1st petitioner-Institute was not for personal aggrandisement but rather to give their work the mental discipline which requires to achieve professionalism, they need not have the suffix 'C.F.A' at the end of their names. Besides, there was no universal acceptance for the Certificate issued by the 1st petitioner-Institute unlike the 1st respondent-Institute. According to the petitioners, the Institute has made enormous strides over the several years of its existence in the field of financial analysis and there is absolutely no doubt that further considerable progress can and will be achieved. However, this Court is not called upon to use any map or compass to assess the achievement of that progress. It is significant to note that the 1st petitioner-Institute was registered in 1984 under the name of 'Institute of Certified Financial Analysts' and gradually it was changed by addition of the words "of India". Subsequently, the word 'certified' was substituted by the word 'Chartered'. Perhaps the petitioner-Institute wanted to bring its name close to the name of the 1st respondent-Institute. It may also be a reason for changing the name because the Joint Committee exhibited the use of 'Certified Accountant' and 'Certified Auditor' and this must have made the organisers of the 1st petitioner-Institute to change the same into 'Chartered Institute'.

27. The mere fact that the Board of Management of the 1st petitioner-Institute consists of highly qualified persons in Accountancy profession and highly placed in the Society does not mean that the 1st petitioner-Institute has got a right to alter designation which indicates or purports to indicate the position or attainment of any qualification or competence similar to that of a power of the 1st respondent-Institute. Generally at the time of inauguration of an educational institute or at the time of conducting a seminar or convocation, it is but natural for the persons highly placed in the society to send congratulatory messages or commendatory letters to the organisers appreciating the services that are being rendered by a particular institute. In this case, the messages or commendatory letters issued to the 1st petitioner-Institute do not bestow any statutory seal on the Institute to confer designations which are akin or so nearly resembles it as to deceive the public. So long as the 1st petitioner-Institute has not obtained recognition from the Central Government or any State Government or any University established under any Statute or from any competent body recognised under a Statute' they cannot issue certificates which entitle the recipients to have a designation 'C.F.A' at the end of their names and which ultimately mislead the public that they are also holders of some degree or diploma conferred by the 1st respondent Institute.

28. Petitioners 2 to 17 are members of the 1st respondent-Institute and they have also completed the course of Chartered Financial Analyst. The mere fact that more than 1000 members of the 1st respondent-Institute have joined in the 1st petitioner-Institute does not give any recognition to the Institute to contend that it is a well established Institute recognised by the members of the 1st respondent-Institute. Under Section 24A of the Act, the 1st-respondent-Institute has always power to take disciplinary action against its own members and issue caution to its Members not to use any designation which is akin or so nearly resembles its designation.

29. There are many Analysts in different fileds 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 to 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'.

30. The further contention of the petitioners is that the impugned Notification and the subsequent 'caution' are violative of Articles 14 and 19 of the Constitution of India. The equal protection clause in the Constitution does not prohibit a rational classification. What all that is intended by the 1st respondent-Institute is to treat the members of its Institute as a class and prohibit all the members of that class from using the word 'C.F.A' at the end of their names, a designation conferred by the 1st petitioner-Institute. It means, the action that has been taken by the 1st respondent-Institute is an equal treatment for a complete set of persons i.e., all the members similarly situated. The complexity of modern life, the existence of social, economic and political life and diverse other considerations have necessitated the creation of the Institutes of Chartered Accountancy, Cost Accountancy and Company Secretaryship. A reasonable classification is not only permitted but is necessary if society should progress. Since the Notification deals equally with the members of 'Chartered Accountants' i.e., a well defined class, it is not obnoxious and it is not open -to the charge of denial of equal protection.

31. The CFA programme might have been increasingly attracting the attention of several business and professional executives and those working in Banking and financial institutions and the Reserve Bank of India, Industrial Finance Corporation of India, Industrial Development Bank of India and the Industrial Credit and Investment Corporation, of India Limited might have agreed to reimburse their officers and executives the tuition fee paid by them to the 1st petitioner-Institute under their respective self-education reimbursement schemes treating the programme as courses for self-development and of use to the said institutions. But the conduct exhibited by them cannot override the statutory provision and the penal actions that have been contemplated under this Act. The persons dealing with the Chartered Accountancy, Cost Accountancy and Company Secretaryship are authorised under their respective statutes to practice the respective professions. Article 51 A(j) of the Constitution deals with the fundamental duty of every citizen of India to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavourand achievement. But the right that has been given under the above Article to a citizen does not mean that he has to act in such a manner to mislead the public or use the designation which is akin to or similar which tends to mislead a member of the public into believing both designations, i.e., 'C.A.' and 'C.F.A.' to be similar, and the 1st respondent-Institute is within its competence to issue the impugned Notification and the sub- sequent 'caution'.

32. In the result, the writ petition fails and it is dismissed. No costs.