The question related to whether ICAI can initiate investigation regarding professional misconduct against it members on suo moto basis or not has arose in the recent professional misconduct proceedings initiated against the Joint auditors of Punjab National Bank in the matter of infamously known Nirav Modi Scam
As per section 21 of Chartered accountants Act ICAI can initiate professional misconduct proceedings based on the complaint received against the member or based on any information available with the institute
The Court further takes into consideration the significance of the prefix ―any, to the word information as occurring in Section 21 of the 1949 Act. The use of the word ―any, before information in Section 21 clearly appears to be a conscious attempt by the authors of the statute to confer an expansive meaning upon the word and not confine or whittle it down to the rigours and formality that may be attached to a written complaint that may be received by the Institute.
The expression “any information” as used in Section 21 thus appears to have been consciously employed so as to enable the Institute to make an investigation with respect to professional conduct of its members untrammelled by rigours of form.
The Court thus comes to the firm conclusion that the words ―information‖ and ―complaint‖ appear to have been consciously used and placed in Section 21 in order to enable the Institute to proceed against a particular member unfettered by the absence a written complaint being provided to the Institute.
Based on above interpretation of section 21 of chartered accountants Act, Court has concluded that ICAI can suo moto initiate Proceedings related to professional misconduct against the members of Institute