Page 414 - CA Final PARAM Digital Book.

In this case, C.A. Bahubali is Special Executive Magistrate, engaged in the occupation of trading in commodity
derivatives and also took over as the Executive Chairman on 01.04.2021. In this context, it may be noted that
the Special Executive Magistrate which is generally permitted for Members of the Institute in practice,
further specific permission is required for holding the position of Executive Chairman and getting engaged in
the occupation of trading in commodity derivatives.

In the given situation, C.A. Bahubali is acting as Special Executive Magistrate which is generally permitted for
Members of the Institute in practice. Further, He is engaged in the occupation of trading in commodity
derivatives which is not covered under the general permission. He also took over as the Executive Chairman
for which specific permission is required. CA. Bahubali got the permission for the same from the Council of
ICAI.

Conclusion: Hence, CA. Bahubali is not guilty for acting as Special Executive Magistrate as it is covered under
the general permission. He is also not guilty for holding the position of Executive Chairman after getting
specific permission of the Institute. However, he is guilty of professional misconduct under Clause (11) of
Part I of First Schedule of Chartered Accountants Act, 1949 for getting engaged in the occupation of trading
in commodity derivatives which is not covered under the general permission.

QNO First Schedule, Part 1,Cl,11--Business Occupation(Multiple Points) Old Course – (M23R)
713.600 TITANIUM CNO -- PE.1280 New Course – (SM23)
Mr. S is a practising chartered accountant based out of Chennai. During the weekends, he involved himself
in equity research and used to advise his friends, relatives and other known people who are not his clients.
Apart from this, he was also involved as a paper - setter for Accountancy subject in the school in which he
studied. He also owned agricultural land and was doing agriculture during his free time. During the year
20X1, heavy losses were incurred in agricultural activity due to natural calamities and misfortune, and he

lost almost all of his wealth and became undischarged insolvent. After a few court hearings, finally, in the
year 20X3, he was declared discharged insolvent and obtained a certificate from the court stating that his
insolvency was caused by misfortune without any misconduct on his part. You are required to comment
on the above situation with reference to the Chartered Accountants Act, 1949 and Schedules thereto,
(especially from the point of section 8: Entry of name in Register of Members).
Answer Given situation can be visualised in following parts:
A. Mr S used to involve himself in equity research and used to advise his friends, relatives and other

known people: As per the recent decisions taken by the Ethical Standards Board of ICAI, a Chartered
Accountant in practice may be an equity research adviser, but he cannot publish a retail report, as
it would amount to other business or occupation.

In the given case, though Mr S is involved in doing equity research and in advising people, it is clear
that he does not publish any retail report of his research. Hence, this act of Mr S shall not make him
guilty of professional misconduct.

B. Mr S is involved in paper-setting for the Accountancy subject in the school where he studied. He also
owns agricultural land and does agriculture activities: As per Clause 11 of Part I of First Schedule of
Chartered Accountants Act and regulation 190A of Chartered Accountants Regulations, a Chartered
Accountant in practice is deemed to be guilty of professional misconduct if he engages in any
business or occupation other than the profession of chartered accountant unless permitted by the
Council so to engage.

Further, Regulation 190A mentions the 'Permissions granted Generally' to engage in a certain
category of occupations, for which no specific permission of Council is required. Those cases include:

- Valuation of papers, acting as paper-setter, head examiner or a moderator, for any examination.
- Owning agricultural land and carrying out agricultural activities.

Therefore, in the given case, the activities of Mr S as a paper-setter and involvement in agricultural
activities do not make him guilty of professional misconduct.

C. Mr. S was discharged insolvent: Disabilities for the Purpose of Membership: Section 8 of the
Chartered Accountants Act, 1949 enumerates the circumstances under which a person is debarred
from having his name entered in or borne on the Register of Members, If he, being a discharged
insolvent, has not obtained from the court a certificate stating that his insolvency was caused by
misfortune without any misconduct on his part. Here it may be noted that a person who has been
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