Case Note & Summary
The petitioner, Pune Chapter of Cost Accountants, a local chapter constituted under the Cost & Works Accountants Regulations, 1959, filed a writ petition challenging the decision of the Institute of Cost & Works Accountants of India (respondent no.2) to permit an additional chapter within 20 km of the petitioner's existing chapter. The petitioner contended that the amended Bye-Law 6(b) of the Cost Accountants’ Chapters (Amendment) Bye-Laws, 2010, which allows relaxation of the 20 km distance requirement, is arbitrary and ultra vires the Cost and Works Accountants Act, 1959. The petitioner also argued that the Western India Regional Council had not recommended the opening of the new chapter by a resolution, and that the new chapter would cause unfair competition and revenue loss. The respondents, represented by senior counsel, submitted that the bye-law is within the rule-making power of the Institute and that the decision is a policy matter. The Court, after hearing arguments, held that the bye-law is not ultra vires the Act, as it is a policy decision to promote the profession. The Court further held that the decision to open a new chapter is a policy matter of the Institute and the Regional Council, and unless shown to be arbitrary or mala fide, the Court cannot interfere. The petition was dismissed with no order as to costs.
Headnote
A) Professional Bodies - Bye-laws - Ultra Vires - Cost and Works Accountants Act, 1959 - The petitioner challenged the amended Bye-Law 6(b) permitting relaxation of the 20 km distance requirement for establishing a new chapter as ultra vires the Act. The Court held that the bye-law is within the rule-making power of the Institute and not ultra vires, as it is a policy decision to promote the profession. (Paras 1-4)
B) Judicial Review - Policy Decisions - Professional Bodies - The Court held that the decision to open a new chapter is a policy matter of the Institute and the Regional Council, and unless shown to be arbitrary or mala fide, the Court cannot interfere. The petitioner's grievance of unfair competition does not make the decision arbitrary. (Paras 2-4)
Issue of Consideration
Whether the amended Bye-Law 6(b) of the Cost Accountants’ Chapters (Amendment) Bye-Laws, 2010, which permits relaxation of the 20 km distance requirement for establishing a new chapter, is ultra vires the Cost and Works Accountants Act, 1959, and whether the decision to open a new chapter within 20 km of an existing chapter is arbitrary and liable to be set aside.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Bye-laws framed under an Act are not ultra vires if they are within the scope of the Act
- Policy decisions of professional bodies are not subject to judicial review unless arbitrary or mala fide
- Relaxation of distance requirement in bye-laws is permissible if it serves the object of the Act
Case Details
2011 LawText (BOM) (04) 46
Writ Petition No. 1605 of 2011
P.B. Majmudar, A.A. Sayed
Y.S. Jahagirdar (Sr. Adv.), G.S. Godbole, S.S. Kanetkar for petitioner; Abhijit Desai for respondent no.1; Abhijeet Chatterjee (Sr. Adv.), B. Boral, Ashwin Ankhad for respondent nos. 2 & 3
Pune Chapter of Cost Accountants
Union of India, Institute of Cost & Works Accountants of India, President of the Institute, Western India Regional Council of ICWAI
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Nature of Litigation
Writ petition challenging the decision of the Institute of Cost & Works Accountants of India to permit an additional chapter within 20 km of the petitioner's existing chapter.
Remedy Sought
The petitioner sought to quash the decision permitting the additional chapter and to declare the amended Bye-Law 6(b) as ultra vires the Cost and Works Accountants Act, 1959.
Filing Reason
The petitioner alleged that the amended bye-law permitting relaxation of the 20 km distance requirement is arbitrary and ultra vires, and that the new chapter would cause unfair competition and revenue loss.
Issues
Whether the amended Bye-Law 6(b) is ultra vires the Cost and Works Accountants Act, 1959?
Whether the decision to open a new chapter within 20 km of an existing chapter is arbitrary and liable to be set aside?
Submissions/Arguments
Petitioner: The amended bye-law is arbitrary and ultra vires the Act; the Western India Regional Council did not recommend the new chapter; the new chapter would cause unfair competition and revenue loss.
Respondents: The bye-law is within the rule-making power of the Institute; the decision is a policy matter and not subject to judicial review.
Ratio Decidendi
The amended Bye-Law 6(b) is not ultra vires the Cost and Works Accountants Act, 1959, as it is a policy decision to promote the profession. The decision to open a new chapter is a policy matter of the Institute and the Regional Council, and unless shown to be arbitrary or mala fide, the Court cannot interfere.
Judgment Excerpts
The petitioner is a local chapter of cost accountants with an extension in the area.
By way of this petition, the petitioner has challenged the decision of the parent body i.e. respondent no. 2 by which the respondent no. 2 permitted additional chapter which can be described as a branch within 20 kms wherein the present chapter of petitioner is established.
The grievance of the petitioner which is local chapter of Cost Accountants is that by permitting another chapter within a radius of 20 kms, it may result into unfair competition and that as per the bye laws which are amended in September 2010 and are known as Cost Accountants’ Chapters (Amendment) Bye-Laws, 2010 particularly sub-clause (b) of Bye-Law 6 by which in a given case requirement of 20 kms is relaxed, is arbitrary and ultra vires the Cost and Works Accountants Act, 1959 and Regulations framed thereunder.
Procedural History
The petitioner filed Writ Petition No. 1605 of 2011 before the Bombay High Court challenging the decision of the Institute of Cost & Works Accountants of India to permit an additional chapter within 20 km of the petitioner's existing chapter. The petition was heard by a Division Bench and dismissed on 1st April 2011.
Acts & Sections
- Cost and Works Accountants Act, 1959:
- Cost Accountants’ Chapters (Amendment) Bye-Laws, 2010: Bye-Law 6(b)
