Code of Conduct by S.Kumar
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CODE OF CONDUCT
The Company Secretaries Act, 1980: Chapter V – Section 21 to 22E First Schedule Second Schedule
The Company Secretaries (Procedure of Investigations of
Professional and Other Misconduct and Conduct of Cases) Rules, 2007
Definition of Misconduct Section 22 of the Company Secretaries Act read with Schedule I and II
AUTHORITIES DISCIPLINARY DIRECTORATE BOARD OF DISCIPLINE
Also discuss what is the course available after Appellate Authority Also the complainant cannot file appeal before the Appellate Authority
Council has constituted Disciplinary Directorate (DD).
Complaint would be first received by DD then he will form a prima facie opinion.
Depending on the Schedule which covers the Misconduct, DD further places the matter before
Board of Discipline or Disciplinary Committee.
Board of Discipline
WITHDRAWAL The Complaint can be withdrawn at any time subject to the permission of BOD or DC
21A. BOARD OF DISCIPLINE
Council of ICSI constitutes BOD:
Person with experience in Law and having knowledge of Disciplinary matters and profession
2 Members :
1 Elected Council member Chief Executive of the Institute appointed under section 16(1)(c) of the Act
DD functions as Secretary to the BOD
procedure adopted by
BOD for disposal of complaints If
found guilty, an Opportunity of
being heard given to the member
before making any order.
PUNISHMENT Reprimand Removal
of the name from the
Register of members upto 3 months Fine
upto Rs. 1 Lakh
If DD is of the view that there is no prima facie case in the complaint, he will inform accordingly to the board.
If Board Agrees
- File closed
- DD shall further investigate
21B. DISCIPLINARY COMMITTEE
CONSTITUTION Council constitutes DC consisting of:
President or VP of Council as
2 Council members
2 Eminent persons nominated by Central Government
Present Disciplinary Committee
Presiding officer- Mr. R. Sridharan
Mr. Sanjay Grover Mr. Sudhir Babu C Mr. S. Balasubramaniam Mr. S. K. Tuteja
Council may constitute more Disciplinary
DC free to prescribe own procedure
punishment - Opportunity of being
heard given to the Member.
Removal of name from the Register of Members (Even Permanently)
Fine upto Rs. 5 Lakhs
POWERS OF CIVIL COURT The Authority, Disciplinary Committee, Board of Discipline
and Director Discipline are vested with the powers of civil court under the Code of Civil Procedure, 1908 in respect of the following matters, namely:
Summoning & Enforcing attendance
Examining on oath
Discovery & Production of Documents
Receiving evidence on Affidavit
Person ceasing to be a member of ICSI is
subject to code of conduct if alleged misconduct was conducted during the period of his membership.
Misconduct could be professional as well as
other misconduct, the other misconduct has been included in Part – IV of First Schedule and Part-III of Second Schedule
Appellate Authority for CA, CS and ICWA is
same except that the two members will be nominated by the respective Institute. Three members including the Chairman will be common.
The Authority shall function in accordance
with Section 22A – 22E of the CS Act.
Section 22E provides for appeal to authority:
Any member aggrieved by order of BOD/DC may within 90 days from communication of order to him, prefer an appeal
DD (subject to authority from the Council) may also file an appeal against decision of BOD/ DC
Delay beyond 90 days can be condoned by Appellate Authority
Appellate Authority may Confirm Modify Set Aside
OR Remit the case back to BOD/ DC
Opportunity of being heard given to
the concerned parties
There is no provision for filing appeal by the complainant.
In such a scenario writ is the only option
PART I- Misconduct in relation to PCS
Allowing a non-member to practice in one’s name
Sharing fees with a non member
Accepting profits of a Professional work of a person, who is a non-member
Entering into Partnership with a nonmember
Securing Professional assignment through a person unless he is an employee or a partner
Soliciting clients or professional work directly
or indirectly. ---Applying/ Requesting/ Inviting/ Securing work from other PCS permitted ---Replying to tenders or enquiries permitted.
Advertising his attainment or services or using designation other than CS ---Displaying
membership of other professional bodies, if
approved by Council, is permitted. ---Limited
guidelines issue by Council permitted
Accepting position of PCS without communicating with earlier incumbent in writing.
Charging fees as a percentage of profit or contingent on finding of result of the assignment.
Engaging in any business/ occupation other than
profession of PCS ---Directorship in other companies is permitted
Allowing a non partner to sign on one’s behalf any certificate to be given as PCS.
PART II- Misconduct in relation to members in service
Sharing of Emoluments with any other
Accepting fees or profits from lawyers, CS,
agents or customers by way of
Commission or Gratification
PART III- Misconduct in respect of all Members
Describing oneself as fellow without being FCS.
Not supplying information called by Council/
Committee of the Council/ DD/ BOD/ DC/ QRB or Appellate Authority
Giving false information for procuring assignment.
Carry-on practice as a Company Secretary without proper Certificate of Practice.
PART IV- Other Misconduct
If held guilty by any court for an offence punishable with imprisonment for a term upto 6 months
Bringing disrepute to the profession or the institute due to his action whether related to Professional work or otherwise.
PART I- Misconduct in relation to PCS
Disclosing confidential information of client to others
Issuing certificate or report without examining the facts by himself or by his partner or employee or other PCS
Vouching accuracy of forecast or future transaction
enterprise in which he/ his partner has substantial interest
Suppressing material fact in report or certificate
Failing to report material misstatement
Not exercising due diligence or being negligent in Professional duties
Failing to obtain sufficient information before reporting or certifying.
Failing to bring out material departure from acceptable procedure relating to Secretarial practice.
Not keeping advances received from client for expenses in separate bank
PART II- General Misconduct
regulations or guidelines issued by the Council.
Disclosing confidential information of a employee to others
Including false information to Institute, Council,
Committee of Council, DD, BOD, DC, QRB or Appellate authority.
Embezzling money received in Professional capacity
PART III- Others If held guilty by the court for an offence
punishable with an imprisonment for a term exceeding six months.
The Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007
SUMMARY OF RULES
Complaint is to filed in Form I in triplicate before DD
Resolution is necessary
Rs. 2500/- to be paid
Fee to be paid by Demand Draft in favour of ICSI
Unique reference number given by DD if complaint found to be in order
A fresh complaint may be clubbed with the previous complaint on the same matter against the same member
Complainant has right to rectify the defects in complaint & resubmit the same. Such rectification to be done within given time
Action can be taken suo -moto on receipt
misconduct or on a complaint.
Any anonymous information received by DD is not to be entertained.
Within 60 days of receipt of complaint a copy of complaint has to be forwarded
to PCS or Member
Written statement to be filed within 21 days by the defendant
Rejoinder to be filed within 21 days by the Complainant.
BOD/DC has to be done by RPAD
In case addressee refuses to receive it is deemed to have been served on addressee
Under rule 12 DD may refuse to entertain the
complaint/information if filed/received after seven years of commission of the alleged misconduct.
Principle of natural justice required to be followed