CODE OF CONDUCT

OVERVIEW 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

MISCONDUCT

Definition of MisconductSection 22 of the Company

Secretaries Act read with Schedule I and II

AUTHORITIES

DISCIPLINARY DIRECTORATE

BOARD OF DISCIPLINE

DISCIPLINARY COMMITTEE

Appellate Authority

Also discuss what is the course available after Appellate Authority

Also the complainant cannot file appeal before the Appellate Authority

DISCIPLINARY DIRECTORATE 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.

Misconduct

Schedule I

Board of Discipline

Schedule II

Disciplinary Committee

WITHDRAWAL

The Complaint can be withdrawn at any time subject to the permission of BOD or DC

21A. BOARD OF DISCIPLINE

CONSTITUTION Council of ICSI constitutes BOD:

Presiding Officer : Person with experience in Law and having knowledge of Disciplinary matters and profession2 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

Summary 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 closedDisagrees - DD shall further investigate

21B. DISCIPLINARY COMMITTEE

CONSTITUTION

Council constitutes DC consisting of: President or VP of Council as

Presiding Officer 2 Council members 2 Eminent persons nominated

by Central Government

Present Disciplinary Committee

Presiding officer- Mr. R. Sridharan

Members - Mr. Sanjay Grover Mr. Sudhir Babu C Mr. S. Balasubramaniam Mr. S. K. Tuteja

Council may constitute more Disciplinary Committees

DC free to prescribe own procedure

Before making any order, awarding punishment - Opportunity of being heard given to the Member.

PUNISHMENT

ReprimandRemoval of name from the Register

of Members (Even Permanently)

Fine upto Rs. 5 Lakhs

POWERS OF CIVIL COURTThe 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

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 Order/ PenaltySet 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

FIRST SCHEDULE

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-memberEntering into Partnership with a non-

member

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 degree of University or membership of other professional bodies, if approved by Council, is permitted.---Limited advertisement subject to 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

person

Accepting fees or profits from lawyers,

CS, brokers, 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 MisconductIf 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.

SECOND SCHEDULE

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

Expressing opinion in respect of an enterprise in which he/ his partner has substantial interest

Suppressing material fact in report or certificate

Failing to report material misstatementNot 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 account.

PART II- General Misconduct Contravening provisions of CS Act, 1980 or

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 RULESComplaint is to filed in Form I in

triplicate before DD If complainant is a company, Board

Resolution is necessaryPrescribed fee (non-refundable) of

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 of any information about 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.

Every communication from DD/ 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

DHANYAWAAD