
Professional misconduct Under section 9 of the Company Secretaries Act, 1980, the Council of the Institute is mandated to manage the affairs of the Institute and discharge the functions assigned to it under the Act. The Council has authority to exercise disciplinary powers by instituting inquiry into cases where it is prima facie of the opinion that a member is guilty of professional or other misconduct. Section 21 of the Act and Regulations 15, 16, 17, 18 & 19 of the Company Secretaries Regulations, 1982 lay down the procedure to be followed in an enquiry to know that for the purpose of disciplinary proceedings, 'member of the Institute' includes a person who was a member of the Institute on the date of the alleged misconduct although he has ceased to be a member at the time of enquiry. |
DEFINITION OF PROFESSIONAL OR OTHER MISCONDUCT Section 22 of the Act deems any act or omission specified in the Schedules to the Act to be a misconduct. It categorically provides that the Councils power to enquire into the conduct of any member under any circumstances is in no way limited or abridged. |
Professional misconduct in relation to members of the Institute is broadly categorized as below:
|
A) Professional misconduct in relation to Company Secretaries in Practice (Part I of the First Schedule containing 11 clauses) |
A Company Secretary in Practice shall be deemed to be guilty of professional misconduct, if he |
|
B) Professional misconduct in relation to members of the Institute in service (Part II of the First Schedule containing two clauses) |
A member of the Institute (other than a member in practice) shall be deemed to be guilty of professional misconduct, if he, being an employee of any company, firm or person |
(1) pays or allows or agrees to pay, directly or indirectly, to any person any share in the emoluments of the employment undertaken by him; (2) accepts or agrees to accept any part of fees, profits or gains from a lawyer, a Company Secretary or broker engaged by such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification. |
C) Professional misconduct in relation to members of the Institute generally (Part III of the First Schedule containing three clauses) |
A member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct, if he |
(1) not being a Fellow of the Institute, acts as a Fellow of the Institute; (2) does not supply the information called for, or does not comply with the requirements asked for, by the Institute, Council or any of its Committees, Director (Discipline), Board of Discipline, Disciplinary Committee, Quality Review Board or the Appellate Authority; (3) while inviting professional work from another Company Secretary or while responding to tenders or enquiries or while advertising through a write up, or anything as provided for in items (6) and (7) of Part I of this Schedule, gives information knowing it to be false. |
D) Other misconduct in relation to members of the Institute generally (Part IV of the First Schedule containing two clauses) |
A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if |
(1) he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months; (2) in the opinion of the Council, he brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work.] |
E) Professional misconduct in relation to Company Secretaries in Practice (Part I of the Second Schedule containing ten clauses) |
A Company Secretary in practice shall be deemed to be guilty of professional misconduct, if he— |
(1) discloses information acquired in the course of his professional engagement to any person other than his client so engaging him, without the consent of his client, or otherwise than as required by any law for the time being in force; (2) certifies or submits in his name, or in the name of his firm, a report of an examination of the matters relating to company secretarial practice and related statements unless the examination of such statements has been made by him or by a partner or an employee in his firm or by another Company Secretary in practice; (3) permits his name or the name of his firm to be used in connection with any report or statement contingent upon future transactions in a manner which may lead to the belief that he vouches for the accuracy of the forecast; (4) expresses his opinion on any report or statement given to any business or enterprise in which he, his firm, or a partner in his firm has a substantial interest; (5) fails to disclose a material fact known to him in his report or statement but the disclosure of which is necessary in making such report or statement, where he is concerned with such report or statement in a professional capacity; (6) fails to report a material mis-statement known to him and with which he is concerned in a professional capacity; (7) does not exercise due diligence, or is grossly negligent in the conduct of his professional duties; (8) fails to obtain sufficient information which is necessary for expression of an opinion or its exceptions are sufficiently material to negate the expression of an opinion; (9) fails to invite attention to any material departure from the generally accepted procedure relating to the secretarial practice; (10) fails to keep moneys of his client other than fees or remuneration or money meant to be expended in a separate banking account or to use such moneys for purposes for which they are intended within a reasonable time. |
F) Professional misconduct in relation to members of the Institute generally (Part II of the Second Schedule containing four clauses) |
A member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct, if he— |
(1) contravenes any of the provisions of this Act or the regulations made thereunder or any guidelines issued by the Council; (2) being an employee of any company, firm or person, discloses confidential information acquired in the course of his employment, except as and when required by any law for the time being in force or except as permitted by the employer; (3) includes in any information, statement, return or form to be submitted to the Institute, Council or any of its Committees, Director (Discipline), Board of Discipline, Disciplinary Committee, Quality Review Board or the Appellate Authority any particulars knowing them to be false; (4) defalcates or embezzles moneys received in his professional capacity. |
G) Other misconduct in relation to members of the Institute generally (Part III of the Second Schedule containing one clause) |
A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term exceeding six months. |