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 Misconduct
Section 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
Schedule II
Board of Discipline
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The Complaint can be withdrawn at any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
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
 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 closed
Disagrees
- 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

Reprimand

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

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
Order/ Penalty
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-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
degree
of
University
or
membership of other professional bodies, if
approved by Council, is permitted.
---Limited
advertisement
subject
guidelines issue by Council permitted
to

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 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.
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 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
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 RULES

Complaint is to filed in Form I in triplicate
before DD

If
complainant
is
a
company, Board
Resolution is necessary

Prescribed
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
BOD/DC has to be done by RPAD
DD/

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