Ex President of Institute of Actuaries found guilty of professional misconduct for submitting fake air travel bill. Life ban and fine reduced by Appellate Authority
ABCAUS Case Law Citation:
ABCAUS 2416 (2018) 07 AA
The instant appeal was filed by the appellant actuary against the order passed by the Disciplinary Committee of the Institute of Actuaries of India (the Institute) holding him guilty of Professional or other misconduct.
In 2010, the Prosecution Director informed the Disciplinary Committee members of the Institute that the appellant actuary who happened to be the one of the council member of the Institute, on behalf of the Insurance Regulatory Development Authority (IRDA) had submitted forged air tickets to the Institute and claimed reimbursement for the same.
It was alleged that the appellant had manipulated the tickets in different ways whereas the information collected from the airlines concerned were totally contrary to the details of the travels claimed in his bills submitted and reimbursed by the Institute.
The appellant his written statement (WS) stated that the travel bills submitted to the Institute, had some inadvertent mistakes, due to his pressing pre-occupations and he himself brought this to the notice of the then President of the Institute with bonafide intention to maintain high standards in public life. He also told to the then President clearly that the excess amount of claim could be informed to him so that he would pay back the excess. Accordingly, this matter was discussed in the Council meeting. Subsequently, as informed in the Council, he sent a Cheque to the Institute which after recovering the appropriate amount returned the balance amount to him.
The Prosecution Director opined that it would amount stretching a bit too far to invoke misconduct provisions in this particular case and expressed his Prima-Facie Opinion (PFO) that the appellant was not guilty of any misconduct falling within the meaning of Part-IV A (2) of the Schedule read with Section 31 of the Actuaries Act, 2006.
The PFO so formed by the Prosecution Director was placed before the Disciplinary Committee of the Institute. The Disciplinary Committee agreed with the findings of the Prosecution Director that the appellant actually attended the meetings on the relevant dates was not disputed. But there was absolutely no denial of each of the acts of the Commissions and Omissions alleged nor any attempt made to counter the allegation by bringing any evidence. Thus, the statements made by the appellant was treated as an admission of the allegations made. The Disciplinary Committee did not agree with the PFO of “Not Guilty” formed by the Prosecution Director and decided to apply the provisions of Section 31 of the Actuaries Act, 2006 and proceeded under Chapter-IV of the Actuaries (Procedure for Enquiry of Professional and Other Misconduct) Rules, 2008.
Accordingly, the Disciplinary Committee unanimously concluded that the appellant was guilty of misconduct in terms of Section 31 of the Actuaries Act, 2006 and Part-III (1) & (3) and Part-IV (A) (2) of the Schedule to the Act and ordered the removal of his name from the register of members permanently with immediate effect and also imposed a fine of Rs. 5,00,000/.
Aggrieved of an ex-parte Order passed by the Council of the Institute of Actuaries of India the appellant had preferred this appeal before the Appellate Authority.
It was contended that the Impugned Order passed by the Disciplinary Committee was improper, mala-fide, invalid, illegal and unreasonable as the allegations made against the Appellant were already considered and decided by the Executive Council, whereby the matter was treated to be closed.
Further, it was also submitted that the Disciplinary Committee had failed to consider the rules regarding Travel allowance framed by the Institute. Furthermore, it was submitted that the allegations against the appellant were made with ulterior motive and in un-lawful manner to tarnish the image of the Appellant, who has been not only the President of the Institute of Actuaries of India but also occupied a number of position, viz., an elected member of the Executive Council, Vice President, President of the Actuarial Society of India in addition to a member of the Solvency Committee of the International Actuarial Association, Vice Chairperson of the Solvency Committee of the International Association Insurance Supervisors, a Member of the Insurance Regulatory & Development Authority besides serving as the Economic Advisor to the Governor of the Reserve Bank of India.
The Appellate Authority opined that while there was no scope to interfere with the Order passed by the Disciplinary Committee of the Institute on merits but the punishment awarded was exorbitant and did not commensurate with the misconduct.
The Appellate Authority observed that the reimbursement of excess amount already stood paid by the Appellant on his own not only to the Institute of Actuaries of India but also to the IRDA and the age of the Appellant was about 69 years. Further since the passing of order by the DC, he had already suffered a lot being out of practice of the profession as a member of the Institute of Actuaries of India till date i.e., about four years. Thus, the interest of justice will be met, the punishment is modified and the penalty is reduced.
Accordingly the Appellate Authority reduced the ban for the period till the of receipt of its Order only as against the removal of his name permanently and the fine was also reduced to Rs. 2 lakhs.
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