Order holding CS guilty of misconduct set aside for non opportunity on quantum of punishment

Order holding CS guilty of misconduct set aside as no opportunity was provided on the question of quantum of punishment irrespective of admission of guilt. 

ABCAUS Case Law Citation:
ABCAUS 2870 (2019) (04) AA

The allegation against the appellant company secretary was that she had committed Professional Misconduct having issued three Secretarial Compliance Certificates all on a single day to a Limited company which was in gross violation of the law.

The Disciplinary Committee of the Institute of Company Secretaries of India (ICSI), after considering the material on record and the nature of issues involved and in totality of the circumstances of this case and the in the light of the Respondent pleaded guilty, formed the opinion that the appellant was guilty of Professional Misconduct under item (7) of the Part-I of the Second Schedule to the Act which says that a company Secretary in practice shall be deemed to be guilty of professional misconduct, if he/she does not exercise due diligence, or is grossly negligent in the conduct of his professional duties.

Accordingly, the Disciplinary Committee passed the final order awarding the punishment of removal of her name from the Register of Members for a period of 60 day and fine of Rs. 35000/-.

Before the Appellate Authority (AA), the appellant submitted that she had admitted her guilt after receipt of an advice from the Members of Disciplinary Committee to plead guilty so as to get rid of proceedings in this matter further under impression that she will be awarded only lighter monitory punishment.

The Appellate Authority noted that the Order passed by the Disciplinary Committee itself stated that the punishment was also announced to the CS on the order being reserved for announcement, to save her from the efforts and cost of making yet another visit to Delhi.

The AA also went through the provisions of the Company Secretaries Act, 1980 (the Act) and the the Company Secretaries (Procedure of Investigations of Professional and Other Misconduct of Cases) Rules, 2007 and found that the provisions of the Act as well as Rules do not empower the Disciplinary Committee to dispense with the mandatory requirements of providing an opportunity of being heard on account of quantum of punishment on the ground of saving effort and cost of the respondent in the Disciplinary proceedings.

However, the Disciplinary Committee had not followed the due procedure as prescribed statutorily as no opportunity of being heard was provided to the appellant on the question of quantum of punishment irrespective of her admission of guilt conveyed by her letter.

The AA quashed the impugned order and remanded the matter back to the Disciplinary Committee of the Institute of Company Secretaries of India with the directions to hear both the parties afresh on account of guilt as well as in respect of quantum of punishment in accordance with the applicable provisions of the Act, and Rules and pass a fresh order.

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