Government loses plot in disciplining professionals

Last Updated: Sun, Jan 16, 2011 19:30 hrs

It sounds like a macabre story. The Ministry of Corporate Affairs (MCA) in the Government of India has issued certain policy directions to all the professional institutes under its administrative charge – professional institutes that regulate the professions of chartered accountancy, company secretaries and cost and works accountants on how to deal with professional members who get arrested.

"In recent times, there have been several instances where members of the professional institutes have been arrested by law enforcement agencies in connection with criminal offences," the directions read. "Members of the three professional institutes discharge important economic functions and render services to the public. The confidence of the public in the integrity of the members is vital." So far, so good. The directions go on to say: "…..the Acts governing the three professional institutes specifically provides, that a member shall be deemed to be guilty of mis-conduct if he ‘brings disrepute to the profession or the institute as a result of his action whether or not related to his professional work.’

Therefore, if a chartered accountant or a company secretary is accused of murder, he would be deemed to have brought disrepute to the profession and to the institute regulating him. According to the government, linkage to performance of professional functions is immaterial.

The directions go on to say:
"Under this provision, it is not necessary that there should be professional mis-conduct; if by his action, a member brings disrepute to the Institute, it is a sufficient ground for proceeding."

"Keeping in view the need for public confidence in the integrity of the members of the professional institutes," the Central government has issued directions "for strict compliance" to the effect that:

# When the institute notices "either on the basis of press reports or otherwise, that a member of the institute has been, or appears to have been, arrested by the police or any other law enforcement agency," it would have to get details of the developments. If the institute learns that the member was "indeed arrested, the Institute shall... initiate disciplinary action."

# If details of the reported arrest are not received within three weeks of the report, "the Institute shall nevertheless initiate disciplinary action on the basis of available information".

# The institute should "continuously monitor press reports and take note of matters involving its members which fall within the scope of these directions or otherwise bring disrepute to the profession".

# The institute should publish details of all such cases on its website, reporting the information received and the action taken by the institute, and shall keep such information "on the website till the disciplinary proceedings are concluded".

One would have thought that an administrative ministry governing the professions centrally vital to corporate India would have focused on developing policy to help professionals from the vagaries of the terrible criminal justice system in the country. Arrest of a person is so easy in the criminal justice system. There have been numerous reports in the same media that the MCA seems to take as providers of gospel truth, that show how simple it is to cause a warrant to be issued against any person. When Priyanka Gandhi was getting married, warrants got issued on the basis of complaints that she had been wedded to a complainant – just one example.

Worse, the MCA does not care whether the arrest is for misconduct on the part of the professional in his performance of professional duty. Never have media reports, so very often, ignored by courts, and so badly of proven dubious nature, been given such primacy by any government agency. The MCA has directed the institute to keep track of media reports and continuously monitor them – little caring that such a direction is bound to adversely affect the objective conduct of proceedings and formation of a fair judgement.

If one were to turn the tables, a very interesting perspective would emerge. Today, the government is widely reported in the media of having indulged in the "2G scam". The order of magnitude alleged by the Comptroller and Auditor General of India, the Constitutional professional auditor of the government’s operations, places the scam size at Rs 1,79,000 crore. What does the government do? It discredits the professional auditor. It rips apart media reports. It chooses not to arrest the accused. The same media is of no value.

Someone has completely lost the plot.

(The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own.)


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