Taking lessons from the JPC report on the stock market scam, which pointed out inadequate disciplinary action against erring members of Institute of Chartered Accountants of India (ICAI), Institute of Cost and Works Accountants of India (ICWAI) and Institute of Company Secretaries of India (ICSI), the government has decided to bring in a new provision by which the certificate of practice of the members may be cancelled in case of misconduct or negligence of duty.The proposals are forwarded by the Department of Company Affairs (DCA) for the consideration of the Cabinet. At present, while disciplinary actions can be taken under the three acts for misconduct or negligence of duty, there are no provisions for the cancellation of the certificate of practice. The DCA has proposed that a new sub section be inserted in the three Acts to given them the power to cancel the certificate. The department has also recommended the modifications in the disciplinary procedure of the three institutes in keeping with the recommendations of the Naresh Chandra Committee. The DCA has also proposed to strengthen the disciplinary committees which are constituted by the council of the three institutes.In respect of appeal procedures and appellate bodies, the DCA has put forward a proposal of one common appellate body of the three institutes. In the common appellate body, the chairperson and the government nominees will be the same while the council nominees will change depending on the case of the institute being considered. The other option put forward by the DCA on appellate body is that the cost be borne by the three institutes in proportion of the number of cases that come before the body.Further, while the memberships of these three institutes have gone up substantially, the strength of the councils have remained static. Further there is no uniformity on the percentage of government nominees in the three institutes. To rectify this, the DCA has proposed that the strengths of the councils can be increased by the central government up to the prescribed maximum limit.The department has also proposed that the term of the elected council of the three institutes be increased from the present three years to four years. A restriction is also expected to be provided in the amendments by which the office members of the councils would not be allowed to hold office for more than three consecutive terms.
