Rules, procedures cause delay in disciplinary proceedings: Manoj Fadnis

Interview with President, ICAI

In a recent case, investors affected by the National Spot Exchange (NSEL) payment crisis dragged the Institute of Chartered Accountants of India (ICAI) to the Delhi High Court. They alleged that the complaint against Mukesh P Shah, one of the members of the Institute, (who was the auditor for National Spot Exchange Limited and several other entities involved in the alleged payment crisis) was pending for a long time before the disciplinary committee of ICAI. Manoj Fadnis, president of ICAI, who got elected to the post for the year 2015-16 in February, tells N Sundaresha Subramanian about the status of the case, the institute’s track record in recent cases and the time-consuming procedures and rules that need to be followed to bring erring members to book. Edited excerpts:

What is the reason for delay in forming the opinion for nearly two years in the NSEL case?

There is no delay as each case is required to be examined based on facts and merits and due procedure under the rules has to be adhered to. The matter is receiving due attention and it would be our endeavour for an expeditious disposal in the matter.

The matter is under examination for formation of prima facie opinion by the director (discipline) under Rule 9 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 and it is only thereafter the appropriate authority — board of discipline, disciplinary committee — as the case may be, would be required to consider and pass orders on the opinion.

Is there any timeline for disciplinary committee to take action against erring members?

There is no such time line, prescribed in the rules as notified by Government of India.

How many complaints are pending before the disciplinary committee against all erring members of the institute?

As on date, there are 116 cases pending before the disciplinary committee and 18 cases before the board of discipline for enquiry.

How many cases have been decided upon by the disciplinary committee in the past one year?

Between February 12, 2014 and February 11, 2015, 53 cases had been heard and concluded by the disciplinary committee. Board of discipline, in the same time, heard and concluded nine cases.

What steps has the institute taken to improve the speed of the disciplinary committee?

The disciplinary committee conducts  two or three meetings in a month and all efforts are made to fix the hearings in the cases pertaining to that region or place where the meetings are held.  The delay, if any, in concluding a particular case is generally on account of adjournments sought by the concerned parties. This could also be because of procedure required to be followed for citing and summoning of witnesses by the parties and witnesses to make their depositions or submissions before the committee so that interest of natural justice is maintained.