1
[Disciplinary Directorate.
21. (1) The Council shall, by notification, establish a Disciplinary Directorate headed by an officer
of the Institute designated as Director (Discipline) and such other employees for making
investigations in respect of any information or complaint received by it.
(2) On receipt of any information or complaint along with the prescribed fee, the Director
(Discipline) shall arrive at a prima facie opinion on the occurrence of the alleged misconduct.
(3) Where the Director (Discipline) is of the opinion that a member is guilty of any professional or
other misconduct mentioned in the First Schedule, he shall place the matter before the Board of
Discipline and where the Director (Discipline) is of the opinion that a member is guilty of any
professional or other misconduct mentioned in the Second Schedule or in both the Schedules, he
shall place the matter before the Disciplinary Committee.
(4) In order to make investigations under the provisions of this Act, the Disciplinary Directorate
shall follow such procedure as may be specified.
(5) Where a complainant withdraws the complaint, the Director (Discipline) shall place such
withdrawal before the Board of Discipline or as the case may be, the Disciplinary Committee, and
the said Board or Committee may, if it is of the view that the circumstances so warrant, permit the
withdrawal at any stage.]
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1Substituted, by the Cost and Works Accountants (Amendment) Act, 2006, w.e.f. 17-11-2006. Prior to its substitution,
section 21 read as under :
‘21. Procedure in inquiries relating to misconduct of members of Institute.—(1) Where on receipt of information by, or
a complaint made to, it, the Council is prima facie of opinion that any member of the Institute has been guilty of any
professional or other misconduct, the Council shall refer the case to the Disciplinary Committee constituted under
section 17, and the Disciplinary Committee shall thereupon hold such inquiry and in such manner as may be
prescribed and shall report the result of its inquiry to the Council.
(2) If on receipt of such report the Council finds that the member of the Institute is not guilty of any professional or
other misconduct, it shall record its finding accordingly and direct that the proceedings shall be filed, or the complaint
shall be dismissed, as the case may be.
(3) If on receipt of such report the Council finds that the member of the Institute is guilty of any professional or other
misconduct, it shall record a finding accordingly, and shall proceed in the manner laid down in the succeeding subsections.
(4) Where the finding is that a member of the Institute has been guilty of a professional misconduct specified in the
First Schedule, the Council shall afford to the member an opportunity of being heard before orders are passed
against him on the case, and may thereafter make any of the following orders, namely :—
(a) reprimand the member;
(b) remove the name of the member from the Register for such period, not exceeding five years, as the Council
thinks fit :
Provided that where the Council is of opinion that the case is one in which the name of the member ought to be
removed from the Register for a period exceeding five years or permanently, it shall not make any order referred to in
clause (a) or clause (b), but shall forward the case to the High Court with its recommendations thereon.
(5) Where the misconduct in respect of which the Council has found any member of the Institute guilty is a
misconduct other than any such misconduct as is referred to in sub-section (4), it shall forward the case to the High
Court with its recommendations thereon.
(6) On receipt of any case under sub-section (4) or sub-section (5), the High Court shall fix a date for the hearing of
the case and shall cause notice of the date so fixed to be given to the member of the Institute concerned, the Council
and to the Central Government, and shall afford such member, the Council and the Central Government an
opportunity of being heard and may thereafter make any of the following orders, namely :—
(a) direct that the proceedings be filed, or dismiss the complaint, as the case may be;
(b) reprimand the member;
(c) remove him from membership of the Institute either permanently or for such period as the High Court thinks fit;
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(d) refer the case to the Council for further inquiry and report.
(7) Where it appears to the Court that the transfer of any case pending before it to another High Court, will promote
the ends of justice or tend to the general convenience of the parties, it may so transfer the case, subject to such
conditions, if any, as it thinks fit to impose, and the High Court to which such case is transferred shall deal with it as if
the case had been forwarded to it by the Council.
Explanation I : In this section “High Court” means the highest civil court of appeal, not including the Supreme Court,
exercising jurisdiction in the area in which the person whose conduct is being inquired into carries on business, or
has his principal place of business at the commencement of the inquiry :
Provided that where the cases relating to two or more members of the Institute have to be forwarded by the Council
to different High Courts, the Central Government shall, having regard to the ends of justice and the general
convenience of the parties, determine which of the High Courts to the exclusion of others shall hear the cases
against all the members.
Explanation II : For the purposes of this section “member of the Institute” includes a person who was a member of
the Institute on the date of the alleged misconduct although he has ceased to be a member of the Institute at the
time of the inquiry.
(8) For the purposes of any inquiry under this section the Council and the Disciplinary Committee shall have the
same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the
following matters :—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) the discovery and production of any document; and
(c) receiving evidence on affidavits.’
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[Board of Discipline.
21A. (1) The Council shall constitute a Board of Discipline consisting of—
(a) a person with experience in law and having knowledge of disciplinary matters and the
profession, to be its Presiding Officer;
(b) two members one of whom shall be a member of the Council elected by the Council and the
other member shall be the person designated under clause (c) of sub-section (1) of section
16;
(c) the Director (Discipline) shall function as the Secretary of the Board.
(2) The Board of Discipline shall follow summary disposal procedure in dealing with all the cases
before it.
(3) Where the Board of Discipline is of the opinion that a member is guilty of a professional or
other misconduct mentioned in the First Schedule, it shall afford to the member an opportunity of
being heard before making any order against him and may thereafter take any one or more of the
following actions, namely:—
(a) reprimand the member;
(b) remove the name of the member from the Register up to a period of three months;
(c) impose such fine as it may think fit which may extend to rupees one lakh.
(4) The Director (Discipline) shall submit before the Board of Discipline all information and
complaints where he is of the opinion that there is no prima facie case and the Board of Discipline
may, if it agrees with the opinion of the Director (Discipline), close the matter or in case of
disagreement, may advise the Director (Discipline) to further investigate the matter.
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1Sections 21A to 21D inserted by the Cost and Works Accountants (Amendment) Act, 2006, w.e.f. 17-11-2006.
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Disciplinary Committee.
21B. (1) The Council shall constitute a Disciplinary Committee consisting of the President or the
Vice-President of the Council as the Presiding Officer and two members to be elected from
amongst the members of the Council and two members to be nominated by the Central
Government from amongst the persons of eminence having experience in the field of law,
economics, business, finance or accountancy:
Provided that the Council may constitute more Disciplinary Committees as and when it considers
necessary.
(2) The Disciplinary Committee while considering the cases placed before it, shall follow such
procedure as may be specified.
(3) Where the Disciplinary Committee is of the opinion that a member is guilty of a professional or
other misconduct mentioned in the Second Schedule or both the First Schedule and the Second
Schedule, it shall afford to the member an opportunity of being heard before making any order
against him and may thereafter take any one or more of the following actions, namely:—
(a) reprimand the member;
(b) remove the name of the member from the Register permanently or for such period, as it
thinks fit;
(c) impose such fine as it may think fit, which may extend to rupees five lakhs.
(4) The allowances payable to the members nominated by the Central Government shall be such
as may be specified.
Authority, Disciplinary Committee, Board of Discipline and Director (Discipline) to have powers of
civil court.
21C. For the purposes of an inquiry under the provisions of this Act, the Authority, the Disciplinary
Committee, Board of Discipline and the Director (Discipline) shall have the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the
following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) the discovery and production of any document; and
(c) receiving evidence on affidavit.
Explanation.—For the purposes of sections 21, 21A, 21B, 21C and 22, “member of the Institute”
includes a person who was a member of the Institute on the date of the alleged misconduct
although he has ceased to be a member of the Institute at the time of the inquiry.
Transitional provisions.
21D. All complaints pending before the Council or any inquiry initiated by the Disciplinary
Committee or any reference or appeal made to a High Court prior to the commencement of the
Cost and Works Accountants (Amendment) Act, 2006 shall continue to be governed by the
provisions of this Act, as if this Act had not been amended by the Cost and Works Accountants
(Amendment) Act, 2006.]
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[Professional or other misconduct defined.
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1Substituted by the Cost and Works Accountants (Amendment) Act, 2006, w.e.f. 17-11-2006. Prior to its substitution,
section 22 read as under :
‘22. Misconduct defined.—For the purposes of this Act, the expression “professional misconduct” shall be deemed to
include any act or omission specified in any of the Schedules, but nothing in this section shall be construed to limit or
abridge in any way the power conferred or duty cast on the Council under sub-section (1) of section 21 to inquire into
the conduct of any member of the Institute under any other circumstances.’
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22. For the purposes of this Act, the expression “professional or other misconduct” shall be
deemed to include any act or omission provided in any of the Schedules but nothing in this
section shall be construed to limit or abridge in any way the power conferred or duty cast on the
Director (Discipline) under sub-section (1) of section 21 to inquire into the conduct of any member
of the Institute under any other circumstances.]
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[Constitution of Appellate Authority.
22A. The Appellate Authority constituted under sub-section (1) of section 22A of the Chartered
Accountants Act, 1949 (38 of 1949), shall be deemed to be the Appellate Authority for the
purposes of this Act subject to the modification that for clause (b) of said sub-section (1), the
following clause had been substituted, namely :—
“(b) the Central Government shall, by notification appoint two part-time members from amongst
the persons who have been members of the Council of the Institute of Cost and Works
Accountants of India for at least one full term and who is not a sitting member of the
Council;”
Term of office of members of Authority.
22B. A person appointed as a member shall hold office for a term of three years from the date on
which he enters upon his office or until he attains the age of sixty-two years, whichever is earlier.
Procedure, etc., of Authority.
22C. The provisions of section 22C, section 22D and section 22F of the Chartered Accountants
Act, 1949 (38 of 1949) shall apply to the Authority in relation to allowances and terms and
conditions of service of its Chairperson and members and in the discharge of its functions under
this Act as they apply to it in the discharge of its functions under the Chartered Accountants Act,
1949.
Officers and other Staff of Authority.
22D. (1) The Council shall make available to the Authority such officers and other staff members
as may be necessary for the efficient performance of the functions of the Authority.
(2) The salaries and allowances and conditions of service of the officers and other staff members
of the Authority shall be such as may be prescribed.
Appeal to Authority.
22E. (1) Any member of the Institute aggrieved by any order of the Board of Discipline or the
Disciplinary Committee imposing on him any of the penalties referred to in sub-section (3) of
section 21A and sub-section (3) of section 21B, may within ninety days from the date on which
the order is communicated to him, prefer an appeal to the Authority:
Provided that the Director (Discipline) may also appeal against the decision of the Board of
Discipline or the Disciplinary Committee to the Authority if so authorised by the Council, within
ninety days:
Provided further that the Authority may entertain any such appeal after the expiry of the said
period of ninety days, if it is satisfied that there was sufficient cause for not filing the appeal in
time.
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1Sections 22A to 22E inserted, by the Cost and Works Accountants (Amendment) Act, 2006, w.e.f. 17-11-2006.
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(2) The Authority may, after calling for the records of any case, revise any order made by the
Board of Discipline or the Disciplinary Committee under sub-section (3) of section 21A and subsection (3) of section 21B and may —
(a) confirm, modify or set aside the order;
(b) impose any penalty or set aside, reduce, or enhance the penalty imposed by the order;
(c) remit the case to the Board of Discipline or Disciplinary Committee for such further enquiry
as the Authority considers proper in the circumstances of the case; or
(d) pass such other order as the Authority thinks fit:
Provided that the Authority shall give an opportunity of being heard to the parties concerned
before passing any order.]