The Hindu Business Line : `Sour grapes' in a post-qualification court battle

DIEHARD accountants are happy when members of other professional bodies do not get the same recognition as CAs get in statutory assignments. That may rake up many questions: Is that what is preventing the Institute of Cost and Works Accountants of India to change to a trendy `management' name? Would accountants be happier if secretarial compliance audit were not the exclusive domain of the ICSI's members? Will the ICAI ever see eye-to-eye with the ICFAI?

Thus, an issue that accountants may like to read is what the Madras High Court busied itself with recently in the R. Janarthanan vs The Institute of Company Secretaries of India case. The petitioner, RJ, argued in person, while the ICSI had the services of Mr Arvind P. Datar, and the contention was whether the Post Membership Qualification (PMQ) programme of the Institute be quashed.

We are aware that the ICSI was created as a body corporate under the Company Secretaries Act, 1980, as the younger of the other two, ICAI and ICWAI. Post-qualification courses are common in professional bodies. For instance, the ICAI has MAC, ISA and so on. Likewise, the ICSI too had launched, about a decade ago, its PMQ to allow its members to work for a visible seal of proficiency in this area.

"The course structure consists of two parts comprised of written examination and submission of dissertation or project report," notes the judgment and, as in any post-qualification course, only the members of the ICSI are eligible for admission to the PMQ course.

RJ joined the course in 1996, and completed Part-I in December 2001. Thereafter, he "engaged himself in doing research work for the purpose of submitting his dissertation", and submitted his dissertation too. "But on some pretext or other," RJ's dissertation was not accepted and so got returned. "Ultimately, the Institute, while rejecting the dissertation, has called upon the petitioner to pay Rs 4,000 and to start afresh the two years course."

Well, that brought RJ to the court where he pointed out "various deficiencies in the course": One, the majority of ICSI members are arts graduates, without the graduate level competency in mathematics, but the PMQ exam requires "higher level knowledge in mathematics, thus, making it impossible for the members to complete the course".

The ICSI, had not cautioned in its prospectus about "the higher level of specialisation in mathematics," RJ pointed out.

Two, RJ alleged that the ICSI did not provide "sufficient facility for the candidates to complete their study or research work"; also lacking was the availability of guides and supervisors to help in completion of dissertation of project work, he said. Therefore, he prayed that the PMQ course itself should be quashed.

On its part, the ICSI presented a counter affidavit that as the petitioner was unable to complete the course successfully, he has filed the writ petition with `ulterior motive'. The Institute also pleaded that it did not receive any financial assistance from the Central Government and so was not amenable to writ jurisdiction. The latter point, however, did not find favour with the court.

Justice P. K. Misra observed that the Institute, a creature of the Companies Secretaries Act, 1980, "has been vested with certain statutory functions". Therefore, it must be taken to be an instrumentality of the state created by a statute amenable to the writ jurisdiction, he added.

On the merits of the case, the court said: "It is prima facie apparent that the present case is an illustration of `a sour grape principle'."

RJ had joined the PMQ course after going through the prospectus, completed Part-I exam and since his dissertation has not been accepted, he "now seeks for writ of certiorari to quash the Post Membership Qualification Course itself." In the matter of laying down standard for the course, "it is not for the Court of law to substitute its wisdom" for that of the ICSI.

Though RJ's allegation of `lack of facilities' could be sweeping in nature, the ICSI has to "look into such matter and take remedial steps, if required." That, however, is no ground for quashing the course, ruled the court. Some homework for the ICSI, that is.

To rebut RJ's contention that the provisions of the Company Secretaries Act do not authorise the ICSI to introduce PMQ course, the court said: "It cannot be said that such object is not contemplated under the Act."

The judgment acknowledged that the purpose of providing PMQ is "to impart higher decree of specialisation so far as Company Secretaries are concerned". This is something that comes within "the regulation and maintenance of the status and standards of professional qualifications of the members of the Institute".

Justice Misra observed, "I do not find any merit in the writ petition." Yet, "it would be open" to RJ to re-submit the dissertation on payment of fee of Rs 2,000, as the ICSI had indicated. "It is needless to point out that when the dissertation is re-submitted such dissertation has to be evaluated on its own merit without being prejudiced by the fact that the petitioner has filed the present writ petition," added the judge.

We can draw many morals from the case, apart from realising that calling grapes sour doesn't help. At least one that may help the ICAI too is to introspect if its post-qualification courses targeted at CAs are closely tailored to practice rather than stuck to pedagogy, and whether adequate facilities are available for the members to finish the course before they grow tired and old.

AccountSpeak@TheHindu.co.in

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