Need for CAs to know IPC

ICAI Bhawan, New Delhi

Elections to the Central Council and Regional Councils of the Institute of Chartered Accountants of India would be held on 7^th and 8^th December 2018. CAs standing for elections are contacting for first preference vote like any other sundry politician. I used the term ‘any other sundry politician’ simply because, once the elections are over, these Members even refuse to look at you when you come across each other at any place or event.

For me ICAI is another UPA. Nepotism and Ghettoism is the hallmark. Disciplinary Council works only by ‘not working’. PM Narendra Modi had also brought this to the notice of the ICAI couple of years ago by highlighting the huge pendency of disciplinary cases. PM also reminded CAs of their duties and scolded them not to advice clients on how to evade taxes by dubious means with huge applause from the CAs themselves. However, I am not going into that aspect here.

The Institute is made from the members themselves. Unless the members are clean and upright in their own professional conduct, we cannot have an Organization that will live up to the expectations of the Public from this profession.

The observations made in an article dated 13/11/2018, by CA Amresh Vashisht  - “The President offices were having the allegations of money misappropriation, council members shaking hands with the Big 4, council members in jail, council members in armed booth capturing, council members disciplinary scams, council expenditure scams, examination scam and so on. All such events resulted in depreciation of the brand value of Chartered Accountants.” – underline one point that unless the individual members stand tall, the Institute would not stand tall.

I am covering only one aspect of the professional/individual conduct of a CA – viz., the way they deal with their articled clerks (CA students).

In last five years, many CA students from Mumbai, Thane, Nashik and Pune had contacted me on how to deal with the harassment meted out to them by their principal CA and seek transfer to a humane CA. The tactics employed by the Principal CA are nothing short of a harassment of criminal nature. I have guided them to deal with the errant CA without aggravating the situation, to the extent possible. But some CAs need thorough cleansing.

This is something more than a mere “professional and other misconduct” by a Chartered Accountant within the meaning of the CA Act and CA Regulations. I want to share one such case from Pune as this case amongst the cases that came to me had crossed all known barometers of civility, propriety and sobriety. The name of the CA student as well as her Principal CA is withheld at her request.

This female was an articled clerk and was pursuing her CA course. She wanted a transfer from her existing principal CA to another CA. The reasons for seeking transfer were as follows:

1.    Regular use of derogatory language and constant name calling such as idiot, dumb, fool, donkey etc.;

2.    Expressing constant displeasure and rude attitude;

3.    Not even allowing to have lunch during lunch time;

4.    Not allowing to do GMCS-I course before completion of one year of articleship thus further leading to postponement of her CA final attempt by six months and further derisively stating in public that “You will not be able to clear the CA final exam”.

5.    Not at all caring about her career & wasting six months of her life which has caused her to lose her self-confidence.

6.    When she requested the Principal CA to give her transfer to another CA firm, the Principal CA started yelling & shouting on top of his voice in a fit of rage & bluntly refused stating “I will not sign your transfer document, do what you want”.

7.    Threatening to ruin her career by using his contacts in the Regional and Central Council of the CA Institute.

The constant abuse and name calling had taken a toll on her health and the poor girl had lost about 6 kgs in 8 months.

She had approached some CAs in the Pune Branch of ICAI for help and guidance. However, to her shock, everyone advised her to adjust to the said CA. They not only discouraged her from complaining to the CA Institute but also cautioned her against filing any complaint on the ground that it would ruin her career.  

When her father finally approached me, I told him it is useless to approach Disciplinary Council or any other Council of the ICAI. My experience with one Central Council member has been discouraging so much so that I feel Council is a ‘coterie’. However, I tried to contact one member of WIRC. The gentleman did not respond to my repeated WhatsApp and SMS messages. Ironically, this CA had called me repeatedly for first preference vote before previous election. Since I do not want to embarrass this member, I am withholding his name. However, his nonresponse made me to refer to the news item 'ICAI disciplinary panel decisionswere forged' that appeared in Times of India on 23^rd May, 2014.

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Considering this experience and the sorry state of affairs as per the news item, I advised her to forget the provisions of the CA Act and CA Rules and invoke the provisions of Indian Penal Code and other applicable laws dealing with harassment at work place, intimidation, humiliation, torture, etc. I advised the girl to send her harassing boss for a thorough cleansing under IPC in a Laundromat in Police Station.

The Girl gathered courage and finally lodged the complaint with Women’s Cell, Crime Branch of the Police as per the advice given by me. One phone call from the Women’s Cell and the errant Principal CA signed the transfer form with profound apologies. His threats of ruining the career and taking revenge evaporated in thin air. The harsh reality that his actions as narrated above have exposed him to criminal prosecution attracting a fairly long sentence of imprisonment suddenly dawned on him. The justice was done. This quick and effective justice would not have been possible under the present non-existing mechanism in the Institute.

ICAI has to be more sensitive to the plight of Articled Clerks arising out of inhumane treatment given by their own members and a students’ resultant desire for transfer from their existing Principal. The existing Principal is always reluctant as he stands to lose the cheap labour force. I use the terminology ‘cheap labour force’ mainly because as compared to the salary paid to a normal clerk, the stipend paid under the CA Regulations is always at a substantially lower level. Even though the stipend is not the issue at all, the ICAI has to show sensitive approach towards the issue of harassment meted out to the Articled Clerks when they apply for transfer and/or leave.

It should be noted that ‘articleship agreement’ executed between the Principal CA and the CA Student does not make that student a ‘bonded labourer’ of that Principal CA.

I am told by a sitting Central Council Member that unfortunately, the ICAI has no such mechanism in place at the moment, even though the matter has been under active consideration for quite a long time. The reason why ICAI has no mechanism in place again defies all barometers of logic – to say the least. I am told that according to the Central Council, ‘articleship agreement’ is a private agreement between the CA and the Student and the ICAI cannot do anything in case of dispute between the Principal CA and the Student. Simply bizarre and absurd – to say the least.

Is it a case of the Central Council that the articleship agreement is not an essential and inbuilt ingredient of CA course formulated under the CA Act and CA Regulations?

Is it something that is undertaken voluntarily by the students outside the ambit of CA course by mutual negotiation with the Principal CA?

Is it not a fact that the entire agreement in the prescribed Form 102 is formulated by the Central Council under Regulation 45?

Is it not a fact that the CA and the Student has to sign on the dotted lines by filling only their individual particulars?

Then how does the agreement become private agreement between the CA and the Student? Read Regulation 45 and other relevant regulations carefully. It is high time Central Council Members did a crash refresher course in CA Act and CA Regulations.

Remove this mandatory condition and then see how many students sign such articleship agreements with CA firms to work! Such bizarre argument not only exposes the insensitivity of the Council Members but also their lack of knowledge. Or is it a case that since Central Council members themselves have many article clerks, they are wary of creating such a platform?

It is high time ICAI also introduced one paper on Indian Penal Code in the final course that would sensitize the CAs about how many of their acts of omission and commission committed in the course of their practice would constitute criminal offence under IPC and what are the consequences of such criminal offence.

The ICAI should also set up mechanism where complaints against refusal to give transfer would be dealt with within 2-3 working days without any bias against the concerned student.

Hope ICAI listens.  

Supreme Court’s impulsive or compulsive crackdown on firecrackers during Dipavali:

It seems, the Supreme Court impulsively and compulsively wakes up every year before the Hindu Festival of Dipavali. It all started in 2016 and has continued in Dipavali of 2017 and 2018.

The Supreme Court on October 9, 2017 had reinstated the ban on sale of firecrackers in Delhi-NCR, saying that there was “direct evidence of deterioration of air quality at alarming levels” every year during Diwali on account of bursting of firecrackers. A three-judge bench, headed by Justice A K Sikri, upheld the November 11, 2016 Supreme Court order, suspending all licenses that “permit sale of fireworks wholesale and retail within the territory of NCR”.

The court said that last year’s order was made after Diwali, and hence there has been no chance of testing its effect on air quality so far. The bench, which also included Justice Abhay Manohar Sapre and Justice Ashok Bhushan, said, “We are of the view that the order suspending the licenses should be given one chance to test itself in order to find out as to whether there would be positive effect of this suspension, particularly during Diwali period”.

It does not require any study to ascertain the effect of firecrackers on air pollution. It is bound to go up during these two days. It also goes up during X’mas. It also goes up when political parties light firecrackers on their candidates winning elections. But SC has banned firecrackers only during Dipavali period.

In this context, it is important to go through the “Air Pollution in Delhi – An Analysis” done by ENVIS Centre CPCB, Central Pollution Control Board in 2016. The conclusion drawn by CPCB is as follows:

“Based on the above observations, it can be said that the air of Delhi is polluted esp. in terms of particulates. According to a study, vehicular pollution alone contributes about 72% of the total air pollution load in Delhi as estimated using emission factor and activity-based approach recommended by IPCC. However, present study finds that it is not only the vehicular pollution, rather, domestic pollution, industrial emission, road dust, and garbage burning also have a large share in Delhi’s total pollution load. Furthermore, construction of infrastructure including large residential complexes potentially contributes to the Delhi’s air pollution load.

Study also finds that the concentration of SO2 is well under control. This is due to phasing out of diesel driven buses, reduction of sulphur content in diesel by about 90%, and implication of Bharat Stage IV norms in vehicles of Delhi. The major cause of rising NO2 concentration in Delhi is increased traffic load. In atmosphere, the combination of nitric oxide (NO), ozone (O3), and hydrocarbons leads to the formation of NO2. Therefore to minimize the NO2 pollution, all the three components involved in its formation needs to be targeted. To substantiate the findings, trend of increasing vehicular usage is shown in figure 5. Since 2005–06 to 2014–15, 82.75% increase can be noted in the number of registered vehicles in Delhi. Moreover, the excessive usage of cars and motor cycles are the pertinent causes for rising vehicular pollution load. This corroborates the cause of increasing NO2 as well as particulate matter concentration. Particulate matter (PM10 and PM2.5) emanates especially from the vehicular exhausts; particularly diesel vehicles, road dust, and industrial activities such as combustion processes, construction activities etc.

Tremendous growth of industrial sector is also responsible for pollution. As per the report of Economic Survey of Delhi 2014-15, there are 8.93 lakhs total industrial establishments operating in Delhi according to 6th Economic Census 2013, which is 18.35% more than the number of establishments according to 5th Economic Census 2005. In many of the industries, installed air pollution control devices are found in idle conditions which lead to the emission of pollutants directly into the atmosphere without any filtration. Further, construction of short chimneys also restricts the polluting gases to escape into the upper layers of the atmosphere.

Traffic congestion on the roads, although underestimated, is another very important factor as far as air pollution is concerned. As it is evident from figure 5, cars and jeeps are responsible for a major share of Delhi’s vehicular load, their congestion on the roads create nuisance. Moreover, 4-wheelers also need a lot of space for parking. This further reduces the space on the roads leading to high frequency of traffic jams. To reduce the pollution at traffic intersection points, time clocks have been installed at most of the points in the city. But it has been observed that hardly any vehicle owner switches off the engine during that period. Thus fuel is continuously burned at a fixed place which further adds up in the atmospheric pollution load.

Meteorological issues:

Apart from the vehicular and industrial emissions, local climatic and seasonal factors also affect the air quality of Delhi. Delhi, being a land-locked territory, is unable to dilute its emission using the moderating effects of sea; the opportunity availed by other metropolitan cities, such as Mumbai, Kolkata, and Chennai. Surrounded by the regions of varied climate, Delhi also represents a great variability in the seasonal patterns. At its west, there is Great Indian Desert (Thar Desert) of Rajasthan while in the north and east direction there are cool hilly regions. At its south, there are central hot plains. Thus, Delhi is located in the subtropical belt with extremely scorching summers, moderate rainfall, and chilling winters.

The winters are extremely important in Delhi as it is dominated by cold, dry air, and ground based inversion with low wind conditions, which are responsible for increasing concentration of pollutants. High concentration of pollutants is trapped close to earth’s surface because a layer of warm air acts as a lid on top of this layer. Moreover, dense smog formation during winter months has also been witnessed in Delhi, the reason of which is vehicular pollution as well as the prevailing meteorological conditions in the months of December and January. Similarly, wind pattern also affects the weather conditions. According to a study, during the autumn and winter months, approximately 500 million tons of crop residues are burnt in Indo- Gangetic plains. The image in figure 6(a) shows the biomass burning in the state of Punjab. The wind blows from India’s north and north-west to the east direction during winters as depicted from the wind-rose diagram of Delhi (Figure 6b). This ultimately results in combination of pollution and fog, leading to heavy smog formation in Delhi esp. during winters. In summers, although there is no inversion phenomenon, still the air quality gets deteriorated because of the increased concentration of PM10, which is due to dust. However, it becomes toxic due to the coating of polluted emissions from various sources. Nevertheless, during rainy season pollution level goes down due to dust suspension. Thus, air pollution in Delhi is a trans-boundary and climate induced phenomenon.”

The image of crop burning in Punjab and its severity is shown in the photo captured by NASA. The red colour depicts fires lighted by the farmers in Punjab.

This conclusion clearly reveals that air pollution in Delhi is for variety of reasons that virtually contribute 99.999%. The firecrackers during Dipavali might be contributing 0.001%. This report seems to have not been brought to the notice of the bench that passed the order banning sale of firecrackers in Delhi during Dipavali.

This year again, Supreme Court passed a diktat covering not only Delhi but the entire India by limiting the bursting of fire crackers to a limited time span of 08.00pm-10.00pm. Ironically, the SC also gave the concession to burst crackers on New Year’s Eve till 00.30 hours.

Needless to say, this diktat was burst first by the people. The diktat was given the respect it deserved – both in 2017 as well as in 2018. In the process, the SC ended up looking like a bunch of below average lawyers occupying the chairs in the edifice called Supreme Court who want to pass some order on some trivial issues as complicated and serious issues like Ram Temple, etc. are too heavy for them to adjudicate.

But banning only fire crackers contributing 0.001% or so to air pollution and ignoring the polluting sources contributing 99.999% to air pollution renders the whole exercise of the Supreme Court in dealing with air pollution clearly polluted – to say the least.

The judgment banning sale of firecrackers for 2 days in Dipavali in 2017 and restricting it for 2 hours in 2018 and observing the effect on air pollution is akin to ordering fasting for 2 days or eating only for 2 hours and observing its effect on chronic obesity! And yes, as the Hindu Festival of Dipavali is over, the whole talk of air pollution has also vanished.

Now the air is clean and it will remain clean, no matter how much crackers would be burst on New Year’s Eve..!! And it will remain clean till Dipavali of 2019..!!