M, a Practising Company Secretary has been offered for conducting the Secretarial Audit of TR Ltd. in the current year. Last year, it was done by PL & Associates (PCS firm), a firm of Practising Company Secretary. M

Code of Conduct: Clause (8) of Part I of First Schedule to the Company Secretaries Act, 1980- Provides that a Company Secretary in Practice shall be deemed to be guilty of professional misconduct, if "he accepts the position of a Company Secretary in Practice previously held by another Company Secretary in Practice without first communicating with him in writing." Explanation: It is expressly clarified that the communication mentioned in this clause does not mean that no-objection or consent of the previous incumbent is a prerequisite of accepting the said assignment. In regard to certification of Annual Return under Section 92 of the Companies Act, 2013 and for all exclusive attestation assignments, it is incumbent on the Company Secretary, to ascertain if any other Company Secretary had been appointed previously by the company concerned for certification of Annual Return or for issuance of compliance certificate, as the case may be. The appointee shall take positive steps to ascertain if anyone has been engaged earlier, for the same year, for the certification work. In respect of the following, it shall be mandatory to send a prior written communication to the earlier incumbent: Signing/Certification of Annual Return. Issuance of Secretarial Audit Report in terms of Section 204 of the Companies Act, 2013. Issuance of Certificate of Securities Transfers. Certificate of reconciliation of capital, updating of Register of Members, etc. as per the Securities & Exchange Board of India's Circular D&CC/Cir-16/2002 dated December 31, 2002. Conduct of Internal Audit of Operations of the Depository Participants. Certification of Corporate Governance under SEBI (LODR) Regulation, 2015. Case Analysis: M (PCS) have been held guilty of professional misconduct under this clause for having accepted and commenced the certification of Annual Return of a Company without first communication with the PL & Associates (PCS Firm) earlier incumbent in writing. It has been concluded that mere oral Conversation is not sufficient to comply with the requirements of clause (8) of Part I of First Schedule to the Company Secretaries Act, 1980, but the delivery of the message to the addressee of the same is essential. Oral communication is no communication as far as this clause is concerned. It shall be mandatory to send a prior written communication to the earlier incumbent, for the issuance of Secretarial Audit Report in terms of Section 204 of the Companies Act, 2013. Conclusion: Hence M (PCS) has done Professional Misconduct under Clause (8) part I of first Schedule to the Company Secretaries Act, 1980. PL & Associates (PCS firm) is correct as proper procedure was not followed by M (PCS) If M (PCS) has been appointed for Issuing certificates as contemplated as per SEBI (LODR) Regulations, 2015, then it will not be mandatory, although desirable to send a prior written communication to the earlier incumbent. Hence, in that case there will not be Professional misconduct done by M (PCS).