In the Matter of CA. Manoj Kumar Agrawal, Manoj Mohan & Associates, Noida (ICAI Disciplinary Committee)
Tender Restricted to CA Firms Does Not Make the Work Statutorily Exclusive: No Misconduct in Bidding for a Non-Exclusive Assignment
Summary: The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI), in the matter of CA. Manoj Kumar Agrawal of M/s. Manoj Mohan & Associates, Noida, DC/2155/2025, held the respondent not guilty of professional misconduct arising from participation in a financial audit tender issued by the Northern Regional Power Committee (NRPC), Ministry of Power. The decision was taken on 7 July 2026 and pronounced on 29 September 2026. ICAI’s Tender Monitoring Directorate had noticed that certain Chartered Accountant firms quoted fees lower than the estimated tender value and referred the matter for disciplinary examination. The tender dated 9 June 2023 specified an estimated value of ₹44,000, against which the respondent firm submitted a bid of ₹41,920. The Director (Discipline) initially considered the participation contrary to ICAI’s notification dated 7 April 2016, which restricts responses to tenders involving services exclusively reserved for Chartered Accountants unless a minimum assignment fee is prescribed or the work is open to other professionals.
Background of the Proceedings
The proceedings arose from a tender floated by the Northern Regional Power Committee, Ministry of Power, for financial audit services involving review of financial statements, the financial reporting framework and the audit report.
ICAI’s Tender Monitoring Directorate noticed that certain participating firms had quoted fees below the estimated bid value. It referred the matter to the Director (Discipline) for investigation against several firms, including M/s. Manoj Mohan & Associates.
The tender, dated 9 June 2023, mentioned an estimated value of ₹44,000. The respondent firm submitted a bid of ₹41,920. No minimum assignment fee was prescribed.
The Director (Discipline) formed a prima facie opinion that participation violated ICAI’s Tender Guidelines. However, after examining the governing provisions and the nature of the assignment, the Disciplinary Committee held the respondent not guilty and closed the case.
Restriction Under ICAI’s Tender Guidelines
The Committee examined ICAI’s notification dated 7 April 2016, which restricts members in practice from responding to tenders in areas of services exclusively reserved for Chartered Accountants.
The notification provides exceptions where the tender itself prescribes a minimum fee or where the area of work is open to other professionals along with Chartered Accountants.
The Committee also referred to the relevant provisions of the Code of Ethics, Volume II, Revised 2020. These identify exclusive areas by reference to services reserved for Chartered Accountants by statute, including specified audit and attestation functions.
Thus, the crucial question was whether the assignment was legally reserved for Chartered Accountants. The description of the tender and its bidder eligibility conditions required examination in that context.
Prima Facie View Against the Respondent
The Director (Discipline) initially treated the tender as concerning services exclusively reserved for Chartered Accountants.
Since the bid document mentioned only an estimated value, rather than a prescribed minimum fee, the Director considered participation impermissible.
The respondent submitted that his quotation was only marginally below the estimate and that the contract had not been awarded to his firm. The prima facie opinion rejected the latter explanation on the basis that, where the restriction applies, the prohibited act is responding to the tender, rather than obtaining or executing the assignment.
During the final hearing, the respondent’s representative also argued that the assignment concerned review of financial statements rather than a reserved audit or attestation function.
The Committee ultimately resolved the case by examining whether the work was exclusive under the governing framework.
NRPC Bye-Laws Established That the Work Was Non-Exclusive
The Committee considered the bye-laws governing the NRPC Fund, which had been placed on record in another disciplinary case concerning the same tender.
Under the provision dealing with verification of accounts, the fund’s accounts were to be audited annually by officers nominated by the NRPC Chairperson or another officer authorised by the Chairperson.
The governing provisions therefore did not reserve the assignment exclusively for Chartered Accountants. Other authorised persons could perform it.
On that basis, the Committee concluded that the area of work was open to other professionals or persons along with Chartered Accountants. Consequently, the restriction applicable to tenders for statutorily exclusive services did not prevent the respondent from participating.
Tender Eligibility and Statutory Exclusivity Are Different
The bid document described the relevant category as CAG-empanelled auditor or CA firm. Nevertheless, the Committee examined the underlying legal framework rather than treating that description as conclusive.
It also referred to the Tender Monitoring Directorate’s FAQs, which distinguish exclusive and non-exclusive areas by reference to statutory reservation.
The relevant FAQ permits a member to respond where the area is not exclusively reserved by statute, even though the tender document invites only Chartered Accountants.
The distinction is significant: an organisation’s decision to invite CA firms does not, by itself, convert an otherwise non-exclusive service into one legally reserved for the profession.
Final Decision
The Committee held that the respondent was entitled to respond to the tender and had not contravened ICAI’s Tender Guidelines.
He was therefore held not guilty under Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949. The proceedings were closed under Rule 19(2).
No reprimand, fine or removal from membership was imposed.
Author’s Comments
The word “audit” in a tender does not, by itself, establish statutory exclusivity. The governing law and the nature of the service must be examined before concluding that participation attracts the tender restriction.
The decision also separates bidder eligibility from legal reservation of work. A procuring organisation may prefer CA firms for an assignment that the governing framework permits other authorised persons to perform.
Equally, the order should not be read as allowing members to quote below a prescribed minimum fee for exclusive assignments. The respondent succeeded because the work was non-exclusive, not because ₹41,920 was close to the ₹44,000 estimate.
An estimated value and a minimum fee also serve different purposes. The former indicates the procuring authority’s estimate; the latter establishes an express fee floor.
For practitioners, the useful lesson is to preserve the provisions supporting the classification of the assignment. The scope of work, governing law and applicable tender exception must be read together before bidding.
FULL TEXT OF THE ORIGINAL ICAI DISCIPLINARY COMMITTEE FINDINGS AND ORDER
