The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee found CA. Sachin Vikramrao Ghayal guilty of professional misconduct. The charges stemmed from his engagement in full-time coaching activities without ICAI’s specific permission and holding a directorship in M/s Sachin Ghayal Sugar Pvt Ltd while in full-time practice, contrary to regulations. Despite multiple attempts to communicate and provide an opportunity for a hearing, including sending notices to his registered address, email, and a company’s registered address where he held a directorship, Mr. Ghayal did not appear or offer a defence. The Committee noted his membership status was ‘inactive,’ and fees were paid only until 2017, with a pending ‘KYM’ form. Based on the available evidence and his failure to respond or provide submissions, the Committee concluded that his defence regarding being a ‘director simplicitor’ was not acceptable given his over 99% shareholding in the company. Consequently, the Committee ordered that CA. Sachin Vikramrao Ghayal be reprimanded under Section 21B (3) (a) of the Chartered Accountants Act, 1949.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR-89/2018-DD/103/2018/DC/132312020
[DISCIPLINARY COMMITTEE [BENCH-II (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 2113 (3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007
In the matter of:
Mr. Sunil Laxman Porje…. Complainant
Versus
CA. Sachin Vikramrao Ghayal….. Respondent
Members Present:-
CA Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, IRS (Retd.), Government Nominee) (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (through VC)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (in person)
Date of Hearing : 28th March, 2024
Date of Order : 17th May, 2024
1. That vide Findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee was, inter-alia, of the opinion that CA. Sachin Vikramrao Ghayal (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (11) of Part I of the First schedule and Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 21B (3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting opportunity of being heard in person / through video conferencing and to make representation before the Committee on 28th March 2024.
3. The Committee noted that neither the Respondent was present before it nor was there any intimation as regard his non-appearance. The Committee also noted that the case was earlier fixed on 19th March 2024 wherein the copy of the Findings sent at the address available in the member records of ICAI had been received back undelivered with the comments ‘no such person’. The Committee also noted that the soft copy of the Findings of the Disciplinary Committee and the Notice for the hearing had also been sent to the email address available in the member records of CAI. As per email delivery intimation for the communication of the date of hearing, the delivery of the said email had been complete.
3.1 The Committee also noted from the member records of ICAI as under:
(a) ‘KYM’ Form of the Respondent had been submitted and the same was pending with the comment ‘not filled’.
(b) The membership status of the Respondent is ‘inactive’ and the membership Fees has been paid till 2017.
3.2 The Committee also noted that as per the case records, the Respondent was a director in a private Company. Thus, the Ministry of Corporate Affairs records in respect of the directorship held by the Respondent were perused and notice for hearing at the Aurangabad address where the companies in which he held directorship were registered, was sent through speed post which was duly delivered to him as per the delivery report on record.
3.3 Thus, the Committee was of the view that all possible efforts have been made to ensure the delivery of the communication for hearing upon the Respondent but he chose not to represent before the Committee. Keeping in view the provisions of Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee presumed that he has nothing more to represent before it and thus, decided to consider his case for award of punishment on the basis of material available on record.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct.
5. Keeping in view the facts as well as circumstances of the case and material on record, the Committee noted that the Respondent failed to give his submissions on the adherence of Regulation 190A of Chartered Accountant Regulations, 1988 despite the same being specifically called for. Looking into apparent violation of Chartered Accountants Regulations, 1988 the Committee held that the Respondent is Guilty of Professional Misconduct falling within the meaning of Item (1) of Part II of the Second Schedule to the Chartered Accountants Act, 1949.
5.1 Further, the Respondent despite being in full time practice was also director in M/s Sachin Ghayal Sugar Pvt. Ltd. The Respondent, after receipt of the complaint, vide e-Form DIR 12 submitted on 6th November 2018 appointed his wife as director of the Company w.e.f. 25th March 2018. He resigned from the Company as director w.e.f. 31st March, 2018.However the e-Form in this regard was filed on MCA portal on 2151 November 2018. The e-Form DIR-12 filed on 24th July, 2014 clearly mentioned the appointment of the Respondent as director of the Company whereas the Respondent claimed that he is Director ‘Simplicitor’ in a private limited Company and does not hold any position as working or whole-time director in the said Company.
5.2 As per list of shareholders as on 31st March 2022, uploaded on MCA portal, the Respondent was holding more than 99% shares of the Company. The Committee hence noted that the defence of the Respondent cannot be accepted.
5.3 Hence, professional misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7th February 2024 which is to be read in consonance with the instant Order being passed in the case.
6. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to him in commensurate with his professional misconduct.
7. Thus, the Committee ordered that CA. Sachin Vikramrao Ghayal be Reprimanded under Section 21B (3) (a) of the Chartered Accountants Act 1949.
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(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
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(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
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(CA. SANJAY KUMAR AGNRW
MEMBER
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(CA. COTHA S SRINIVAS)
MEMBER
CONFIDENTIAL
DISCIPLINARY COMMITTEE [BENCH — II (2023-2024)1
‘Constituted under Section 21B of the Chartered Accountants Act, 19491
Findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
File No.: (PR-89/2018-DD/103/20181DC/1323120201
In the matter of:
Mr. Sunil Laxman Porje,
Versus
…. Complainant
CA. Sachin Vikramrao Ghayal
…..Respondent
MEMBERS PRESENT: (In person}
CA. Ranjeet Kumar Agarwal, Presiding Officer (Present through Video Conferencing Mode)
Smt. Rani Nair, I.R.S. (Retd.), Government Nominee (In person)
Shri. Arun Kumar, I.R.S. (Retd.), Government Nominee (Present through Video Conferencing Mode)
CA. Sanjay Kumar Agarwal, Member (In person)
DATE OF FINAL HEARING: 23.06.2023 (through physical/video conferencing mode)
PARTIES PRESENT :
COMPLAINANT: Not Present
RESPONDENT: Not Present
PR-89/2018-DDI103/2018/DC/1323/2020
BACKGROUND OF THE CASE: –
1. The brief background of the case is that
a. the Complainant has filed Form-I dated 20th March 2018 against the Respondent who, despite being in full time practice, was also engaged in other business.
b. After receipt of the complaint the Respondent, vide e-form DIR 12 submitted on 6th November 2018 had appointed his wife as director of the Company w.e.f. 25th March 2018. The Committee further noted that the Respondent resigned from the Company as director w.e.f. 31st March 2018, however the e-form in this regard was filed on MCA on 21st November 2018.
CHARGES IN BRIEF: –
2. The Committee noted that charges levelled against the Respondent are as under –
a) The Respondent despite being in practice is running CA classes in the name of Sachin Ghayal Professional Academy.
b) The Respondent, despite being in full time practice is also director in M/s Sachin Ghayal Sugar Pvt Ltd.
3. The Committee noted that the Respondent in his reply at the stage of PFO had, inter-alia, mentioned as under:
a. The Respondent in his defence stated that he had not done any attest function as Chartered Accountant. He was taking coaching classes for the CA students since 2010. He further stated that communication from the President, ICAI dated 28th January; 2010 had advised the members that coaching classes should not be conducted between 09.30am to 05.30pm. The said advisory by the President specifically issued for members and the word “members” was not preceded by the word practicing or non-practicing. Therefore, he had presumed that coaching classes can be conducted by practicing members also. For the coaching classes, no advertisements etc. were issued by him in any newspaper.
(it He further submitted that he is Director simplicitor in a private limited company and he does not hold any position as working or whole-time director in the said company. He further stated that holding of directorship simplicitor is permissible to practicing Chartered Accountant.
4. The Director (Discipline) in his Prima Facie Opinion dated 20th April, 2020, with respect to the first Allegation noticed that per Appendix (9) of Chartered Accountants Regulations, 1988, a member in full time practice is required to seek specific permission for “part-time or full-time lectureship for courses other than those relating to the Institute’s examination conducted under the auspices of the Institute or the Regional Councils or their branches”. Further such engagement as lecturer in an University, affiliated college, education institution, coaching organization, private tutorship, the direct teaching hours devoted to such activities taken together should not exceed 25 hours a week. It is noted that the Respondent failed to provide a copy of specific permission obtained from the Institute in this regard. It is noted that the Respondent was holding full time COP and was also engaged in full time coaching activities without specific approval of ICAI as required. Therefore, he is held prima facie guilty of Professional Misconduct falling within the meaning of Item (1) of Part II of the Second schedule to the Chartered Accountants Act, 1949.
5. With regard to the second allegation, the Director (Discipline) opined that the Respondent was specifically asked to produce a copy of financial statement of M/s Sachin Ghayal Sugar Pvt Ltd along with the Director’s Report to prove that he is director simplicitor in the Company under terms of Rule 8(5). However, the letter was returned undelivered with postal remarks “Not Claimed”. Hence in absence of any evidence from the Respondent to establish that he was merely a director simplicitor, he is held prima facie guilty of Professional Misconduct falling within the meaning of Item (11) of part I of First schedule to Chartered Accountants Act, 1949.
6. Accordingly, the Director (Discipline) in terms of Rule 9 of the Chartered Accountants (Procedure of Investigations of Professional Misconduct and Other Misconduct of Cases) Rules, 2007, in his prima-facie opinion dated 20$ April 2020 held the Respondent Prima Facie Guilty of Professional Misconduct falling within the meaning of Item (11) of Part I of the first Schedule and Item (1) of Part II of the Second Schedule to the. Chartered Accountants Act, 1949.
