The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has reprimanded CA. Kapil Kumar Agarwal for professional misconduct. The complaint, filed by the Deputy Registrar of Companies, alleged that Agarwal failed to exercise due diligence while certifying e-Form INC-20A for two companies: M/s. Qwikpayment Technologies Private Limited and M/s. Wenexa Technologies Private Limited. This form requires a declaration that a company’s subscription money has been received. The committee found that at the time of certification, Agarwal had only attached a letter from the subscribers and no documentary evidence, such as bank statements, to prove the funds were actually received by the companies. While Agarwal argued he had properly checked the documents, the committee noted that the audited balance sheets he provided as proof were submitted later, during the disciplinary process, and not with the original forms. Given that he did not provide evidence of receiving the subscription money before certifying the forms, the committee concluded that his professional misconduct was established. As a result, the committee ordered that he be reprimanded.
THE INSUTE OF CHARTERED ACCOUNTANTS OF NDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-IV (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B(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.
[PR/G/29112022/DD/210/2022/DC/1712/2023]
In the matter of:
Mr. Nitin Phartyal
Versus
CA. Kapil Kumar Agarwal
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri Jiwesh Nandan, I.A.S (Retd.), Government Nominee (In person)
3. Ms. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
4. CA. Mangesh P Kinare, Member (Through VC)
5. CA. Abhay Chhajed, Member (In person)
DATE OF HEARING : 20th January 2025
DATE OF ORDER : 04th February 2025
1. That vide Findings dated 16th October 2024 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. Kapil Kumar Agarwalk (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part-I of Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said Findings, an action under Section 216(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 20th January 2025.
3. The Committee noted that on the date of the hearing on 20th January 2025, the Respondent was physically present for the hearing and appeared before it. Thereafter, the Committee asked the Respondent to make submissions on the matter. The Respondent reiterated his written representation dated 11th November 2024 filed by him on the Findings of the Disciplinary Committee, which, inter alia, are given as under:-
(a) The Respondent had checked the documents properly before certifying e-form INC 20A of M/s. Qwikpayment Technologies Private Limited and M/s. Wenexa Technologies Private Limited.
(b) The Respondent had attached the Audited balance sheet(s) for the financial year ended 315t March 2021 of both the Companies as evidence of payment of subscription amount.
(c) There is no default in payment of subscription amount in both Companies.
(d) The Respondent has not done any non-compliance while certifying e-Form(s) INC 20A.
(e) The Respondent requested the Committee to take a lenient view in the matter.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-a-vis written and verbal representation of the Respondent. The Committee noted that the issues/ submissions made by the Respondent as aforestated have been dealt with by it at the time of hearing under Rule 18.
5. Thus, keeping in view the facts and circumstances of the case, material on record including written and verbal representation of the Respondent on the Findings, the Committee noted that with Form(s) INC-20A of M/s Qwikpayment Technologies Private Limited and M/s Wenexa Technologies Private Limited filed on 23rd September 2021 and 12th October 2021, respectively, only declaration letter(s) of subscribers were attached stating that subscription money has been paid by them. The Committee also noted that the audited Balance Sheet(s) of both Companies were provided by the Respondent vide his written representation dated 11th November 2024 submitted on the findings of the Committee and were never produced by him at the stage of hearing under Rule 18 of aforesaid Rules. Moreover, it was evident that no documentary evidence proving that subscription money has been received by the Company before the certification of Form(s) INC-20A was attached with the impugned Forms, which were certified by the Respondent. Thereby, it is apparent that the Respondent has not exercised the required due diligence in certifying Form INC-20A in respect of both subject Companies. The Respondent in his submission has also requested the Committee to take a lenient view in the matter.
6. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 16th October 2024 which is to be read in consonance with the instant Order being passed in the case.
7. Accordingly, the Committee was of the view that the ends of justice would be met if punishment is given to him in commensurate with his Professional Misconduct.
8. Thus, the Committee ordered that the Respondent i.e. CA. Kapil Kumar Agarwal be REPRIMANDED, under Section 21B(3)(a) of the Chartered Accountants Act,1949.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(SHRI JIWESH NANDAN, I.A.S. {RETD.})
GOVERNMENT NOMINEE
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
