The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has reprimanded CA. Shikha Saini for professional misconduct. The complaint was initiated by Ms. Kamna Sharma, Deputy Registrar of Companies, NCT of Delhi and Haryana. The committee’s findings, dated December 4, 2024, determined that CA. Saini was guilty of misconduct. At a hearing on January 20, 2025, she admitted to lapses in certifying incorporation forms for two companies, acknowledging she failed to exercise due diligence. The committee noted that she certified a SPICe+ Form INC-32 for “M/s State Elephant Fintech Private Limited” where the Director’s consent form (DIR-2) was not signed. She also certified a form for “M/s Empire Cornerstone Finance Private limited” without the required rent/lease agreement, a violation of Rule 25 of the Companies (Incorporation) Rules, 2014. Despite her argument that no financial loss occurred and that a lack of “ill motive” should mitigate her punishment, the committee concluded that her negligence constituted professional misconduct. Consequently, she was reprimanded under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
THE INSTITUTE 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 216(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/6/264/22-DD/161/2022/DC/1783/2023
Clubbed Files: PR/G/265/2022 & PR/G/307/2022]
In the matter of:
Ms. Kamna Sharma
Deputy ROC,
Versus
CA. Shikha Saini
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 : 08th February 2025
1. That vide Findings dated 04.12.2024 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. Shikha Saini (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 21B(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to her 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 present through video conferencing. Thereafter, the Committee asked the Respondent to make submissions in the matter. During the hearing, the Respondent stated that she had already submitted his written representation dated 21st December 2024 on the Findings of the Committee. She made oral submissions and admitted her mistake that that there were lapses in incorporation Forms of the Companies certified by her. She further submitted that no loss has been incurred to any individual or exchequer, and the Company involved in the instant matter has no business and also applied for a strike-off of its name from the record of Registrar of Companies. She requested the Committee to take a lenient view in the matter. The Committee also noted the written representation of the Respondent dated 21st December 2024 on the Findings of the Committee, which, inter alia, are given as under:-
(a) There were no fraudulent and sham transactions in involved Companies.
(b) The Respondent placed her reliance upon the Order dated 09th November 2006 in the matter of “Institute of Chartered Accountants of India Vs. Somnath Basu”. As per the said Order, the Hon’ble High Court of Calcutta observed that even if there is any negligence in the performance of duties or errors of judgments in discharging such duties, the same cannot constitute misconduct unless there is an ill motive
4. The Committee considered the reasoning as contained in the Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-à-vis written and verbal representation of the Respondent.
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 Form DIR-2 related to consent to act as Director of the Company, which had been filed along with Spice+ Form INC-32 of ‘M/s State Elephant Fintech Private Limited’ certified by the Respondent, was not signed by the Director. The Committee observed that in Form DIR-2, the consent to act as a director of the Company is to be taken along with other declaration as required under the law, but in this case, this was not there, and the Respondent had certified incorporation Form of the Company without exercising due diligence. Further, the Committee noted that the Respondent had certified SPICe+ Form INC-32 of ‘M/s. Empire Cornerstone Finance Private limited’ and required document(s); viz. rent/lease agreement was not attached along with the said Form at the time of certification of SPICe+ Form INC-32, which was a violation of Rule 25 of the Companies (Incorporation) Rules 2014.
6. Hence, the Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 04.12.2024 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 her in commensurate with her Professional Misconduct.
8. Thus, the Committee ordered that the Respondent i.e. CA. Shikha Saini ,be REPRIMANDED, under Section 21B(3)(a) of the Chartered Accountants Act I gag.
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. MANGESB P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED
MEMBER
