The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee has ordered the removal of CA Praveen Murarka from the register of members for three months and imposed a fine of ₹50,000 for professional and other misconduct. The decision was based on a finding that Murarka was negligent in his professional duties across three separate cases. In one instance, he certified documents with incomplete and unnotarized information, including a rent agreement that was not signed or witnessed. In another case, he accepted a rent agreement that was not registered, a violation of the Registration Act, 1908, and failed to verify a foreign director’s VISA. The committee also found that he had made changes to a document’s date to avoid a mandatory filing requirement. In a third case, he signed documents with an incorrect name and failed to report discrepancies in a company’s financial statements and business activities. Despite being given multiple opportunities to appear before the committee and make a representation, Murarka failed to do so. The committee concluded that his actions demonstrated a casual approach and a failure to exercise due diligence, which is not expected of a chartered accountant.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(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/47/22/DD/355/2022/DC/1698/2022]
In the matter of:
Ms. Seema Rath
Versus
CA. Praveen Murarka
MEMBERS PRESENT:
1. CA. Ranjeet Kumar Agarwal, Presiding Officer (In person)
2. Shri Jiwesh Nandan, IAS (Retd.), Government Nominee (in person)
3. Ms. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (In person)
4. CA. Mangesh P Kinare, Member (through VC)
5. CA. Abhay Chhajed, Member (through VC)
DATE OF HEARING : 03rd February 2025
DATE OF ORDER : 08th February 2025
1. That vide Findings dated 30/12/2024 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. Praveen Murarka (hereinafter referred to as the Respondent”) is GUILTY of Professional and Other Misconduct falling within the meaning of Item (2) of Part IV of First Schedule and Item (7) of Part I and Item (1) of Part II 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 communication(s) were addressed to him thereby granting opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 20/01/2025 and 03/02/2025.
3. The Committee noted that this case was fixed before it for award of punishment under Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007. The Committee noted that the Respondent vide email dated 19/01/2025 had sought adjournment for the meeting held on 20/01/2025, which was acceded to by it. The Committee, however, provided a final opportunity to the Respondent to appear before it before passing any Order against him. The Committee directed the office to inform the Respondent to appear before it at the time of the next listing and in case of his failure to appear, the matter would be decided ex-parte based upon the documents and material available on record. The Committee further noted that the Respondent had neither filed any written representation on the findings of the Committee in captioned case nor had appeared before it despite the fact that he was specifically informed through notice dated 22/01/2025 to appear in the hearing fixed on 03/02/2025 failing which the matter would be decided ex-parte. Moreover, the Committee observed that this case was fixed six times before it for hearing(s) under Rule 18 of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduat and Conduct of Cases) Rules, 2007, however, the Respondent did not appear before it, and the Committee had decided the matter ex-parte at the stage of Rule 18.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent ‘Guilty of Professional and Other Misconduct. Keeping in view the facts and circumstances of the case and material on record, the Committee noted that as regards charges related to M/s Dethat Trading Private Limited — the Respondent has accepted his mistake with regard to omission of essential elements in the rent agreement at Prima Facie Stage. The Committee viewed that the absence of such essential elements in the Rent Agreement should have created doubt in mind of the Respondent on the authenticity of the documents. Further, the rent agreement was not notarised which also raises question on its validity as an authenticated document. As regards the charge related to rent agreement does not include the address of the property which is to be let out and rent agreement was neither signed by parties nor notarized, the Committee viewed that the Respondent was required to be more cautious and vigilant and was expected to insist on complete documents being attached to the said e-Form rather than certifying a Form with attachments containing incomplete information. Further as regards the next charge related to rent agreement does not include the name, address, signature of witness, the Committee observed that the Respondent was required to be more cautious and vigilant and was expected to insist on complete documents being attached to the said e-form rather than certifying a Form with attachments containing incomplete information. However, he failed to do so.
5. As regards charges related to M/s. East Alpha Alliance Technology Private Limited — the Committee observed that rent agreement was not registered, which itself is a violation of Section 17 of the Registration Act, 1908. Any agreement for a period of less than a year can be valid if notarised, but it was not in the extant case as the rent agreement was for 3 years. Hence, the rent agreement cannot be regarded as-a valid document. Further; ownership paper viz. rent agreement, was a mandatory document to be attached with SPICe Form and therefore irregularities if any in respect of essential elements in the rent agreement cannot be ignored. Thereafter, the Committee observed that no copy of VISA of Mr. Jianju Lu was available on record. The Committee was of the view that in case a foreign individual is being appointed as Director on the Company, the Respondent was required to be more careful, and should have exercised due diligence in the matter. Moreover, the Committee opined that it apparent that to avoid the requirement of UDIN number, the date has been changed subsequently by overwriting. The Respondent had also not brought on record any document/evidence to prove that financial statements were signed by him on 30/06/2019.
6. As regards charges related to M/s. Neu Science and Metallurgical Technology Private Limited — the Committee observed that rent agreement was not registered, which itself is a violation of Section 17 of the Registration Act, 1908. Further, rent agreement was not signed by any witness. Hence, the rent agreement cannot be regarded as a valid document. Thereafter, the Committee observed that the name of Respondent as witness has been mentioned by him as “Praveen Sharma” and not as “Praveen Murarka”; though against it, he has mentioned his membership number and used his digital signatures. The Committee observed that such a mistake showed a very casual approach adopted by the Respondent in not even reading the document while witnessing those documents which is certainly not expected from a Chartered Accountant. After this, the Committee noted the plea of the Respondent that rent would have been negotiated subsequently by the Company at lower amount. However, the Committee was of the view that the Respondent could not produce anything in support of his statement. Thus, it showed failure on the part of the Respondent (who was Statutory Auditor of the Company) to exercise due diligence while booking the rent amount in profit and loss account without any supporting evidence for that amount. Moreover, the Committee viewed that the Respondent (who, was Statutory Auditor of the Company) should have reported the facts in his audit report that activities carried out by the Company as its main object are different from the main objects mentioned in MOA of the Company, but the Respondent had failed to report the said facts in his Audit Report. Hence, the Professional and Other Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 30th December 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 and Other Misconduct.
8. Thus, the Committee ordered that the name of the Respondent i.e. CA. Praveen Murarka be removed from the Register of members for a period of 03 (Three) months and also imposed a fine of Rs. 50,000/- (Rupees Fifty thousand only) upon him, which shall be paid within a period of 60 (sixty) days from the date of receipt of the Order. The Committee further directed that this punishment order is independent and shall run consecutive to the punishment awarded to the Respondent in another disciplinary case [i.e. PR/G/27/22/DD/83/2022/DC/1730/20231.
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(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(SHRI JIWESH NANDAN, I.A.S. {RETD.})
GOVERNMENT,NOMINEE
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(MS. DAKSHITA DAS, 1.R.A.S.{RETD.})
GOVERNMENT NOMINEE
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(CA. MANGESH P KINARE)
MEMBER
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(CA. ABHAY CHHAJED)
MEMBER
