The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has absolved CA. Aman Vikhona of charges of professional misconduct. The complaint, filed by the Deputy Registrar of Companies, alleged that CA. Vikhona was grossly negligent in certifying the SPICe+ Form INC-32 for M/s KSKY Pvt. Ltd. on April 22, 2021, specifically regarding the physical verification of the proposed registered office. The Complainant argued that the company appeared to be a shell entity with a non-existent registered office. However, the Committee found that CA. Vikhona had indeed visited the premises of the proposed registered office prior to incorporation to collect documents, a fact corroborated by a declaration from one of the company’s directors, Mr. Ajit Kumar. Crucially, the Committee acknowledged that a complete lockdown was in effect in Delhi from April 19 to April 26, 2021, due to COVID-19, making a fresh physical visit on the day of certification unfeasible. Considering the prior visit, the existing client relationship with a director, and the COVID-19 restrictions, the Committee concluded that CA. Vikhona had exercised due diligence. Consequently, he was found “Not Guilty” of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, and the case was closed.
DISCIPLINARY COMMITTEE [BENCH — IV (2024-2025)]
Constituted under Section 21B of the Chartered Accountants Act,19491
Findings under Rule 18(17) and Order under Rule 19(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
File No: [PR/G/279/2022/DD/171/2022/DC/1781/2023]
In the matter of:
Shri Mangal Ram Meena
..Complainant
Versus
CA. Aman Vikhona
…Respondent
MEMBERS PRESENT:
CA. Ranjeet Kumar Agarwal, Presiding Officer (in person)
Shri Jiwesh Nandan, I.A.S (Retd.), Govt. Nominee (in person)
CA: Mangesh-P. Kinare Member (through VC)
DATE OF FINAL HEARING : 18th June 2024
PARTIES PRESENT:
Complainant : Mr. Gaurav, Dy. ROC — Authorized Representative of the Complainant (through VC)
Respondent : CA. Aman Vikhona (in person)
Counsel for Respondent : Advocate Amit Kaushik (in person)
1. Background of the Case:
1.1 As per the Complainant Department, certain information had come to the knowledge of Central Government that Foreign Nationals/ individuals/ entities with the help and support of professional were involved in formation of Companies wherein dummy persons were engaged as subscribers to MOA & Directors by furnishing forged documents with falsified addresses / signatures, Director Identification Number (DIN) to MCA.
1.2. It is stated that some companies/individuals/entities who were directly or indirectly connected with the above Coin Pany were found to be engaged in illegal/ suspicious activities, money laundering, tax evasion and non-compliance of various provisions of laws.
1,3. The Complainant Department stated that certain professionals in connivance with such individuals/directors/subscriber to MOA have assisted in incorporation and running of these Companies for illegal/suspicious activities in violation of various laws by certifying e-forms/various reports etc. on MCA portal with false information concealing the real identities of such individuals!
1,4. It was further stated that professionals are duty bound to discharge their duties as per law and certify / verify documents / e-forms or give certificate / Report after due diligence so that compliance to the Provisions of law shall be ensured. However, they had failed to discharge their duties and wilfully connived with directors / company / shareholders / individuals in certifying e-forms knowingly with false information / documents / false declaration / omitting material facts or information in said Company.
1.5. In the instant case, the Respondent had certified Spice+ ‘Form INC-32′ in respect of `M/s KSKY Pvt. Ltd.’ on 22nd April 2021.
2. Charges in brief:
2.1 It was stated by the Complainant that registered office -of .the -Company was verified by-the Complainant Department and not found on address, even no board was found at the address which showed that the Company was not maintaining its registered office and also not maintaining its books of accounts as per the requirements of laws. Thus, as stated the Company appeared to be a shell company incorporated by directors and certifying professional with mala-fide intention.
3. The relevant issues discussed in the Prima Facie Opinion dated 02nd November 2022 formulated by the Director (Discipline) in the matter, in brief, are given below:
3.1. The Company was incorporated on 23-04-2021 at the registered address “H.No.20, G.F., Gall No.9 Sainik EnclaVe, Mohan Garden, !Alain Nagar, Delhi’ and the Respondent had certified SPICE+ form dated 22-04-2021. The role of Respondent in the Company was noted to have been upto its incorporation only and not thereafter.
3.2. The Respondent in SPICe+ form declared that he had personally visited the premises of the proposed registered office given in such form and he verified that the said proposed registered office of the company would be functioning for the business purposes of the company.
3.3. The Respondent mentioned that all the necessary signed documents relating to incorporation were given to him by the Directors and he uploaded them on MCA portal. He further stated that “Mr. Ajit Kumar was my client before incorporating KSKY Private Limited and I had once visited his houSe to collect the documents.”
3.4. It was noted that the Respondent though once visited the house of Mr. Ajit Kumar (Director) before incorporation of the Company however, the purpose of such visit did not appear to be the verification of the premise of its functioning for business purpose.
3.5. The Respondent based on the documents submitted by the Directors of the Company certified the incorporation form of the Company and did not perform his duty of physical verification vire proposed registered office address diligently before giving a declaration in the incorporation form.
3.6. Accordingly, the Director (Discipline) in his Prima Facie Opinion dated 02′ November 2022 opined that the Respondent was prima facie Guilty of Professional Misconduct falling within the meaning of Item (7) of Part I of Second Schedule to the Chartered Accountants Act, 1949. The said item of the Schedule to the Act, states as under:
Item (7) of Part I of the Second Schedule:
“A Chartered Accountant in practice shall be deemed to be guilty of professional misconduct if he:
x x x x x x x
(7) does not exercise due diligence or is grossly negligent in the conduct of his professional duties”.
3.7 The Prima Facie Opinion formed by the Director (Discipline) was considered by the Disciplinary Committee in its meeting held on 09th June 2023. The Committee on consideration of the same, concurred with the reasons given against the charges and thus, agreed with the Prima Facie Opinion of the Director (Discipline) that the Respondent is GUILTY of Professional Misconduct falling within meaning of Item (7) of Part I of Second Schedule to the Chartered Accountants Act, 1949 and accordingly, decided to proceed further under Chapter V of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.
Dates of Written Submissions/ Pleadings by the Parties:
The relevant s of the filing of documents in the instant case by the parties are given below –
| S. No. | Particulars | Dated |
| 1. | Date of Complaint in Form ‘I’ filed by the Complainant | 10th March 2022 |
| 2. | Date of Written Statement filed by the Respondent | 21st July 2022 |
| 3. | Date of Rejoinder filed by the Complainant | 16th August 2022 |
| 4. | Date o Prima Facie Opinion formed by Director (Discipline) | 02nd November 2022 |
| 5. | Written Submissions filed by the Respondent after PFO | 31st July 2023 |
| 6. | Written Submissions filed by the Complainant after PFO | 11th June 2024 |
5. Written submissions filed by the Respondent: –
5.1. The Respondent vide letter dated 31st July 2023, inter-alia, made the submissions which are given as under: –
(i) Mr. Ajit Kumar and Mr. Lakshay Dhawan, Directors of the Company, gave their consent to the Respondent for incorporating the Company and provided all the necessary signed documents, like DIR-2 (Consent), NOC, Electricity Bill, etc.
(ii) He knew Mr. Ajit Kumar before the incorporation of the Company, and he was informed that the registered address of the Company would be the residential address of Mr. Ajit Kumar.
(iii) The Director (Discpline)/ the Complainant has accepted that no document filed or verified by the Respondent was forged.
(iv) It was also accept d that the registered address was proposed on the property, which duly existed, and its owner was aware of the fact that his son would carry out some e-commerce activity from such premises.
(v) It was never alleged that the person who issued the NOC for allowing such registration did not exist or that the same was forged.
(vi) He duly and admittedly visited the said property to receive the documents and consequently verified the existence of the property.
(vii) He had given the following declaration in SPICE+ form: –
1 further declare t/at I have personally visited the premises of the proposed registered office given in the form the address mentioned herein above and verified that the said proposed registered office of the company will be functioning for the business purposes of the company (wherever applicable in respect of the proposed registered office has been given).
(viii) The declaration made by him was not found to be false.
(ix) He is unaware of any specific method prescribed for verification of the proposed registered address. He duly visited the place, was aware of its owners, and has never filed any documents or made a declaration that has been found to be false or incorrect.
(x) The Respondent also bring on record the declaration by Mr. Ajit Kumar as his witness for physical verification of the premises along with a photograph of the premises.
(xi) He prayed to the Committee for leniency in the matter.
6. Written Submissions filed by authorized representative of the Complainant: –
6.1. The authorized representative of the Complainant, on the direction of the Committee, vide entail dated 1111h June 2024, submitted his written submissions, which, inter-alia, are given as under: –
(i) The Company is Active as of today.
(ii) Regarding the details of action taken (if any) against the directors or promoters of the company, he stated that an inquiry into the affairs of the subject company was carried out by this office, and a report in this regard has also been submitted to the Central Government. The same will be shared only after receiving sanction from the central government.
(iii) The Inspection) was conducted by Complainant department on 31St January 2022 and Complete address at which the inspection was conducted is H. No. 20, Ground Floor, Gali No. 9, Sainik Enclave, Mohan Garden, Uttam Nagar, West Delhi, Delhi-110059.
(iv) The registered office of the Company has not changed since its incorporation.
7. Brief facts of the Proceedings:
7.1. Details of the hearing(s) fixed and held/ adjourned in the said matter are given as under —
| Particulars | Date of Meeting(s) | Status |
| 1st hearing | 18th August 2023 | Part heard and adjourned |
| 2nd Hearing | 28th May 2024 | Part heard and adjourned |
| 3rd Hearing | 18th June 2024 | Hearing Concluded and Decision taken |
7.2. On the day of first hearing on 18th August 2023, the Committee noted that the Respondent along with Counse were present in person before the Committee and appeared before it. The office apprised the Committee that the Complainant was not present and notice of listing of the case has been served upon him.
7.3. Being first hearing of the case, the Respondent was put on oath. Thereafter, the Committee enquired from the Respondent as to whether he was aware of the charges and then charges against the Respondent were read out. On the same the Respondent replied that he was aware of the charges and pleaded Not Guilty’ to the charges levelled against him. In the absence of the Complainant and in view of Rule 18(9) of the Chartered Accountants (Procedure of Imiestigation of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee adjourned the case to a later date.
7.4. On the day of hearing on 28th May 2024, the Committee noted that the authorized representative of the Complainant and the Respondent along with Counsel were present and appeared before it. The Committee noted that the Respondent was put on oath on 18.08.2023. Thereafter, the Committee asked the Counsel for the Respondent to make submissions. The Counsel submitte that the Respondent has certified the incorporation documents of the Company and thereafter he was never associated with the Company. Moreover, an inspection was carried out after 11 months of incorporation of the Company by the Complainant.
7.5. Further, the authorized representative of the Complainant stated that he had already submitted all the documents related to this case and has nothing further to add in this case.
7.6. Thereafter, the Committee directed the authorized representative of the Complainant to submit the detail following details /information along–with–relevant–supporting–documents:
(i) Present status of the Company.
(ii) Details of action taken (if any) against Director/Promoters of the Company.
(iii) Date of inspection of the registered office address of the company undertaken by the Complainant Department giving the complete address at which such inspection was undertake.
(iv) Whether the registered office address of the company was changed subsequent thereto.
7.7. The Committee further directed the authorized representative of the Complainant to submit the above documents/information within 10 days with a copy to the Respondent. The Committee also directed the Respondent to submit his further submissions along with documents, if any, within 10 days with a copy to the Complainant. The case was part heard and adjourned.
7,8. The Committee noted that the authorized representative of the Complainant, on its direction, vide email dated 11th June 2024, submitted his written submissions, which, are given in Para 6 above.
7.9. On the day o representative Counsel werefinal hearing on 18th June 2024, the Committee noted that the authorized of the Complainant was present through VC and the Respondent along with present in person and appeared before it. The Committee also noted that the Respondent h filed Written Statement dated 31st July 2023.
7.10. Thereafter, the Committee asked the Counsel for the Respondent to make submissions. The Committee noted the submissions of the Counsel for the Respondent which, inter alia, are given as under
(i) No objection on certificate from owner of the property with electricity bill were sufficient documents for Incorporation of Company.
(ii) The Respondent was responsible for certification of incorporation documents of the Company. He Was not responsible, if board containing name of the Company was not affixed at premise of the Company.
(iii) Form INC – 20A was certified by another professional.
(iv) As per Section 12 of the Companies Act, 2013, there should be registered office which shall be capable to receive the post/mail/correspondence of the Company.
(v) The Respondent had visited the residential address of Ajit Kumar, Director of the Company, which happened to be registered office address of the Company.
(vi) In the State of Delhi, there was complete lockdown from 19th April 2021 to 26th April 2021 and due to this reason, he could not visit the office address of the Company on the date of certification i.e. 22nd April 2021, however, he had visited the same before the certification of incorporation documents,
(vii) The Director of the Company, Mr. Ajit Kumar had declared that the Respondent had visited the premise before incorporation of Company for physical verification and had collected the documents.
(viii) As per Order of Delhi Disaster Management Authority dated 19/04/2021 there was curfew on movement of individuals w.e.f. 10.00 P.M. on 19/04/2021 to 05.00 A.M. on 26/04/2021 and therefore he could not visit the premises when Form SPICE+ was certified on 22/04/2021.
(ix) Hon’ble Supreme Court of India in its Order dated 17.12.1993, in case of John D’Souza -visa Edward Ani had decided that burden to prove the charges was on the charging party.
7.11, Thereafter, the Committee asked the authorized representative of the Complainant Department to make submissions. The authorized representative of the Complainant submitted that he lad already provided all the documents related to this case and has nothing more to submit in his case and Committee may decide the matter accordingly.
7.12. The Committee, after considering the arguments of the Respondent and based on the documents and information available on record, concluded the hearing in the captioned case and took the decisions on the conduct of the Respondent.
8. Findings of the Committee: –
8.1. The charge againt the Respondent in which he had been held prima facie guilty as per the Prima Facie Opine n is that he did not perform his duty of physical verification of the proposed registered office a dress diligently before giving a declaration in the Incorporation Form. The details of the allegation are given in para 2.1 above. As regards the charge, the Committee observed that the Respondent had certified ‘Spice+ Form INC-32′ regarding `M/s KSKY Pvt. Ltd.’ on 22nd April 2021.
8.2. On perusal of the that the Company Spice+ Form INC-32′ certified by the Respondent, the Committee noted was incorporated with registered office being ‘House no.-20, Ground Floor, Gali No. 09, Sainik Enclave, Mohan Garden, Uttam Nagar, Delhi-110059’. Further, under “Declaration and certification by professional” in Spice+ Form INC-32, a declaration in relation to a personal vi it to the premises of the proposed registered office was given by the :
Respondent, which is reproduced as under: –
“I further decide that 1 have personally visited the premises of the proposed registered office given in said propose the form at the address mentioned herein above and verified that the registered office of the company will be functioning for the business purposes of the company (wherever applicable in respect of the proposed registered office has been given).”
8.3. The Committee noted the submissions of the Respondent that Mr. Ajit Kumar (Proposed Director of the Company), was the client of the Respondent before the Company was incorporated, ancilla the Respondent was informed that the registered address of the Company would be the residential address of Mr. Ajit Kumar and therefore, he visited the premises of the Company prior to incorporation of the Company for physical verification and collecting documents.
8.4. The Respondent also brought on record the statement of Mr. Ajit Kumar, Director of the Company, as his witness for physical verification wherein it was mentioned that “Mr. Aman Vikhona S/o Mr. Yogesh Kumar visited my premises i.e H. No. 20, Ground Floor, Gali No. 9, Sainik Enclave, Mohan Garden, Uttam Nagar, New Delhi – 110059 (owned by my father Mr. Banka Kumar Prajapati) before company incorporation for physical verification and to collect documents.”
8.5. The Committee further noted the details of order ‘F.2/07/2020/pt file-III/381’ dated 19.04.2021 of Delhi Disaster Management Authority, through which curfew was imposed on movements of individuals in the territory of NCT of Delhi with effect from 10:00 pm on 19.04.2021 (Monday) to 5:00 am on 26.04.2021 (Monday).
8.6. The Committee further noted the assertion of the Respondent that he had personally visited the premises of the registered office of the company earlier and had also collected the relevant incorporation documents from the Director of the company; however, he could not again visit the ;1said premises on the date of certification due to the curfew imposed by Delhi Disaster Management Authority for movement of personnel on account of COVID pandemic. The Committ7, considering the order of Delhi Disaster Management Authority, observed that the physical verification of the proposed registered office at the time of certifying the Form i.e., Spice+ Form INC-32 was not feasible for the Respondent due to curfew imposed by the authority.
8.7. The Committee further noted the submission of the Respondent that the company is active as on date.
8.8:Having regard the fact that the proposed– Director of–the–Company was already known to and also a client of the Respondent as also the fact of visit of the Respondent to the premises of registered office prior to incorporation for verification and collection of documents having been confirmed by the Director of the Company, the Committee accepted the submissions of the Respondent to this effect.
8.9. The Committee observed that the Respondent had brought on record the copy of DIR- 2 (Consent to act as a Director of a Company), NOC, Electricity bill, etc. attached with the Spice+ Form INC-32, which shows that the Respondent had discharged his professional duties with due care.
8.10. The Committee was of the view that the Respondent had visited the registered office of the Company prior to certification and was satisfied that the premise, where Company to be coated was verily much in existence. There was COVID restrictions/ complete lockdown on the date of the certification. In view of this, the Committee was of the view that the Respondent had undertaken the visit to the registered office address of the Company earlier for verification. This, considering all the submissions and material on record, the Committee decided to absolve the Respondent of the instant charge. Accordingly, the Respondent was held ‘Not Guilty’ of Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Scheduled to the Chartered Accountants Act 1949.
8.11. While arriving at its Findings, the Committee also observed that in the background of the instant case the Complainant Department informed that the Company was registered with ROC, NCT of De hi & Haryana by engaging dummy persons as subscribers to MOA & Directors by furnishing forged documents with falsified addresses / signatures, Director Identification Number (DIN) to MCA. Further, certain professionals in connivance with such individuals/directors/subscriber to MOA assisted in incorporation and running of these Companies for illegal/suspicious activities in violation of various laws by certifying e-forms/various re4rts etc. on MCA portal with false information concealing the real identities of such individuals. However, no evidence of the involvement of the Respondent to that effect had been brought on record by the Complainant Department. The role of the Respondent was limited to certification of Spice+ ‘Form INC-32’–which has been examined by the Committee
9. Conclusion:
In view of the findings stated in above paras, vis-a-vis material on record, the Committee gives its charge wise findings as under:
| Charges (as per PFO) |
Findings | Decision of the Committee |
| Para 2,1 as above |
Para 8.1 to 8.10.as above | NOT GUILTY- Item (7) of Part-I of Second Schedule |
10. In view of the bove observations, considering the oral and written submissions of the Respondent and material on record, the Committee held the Respondent NOT GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part-I of Second Schedule to the Chartered Accountants Act, 1949.
Order
11. Accordingly, in terms of Rule 19(2) of the Chartered Accountants (Procedure of Investigations, of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Committee passes an Order for closure of this case against the Respondent.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(SHRI JIWESH NANDAN, I.A.S. (RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
DATE: 16/10/1024
PLACE: New Delhi
