An ICAI Disciplinary Committee found CA. Shantaram Tukaram Gaikwad guilty of professional misconduct. The case stemmed from a complaint by the Commissioner for Co-operation & Registrar of Co-operative Societies, Pune. The Committee determined that despite knowing of embezzled bank funds at M/s Shivajirao Bhosale Sahakari Bank Ltd. for FY 2016-17, CA. Gaikwad failed to submit a mandatory Specific Report or Special Report to the Registrar of Co-operative Societies, as required by the Maharashtra Co-operative Societies Act, 1960. While his audit report disclosed irregularities, the Committee concluded his failure to file the specific report prevented the establishment of civil/criminal liability against offenders, leading to the bank’s license cancellation and stakeholder losses. Consequently, CA. Gaikwad was reprimanded and fined Rs. 25,000, payable within 60 days.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR/G/282/19-00/310/2019-DC/1479/2021
[DISCIPLINARY COMMITTEE [BENCH-II (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/282/19-DDI310/2019-DC/1479/2021]
In the matter of:
Shri. Satish Soni,
The Commissioner for Co-operation
& Registrar of Co-operative Societies,
Versus
CA. Shantaram Tukaram Gaikwad
M/s Shantaram Tukaram Gaikwad
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 : 17′ 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. Shantaram Tukaram Gaikwad (hereinafter referred to as the Respondent”) is GUILTY of Professional Misconduct falling within the meaning of Item (7) Part I 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 I through video conferencing and to make representation before the Committee on 28thMarch 2024.
3. The Committee noted that on the date of the hearing held on 28th March 2024, the Respondent was present through video conferencing and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that, in his audit report for the FY 2016-17 in respect of M/s Shivajirao Bhosale Sahakari Bank Ltd. he had stated that the Special Audit report was not required. If the Cooperative Department required the Special Audit Report, the same would have been submitted to the Cooperative Department. Considering the same as well as his age, he requested for a lenient view in his case.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional Misconduct vis-a-vis verbal representation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal representation on the Findings, the Committee is of the view that it has already been held that, despite knowing that funds of the bank were embezzled, the Respondent had issued only his Audit Report and had failed to submit the Specific Report I Special Report along with audit report within time prescribed to the Registrar of Co-operative Societies.
5.1 The Committee on perusal of the Audit Report for the financial year 2016-17 issued by the Respondent in respect of M/s Shivajirao Bhosale Sahakari Bank noted that the Respondent had made disclosure about irregularities in the Bank. As regards issuance of Special Report to the Co-operative Department, as per the Respondent the same was not necessary because the transaction of fraud got regularized. The Committee held that the Respondent as an auditor was duty bound to adhere the requirement given under Maharashtra Co-operative Societies Act, 1960.
5.2 The Committee concluded that the Respondent had only reported the alleged transaction in his Audit Report and had not issued the Specific Report which as per Section 146 read with Section 81(5)(b) of Maharashtra Co-operative Societies Act, 1960 was required to be furnished under Section 85(1)(e) of the Maharashtra Co-operative Societies Act, 1960 (MCS Act) with respect to fraud to the Registrar of Co-operative Societies. Due to the failure of the Respondent in submitting the Specific Report, the civil / criminal liability against the offenders was not established by the Registrar of Co-operative Societies. Being a professional, the Respondent failed to exercise professional skepticism, which resulted in cancellation of license of the bank and financial loss to the stakeholders.
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. Shantaram Tukaram Gaikwad, be Reprimanded and also a Fine of Rs. 25,000/- (Rupees Twenty Five Thousand only) be imposed upon him payable within a period of 60 days from the date of receipt of the Order.
Sd/-
(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
Sd/-
(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
Sd/-
(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
Sd/-
(CA. SANJAY KUMAR AGARWAL)
MEMBER
Sd/-
(CA. COTHA S SRINIVAS)
MEMBER
