Maheshwar Hiremath Vs CA Ajit Kothari (ICAI Disciplinary Committee)
ICAI Fines CA ₹3 Lakh for Uncompleted Assignment, Unrefunded Advance and Bounced Cheques
Summary: The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI), Bench-II, in Maheshwar Hiremath Vs CA Ajit Kothari, by its final order dated 15 October 2026, reprimanded CA Ajit Kothari (Membership No. 101832), Surat, and imposed a fine of ₹3,00,000 for professional and other misconduct arising from his failure to complete a professional assignment, refund money received from a client and honour repayment cheques. The order followed findings pronounced on 29 August 2026 in Case No. PR/553/2022-DD/687/2022-DC/1904/2024. The Committee held the respondent guilty under Clause (7) of Part I of the Second Schedule and Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. The fine was directed to be paid within 60 days from receipt of the order. The decision concerned both the respondent’s failure to discharge his contractual and professional obligations and his subsequent conduct in issuing cheques which were dishonoured for insufficient funds.
The complaint was filed by Maheshwar Hiremath, Managing Director of Swati Airport Support Services Private Limited. The respondent’s firm accepted an engagement through a letter dated 8 September 2021 covering two assignments: revival of a cancelled airport-related tender, described in the disciplinary record as the DSITC of PBB bid involving approximately ₹100 crore, and obtaining permissions for opening an Indian rupee account for Shenzhen CIMC-TianDa Airport Support Ltd., China, to receive contractual payments of approximately ₹3.5 crore. The agreed professional fee was ₹1.55 crore, of which ₹15 lakh was payable as an advance. The mandate was to remain valid for 30 working days, and the engagement letter expressly provided that the advance would be returned if the assignment was not completed within the stipulated period. The refund condition was significant because the Committee was not examining merely an unsuccessful professional assignment; it was examining the respondent’s failure to comply with an express contractual obligation after admitting that the work had remained incomplete.
The disciplinary record disclosed payments aggregating ₹34,51,075 received in connection with the engagement. These comprised ₹15 lakh towards professional fees, ₹7.50 lakh stated to be required for opening an ICBC bank account, ₹2,01,075 for administrative expenses associated with regulatory approvals and ₹10 lakh towards the minimum bank deposit. The findings also discussed the original fee invoice of ₹17,70,000, representing ₹15 lakh plus GST, and the corresponding TDS adjustment. Although the initial complaint referred to ₹35,51,075, the Committee’s operative findings and punishment order proceeded on the aggregate of ₹34,51,075. The Committee examined email correspondence, bank transaction details and WhatsApp communications, including acknowledgements of receipt and requests for additional payments. The respondent did not dispute that he had received the money or that the assignment had not been completed.
A central issue was whether the respondent could retain the money after failing to perform the agreed services. The Committee found that the engagement letter expressly contemplated refund upon non-completion within 30 working days. It therefore held that the respondent was required either to complete the assignment in accordance with its terms or to return the amount received when the assignment remained unperformed. His repeated acknowledgements of the outstanding liability reinforced this conclusion. During the proceedings, he expressed willingness to repay by different dates, including 31 August 2025, 15 December 2025 and 30 June 2026. He also referred to a proposed sale of property in Rajasthan to arrange repayment. However, the complainant pointed out that earlier commitments had not been fulfilled, and the Committee recorded that the amount remained unpaid. The failure to honour these commitments was treated as evidence of inadequate professional due diligence and accountability.
The respondent attributed his financial difficulties to illnesses affecting his parents and submitted that these circumstances prevented him from completing the assignment and making repayment. The Committee considered that explanation but rejected it as a justification for retaining client funds. It held that personal financial hardship, even if genuine, could not absolve a Chartered Accountant of obligations undertaken towards a client or justify retention of money received for services that remained unperformed. The Committee emphasised the importance of integrity, diligence and accountability in professional engagements. Its reasoning was that a member’s personal circumstances did not extinguish the contractual refund obligation or the duty to conduct professional affairs in a manner consistent with the ethical standards applicable to chartered accountants.
The second major charge concerned dishonoured repayment cheques. The complainant produced copies of cheques and corresponding bank return intimations. These included a cheque dated 13 February 2022 for ₹34,51,075, another cheque of the same date for ₹1 lakh and a cheque dated 27 June 2022 for ₹24.01 lakh. The Committee recorded that the cheques had been returned unpaid because the respondent’s bank account contained insufficient funds and that he had not disputed issuing them. The complainant also produced a legal notice dated 28 February 2022 referring to action under Section 138 of the Negotiable Instruments Act, 1881. The disciplinary finding, however, concerned the respondent’s professional conduct and failure to honour admitted financial commitments; the Committee did not adjudicate criminal guilt under the Negotiable Instruments Act.
At the punishment stage, the Committee issued opportunities to the respondent to make representations on 3 October and 15 October 2026. He neither appeared nor filed a written representation on the findings. The Committee referred to Rule 19(1) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, under which it could proceed after the respondent failed to avail himself of the opportunity to make representations. It also considered an email dated 18 September 2026 in which he had stated that repayment would be made by 15 October 2026. Having considered the findings, the documentary record and the respondent’s earlier submissions, the Committee imposed a reprimand and a fine of ₹3 lakh. No removal from the Register of Members was ordered in this case. The decision illustrates that disciplinary accountability extends beyond technical audit or certification work to the honest performance of professional engagements, proper handling of client money and fulfilment of admitted repayment obligations.
The ICAI Disciplinary Committee has reprimanded CA Ajit Kothari and imposed a ₹3 lakh fine for failing to complete a professional assignment, retaining the client’s advance despite an obligation to refund it, and issuing repayment cheques that were dishonoured for insufficient funds.
The Committee held that personal financial hardship does not justify retaining money received for professional services that remain unperformed. Repeated repayment assurances, without fulfilment, also reflected a failure of professional accountability.
The final order dated 15 October 2026 followed findings dated 29 August 2026 in Maheshwar Hiremath v. CA Ajit Kothari, Case No. PR/553/2022-DD/687/2022-DC/1904/2024. The fine must be paid within 60 days of receipt of the order. The case is listed in the ICAI’s official disciplinary orders register.
Background of the Professional Engagement
The complaint was filed by Maheshwar Hiremath, Managing Director of Swati Airport Support Services Pvt. Ltd.
The respondent’s firm accepted an assignment concerning revival of a cancelled airport-related tender and obtaining permissions for an Indian rupee account for a Chinese company to receive contractual payments.
The engagement letter dated 8 September 2021 provided a mandate lasting 30 working days. It expressly required the advance to be returned if the assignment was not completed within that period.
The agreed total fee was ₹1.55 crore, with ₹15 lakh payable as an advance.
The Committee examined the subsequent receipts, correspondence, non-completion of work and unsuccessful attempts to obtain repayment.
₹34.51 Lakh Received in Connection With Assignment
The operative findings recorded receipts aggregating ₹34,51,075 from the complainant company.
Apart from the professional advance, the payments included amounts requested for bank deposits and administrative expenses connected with regulatory approvals.
The Committee relied on emails, bank transaction records and WhatsApp communications, which showed acknowledgment of receipt and requests for additional payments.
The respondent did not deny receiving the money. He also admitted that the assignment had not been completed.
Although parts of the complaint referred to a different total, the final findings and punishment order proceeded on ₹34,51,075.
Contractual Refund Obligation Remained Unfulfilled
The Committee considered the refund term in the engagement letter significant.
Once the respondent accepted the assignment and received money for its execution, he was required either to complete the agreed work or, upon failure, refund the amount in accordance with the contractual arrangement.
The respondent failed to fulfil either obligation.
During the proceedings, he acknowledged the outstanding liability and repeatedly indicated his willingness to repay. Nevertheless, the Committee recorded that repayment commitments were not honoured and the amount remained unpaid.
The finding therefore concerned more than an assignment that did not achieve its intended result. It involved admitted non-performance coupled with failure to return refundable money.
Financial Difficulties Did Not Excuse Retention
The respondent attributed his inability to complete the work and refund the money to financial difficulties arising from his parents’ illness.
He also stated that he intended to sell property in Rajasthan to discharge the liability.
The Committee held that personal hardship, however genuine, could not absolve a Chartered Accountant of obligations owed to a client.
It emphasised integrity, diligence and accountability in handling professional engagements and client funds.
The admissions, together with repeated unfulfilled assurances, were found inconsistent with the trust and confidence placed in a member of the profession.
Repayment Cheques Dishonoured for Insufficient Funds
The complainant produced repayment cheques and the corresponding bank intimations.
The findings referred to cheques dated 13 February 2022 for ₹34,51,075 and ₹1 lakh, and another dated 27 June 2022 for ₹24.01 lakh, which were returned unpaid because of insufficient funds.
The respondent did not dispute issuing these cheques.
Despite a legal notice and further repayment assurances, the liability remained unpaid. The Committee held that this conduct adversely affected the profession’s credibility and constituted other misconduct.
The disciplinary order did not determine criminal liability under the Negotiable Instruments Act.
Communications About Progress Also Examined
The complainant alleged that documents supplied by the respondent created an impression that the work was nearing completion.
The Committee examined a cheque copy relating to the proposed ICBC account and an unsigned communication purportedly addressed to the RBI.
It noted that the respondent acknowledged receipt of funds and non-completion without adequately explaining the status of the work allegedly undertaken.
These circumstances formed part of the overall conduct assessed alongside the contractual obligations and repayment defaults.
Reprimand and ₹3 Lakh Fine Imposed
The Committee found misconduct under Clause (7) of Part I of the Second Schedule and Clause (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949.
At the punishment stage, the respondent neither appeared nor filed a representation on the findings. After noting the opportunities provided and his further repayment assurance, the Committee proceeded under Rule 19(1).
It imposed a reprimand and ₹3 lakh fine, reinforcing that professional accountability extends to honouring agreed refund obligations and financial commitments to clients.
