The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has reprimanded CA. Rahul Yadav for professional misconduct. The case was brought forward by the Registrar of Companies, Mumbai, regarding the certification of Form INC — 22 without exercising due diligence. The Committee’s findings, dated December 4, 2024, concluded that the Chartered Accountant was guilty of professional misconduct as per Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. During the hearing, Mr. Yadav claimed an associate, Mr. Manish Jain, had visited the company’s registered office, but he could not provide any evidence to support this. The Committee noted that an affidavit from the associate was not submitted correctly and was not referenced in his written or oral submissions. Since Mr. Yadav admitted he had no proof of the visit and failed to show he had exercised due diligence, the committee found the misconduct to be established. The committee therefore ordered that CA. Rahul Yadav be reprimanded under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
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 213(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.
File No.:- [PR/G/126/17/DD/422/2022/DC/1796/2023)
In the matter of:
Registrar of Companies, Mumbai
Ministry of Corporate Affairs
Versus
CA. Rahul Yadav
MEMBERS PRESENT:
1. Shri Jiwesh Nandan, I.A.S (Retd), Presiding Officer and Government Nominee (In person)
2. Dakshita Das, I.R.A.S. (Retd.), Government Nominee (Through VC)
3. Mangesh P Kinare, Member (In person)
4. Abhay Chhajed, Member (In person)
DATE OF HEARING : 06th January 2025
DATE OF ORDER : 20th January 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. Rahul Yadav (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 communicaliun was addressed to him thereby granting an opportunity of being heard in person/ through video conferencing and to make representation before the Committee on 06.01.2025.
3. The Committee noted that on 06.01.2025, the Respondent was present through video conferencing. During the hearing, the Respondent reiterated his written representation dated 02nd January 2025 filed by him on the Findings of the Disciplinary Committee. He submitted that his associate Mr. Manish Jain had visited registered office of the Company and had submitted the affidavit dated 09.05.2024 for confirmation of visit to this effect but the same has not been considered by the Committee in its Findings. The Committee further noted that during the hearing, the Respondent was specifically asked to provide evidence of the visit of his associate to the registered office of the Company, but he categorically denied of having any evidence/ proof and he nowhere mentioned about the name or affidavit of his associate who claimed to have visited the registered office of the Company.
4. The committee noted that a notice dated 06.06.2024 for hearing before the Committee was sent to the Respondent for appearance before it in its meeting scheduled on 18.06.2024. In the said notice for hearing, it was mentioned that the written submissions along with documents if any shall be submitted by the Respondent to be delivered at the office of Institute located at ICAI, Vishwas Nagar, Delhi – 110032. Further, it was also mentioned to submit the declaration by the Respondent for appearance before the Committee in a specified format. The Committee also noted that in response to the said notice, the Respondent vide his email dated 14thJune 2024 while submitting such declaration in the specified format and intimating his mode of appearance before the committee, simply attached an affidavit dated 09/05/2024 without any mention or reference of the same in his written submissions. The said affidavit was not filed properly as stated above in the office of Institute by the Respondent, without which the same cannot be correlated to his written submissions or taken as part of his submissions. The Committee noted that the Respondent has himself admitted in his written representation dated 0/.01.2025 that due to oversight on his part, manner. The Committee observed that the relevance of the document attached in email and the point which the Respondent intends to prove placing reliance on such document was required to be clearly mentioned in the written representation filed before the Committee.
5. The Committee further observed that the Respondent was asked to make his submissions during the hearing, but he did not make any reference to the name of his associate or specific affidavit submitted by such associate for physical verification of the registered office of the Company undertaken by him. The responsibility of giving such information on evidence relied upon by him while making submission before the Committee was upon the Respondent which he had failed do so at the hearing stage. The Committee felt that in the absence of any specific reference of an affidavit of his associate in his oral or written submissions before it, the random attachment in an email (among various attached Documents) which is in response to notice for appearance in the meeting and not filed in proper manner, cannot be treated as submission of the respondent in the matter.
6. Further, the Committee observed that the Respondent failed to bring on record, the request/authorization letter through which he had authorized Mr. Manish Jain to visit the registered office Of the Company. In view of these vital facts, the Committee was of the view that the above submission of the Respondent is not tenable at this stage. Further, the name of Mr. Manish Jain was neither mentioned or referred to in any of his oral submissions nor in written submissions filed before the Committee or at PFO stage, and non- mentioning of such vital document where reliance was placed by him is incomprehensive and as such appear to be an afterthought on the part of the Respondent. Accordingly, no credence can be given to such a document.
7. The Committee considered the reasoning as contained in Findings holding the Respondent ‘Guilty’ of Professional Misconduct vis-à-vis written and verbal representation of the Respondent.
8. 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 the Respondent himself has admitted that the registered office address was not visited by him, rather it was visited by his associate based at Mumbai and he has no proof of the visit of registered office of the Company by his associate. Further, the Respondent has not brought forward sufficient evidence to prove that required due diligence was exercised by him before certifying Form INC — 22 for verification of registered office of the Company. The Committee was thus of the view that the Respondent had failed to exercise due diligence in the matter.
9. 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.
10. 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 Misconduct.
11. Thus, the Committee ordered that the Respondent i.e., CA. Rahul Yadav be REPRIMANDED under Section 21B(3)(a) of the Chartered Accountants Act 1949..
Sd/-
(SHRI JIWESH NANDAN, I.A.S. (RETD.)
(PRESIDING OFFICER AND GOVERNMENT NOMINEE)
Sd/-
(MS. DAKSHITA DAS, I.R.A.S.{RETD.})
GOVERNMENT NOMINEE
Sd/-
(CA. MANGESH P KINARE)
MEMBER
Sd/-
(CA. ABHAY CHHAJED)
MEMBER
