The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI), Bench-III, in its order dated 31st July 2024, held CA Pandia Rajan R guilty of professional misconduct under Item (7), Part I of the Second Schedule to the Chartered Accountants Act, 1949. The case was initiated following a complaint by the Deputy Registrar of Companies, Karnataka, regarding gross negligence in certifying the incorporation of six companies between May and July 2021, all sharing the same registered office address.
The Committee found that the respondent certified e-form SPICE+ claiming he had physically verified the registered office of each company. However, he admitted to making only a single visit to the address, despite the companies being incorporated on different dates. The verification lacked due diligence as the premises lacked signage or company identification, and no CINs were displayed. A police complaint later revealed that 17 companies used the same address.
Further, the respondent failed to ensure that the rent agreements for the registered offices complied with the Companies Act, 2013. His reliance on outdated submissions during the hearing and absence on the scheduled date led the Committee to conclude that he neglected both procedural and ethical obligations.
Considering the seriousness of the lapse and its implications, the Committee ordered removal of CA Pandia Rajan’s name from the Register of Members for 60 days and imposed a fine of ₹20,000 to be paid within 90 days. Failure to comply would result in an additional 30-day removal. The order highlights the ICAI’s stance on enforcing accountability in professional certifications.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
DISCIPLINARY COMMITTEE [BENCH-Ill (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 216(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/103/2022/DD/130/2022/DC/1674/2022
In the matter of:
Dy. Registrar of Companies,
…..Complainant
Versus
CA. Pandia Rajan R
Respondent
MEMBERS PRESENT:
CA. Charanjot Singh Nanda, Presiding Officer (Present in Person)
Smt. Anita Kapur, Government Nominee (Present in Person)
Dr. K. Rajeswara Rao, Government Nominee (Present through Video Conferencing Mode)
CA. Piyush S. Chhajed, Member (Present in person)
Date of Hearing:2 rd May 2024
Date of Order: 31st July, 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 dated 3rd October 2023, the Disciplinary Committee was, inter-alia, of the opinion that CA. Pandia Rajan R (hereinafter referred to as the “Respondent”) was GUILTY of Professional Misconduct falling within the meaning of Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.
2. That charge against the Respondent was that he was grossly negligent in the conduct of his professional duties as he incorporated six Companies namely M/s Halld Technology Private Limited, M/s Russury Technology Private Limited, M/s Hamel Communications Private Limited, M/s Smallkart E-commerce Private Limited, M/s Barbra E-commerce Private Limited and M/s Maarata Techtronic Solutions Private Limited (hereinafter referred as the ‘Subject Companies’) without exercising due diligence.
3. That pursuant to the said findings, an action under Section 216(3) of the Chartered Accountants Act, 1949 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person/through video conferencing and to make representation before the Committee on 2nd May 2024.
4. The Committee noted that on the date of the hearing held on 2nd May 2024, the Respondent was not present. The Committee further noted that the Respondent had not submitted representation on the findings of the Committee and merely relied upon his letter dated 23rd April, 2022 which was forwarded by him with his email dated 1st May, 2024. The Committee further noted that even at the hearing stage, the Respondent had relied upon his submissions dated 23rd April 2022. The Committee upon perusal of the said submissions noted that the same were submitted by the Respondent at the time of formation of the Prima Fade Opinion in the matter. The Committee, accordingly, decided to consider the letter dated 23rd April 2022 as the final submission of the Respondent and in absence of the Respondent decided to proceed ahead on merits of the matter.
5. The Committee, therefore, considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct.
6. Keeping in view the facts and circumstances of the case, along with the material on record, the Committee noted that the Respondent had incorporated six companies between 19th May 2021 to 5th July 2021 at the same address. The Committee further noted that the Respondent while certifying e-form SPICE+ of subject Companies had specifically declared that he had personally verified the registered office of all the Companies whereas as per version of the Respondent he had made only single visit at the address for verification of address of all companies. The Committee viewed that it was not clear how the Respondent convinced himself that one single visit would serve the purpose of physical verification of all six companies which were incorporated on different dates.
7. The Committee also noted that the photographs of premises as brought on record by the Respondent at prima-facie stage, neither displayed any name plate/ signboard of name/ address of any Company nor their CIN number outside the said premises. The Committee also noted that a Police Complaint dated 21/01/2022 was also filed by the Complainant I wherein it was stated that around 17 companies were found to have the same registered office.
8. The Committee further observed that the Respondent failed to ensure that the rent agreement entered into by the Company(ies) was in compliance with the requirements of registered office as envisaged under the Companies Act, 2013.
9. Accordingly, it was viewed that the Respondent was grossly negligent not only for certifying the incorrect details in SPICE+ regarding personally visiting the registered office, but also in not observing from the documents available for his verification that the registered office being reported in SPICE+ was not on the lines as envisaged under the Companies Act, 2013. This conduct of the Respondent constitutes Professional Misconduct as per Item (7) of Part 1 of the Second Schedule to the Chartered Accountants Act, 1949.
10. The professional misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s findings dated 3rd October 2023 which is to be read in conjunction with the instant Order being passed in the case.
11. The Committee, hence, viewed that the ends of justice will be met if appropriate punishment commensurate with his professional misconduct is given to him.
12. Accordingly, the Committee, upon considering the nature of charge and the gravity of the matter ordered that the name of CA. Pandia Rajan R be removed from the Register of Members for a period of 60 (sixty) days and a fine of Rs. 20,000/-(Rupees Twenty Thousand only) be imposed upon him, to be paid within 90 days of the receipt of the order and in case of failure in payment of fine as stipulated, the name of the Respondent be removed for a further period of 30 days from the Register of Members.
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(CA. CHARANJOT SINGH NANDA)
PRESIDING OFFICER
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(SMT. ANITA KAPUR)
GOVERNMENT NOMINEE
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(DR. K. RAJESWARA RAO)
GOVERNMENT NOMINEE
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(CA. PIYUSH S CHHAJED)
GOVERNMENT NOMINEE
MEMBER
DATE: 31st JULY, 2024
PLACE: NEW DELHI
