Regarding memorandum to be given to Home Ministry & Police Head Quarters of the Country as well as respective states including all IG, DM & SP before any FIR or Arrest of a Chartered Accountant.

Now days, it is seen very often trend for arresting CHARTERED ACCOUNTANTS’s in almost all cases involving financial fraud/embezzlement, misappropriation of siphoning of funds.

Documents are filled by CHARTERED ACCOUNTANTS in ordinary course of performing his professional duty & he has no reason to doubt documents produced before him. There is difference between Negligence and Fraud. Negligence does not involve criminal offence unless it is proved that it is deliberate action with an intention to deceive other person or act done to take undue advantage of the person/situation. The negligence is not there in CRPC in respect of financial transactions, it has terms cheating, forgery, frauds, breach of trust, misappropriation, etc thus just negligence cannot attract criminal breach. Unless “mes-rea” i.e. the criminal intention of the CHARTERED ACCOUNTANTS auditing the accounts is proved, no criminal actions, such as arrest can be taken against him. Any officer cannot arrest the CHARTERED ACCOUNTANTS just like that and spoil his carrier unless he can prove his fraudulent intention with proper evidence, which can stand in the court of law. They cannot take search at the premise of CHARTERED ACCOUNTANTS unless they have order of court and they prove in the court that they have sufficient evidence of information that the importance evidence has been kept secretly at a particular place.

CHARTERED ACCOUNTANT is not required to know circumstances under which documents has been signed. There are penalty provisions under the Companies Act , if any professional falsely certify documents. If a CA is guilty in performing his duty, there are provisions under the Chartered Accountants Act, 1949 for disciplinary action against him. CHARTERED ACCOUNTANT is a member of ICAI, which has been established by Parliament under Chartered Accountants Act, 1949. Sec 21 of the Chartered Accountants Act, 1949 provides power to council to establish a Disciplinary Directorate headed by an officer of the Institute designated as Director (Discipline) for making investigations in respect of any information or complaint received by it. Sec 21C of Act provides Disciplinary Directorate to have powers of civil court. If there is any complain against any CHARTERED ACCOUNTANTS, a letter of complaint can be sent to Director (Discipline), ICAI Bhawan Indraprastha Marg, Post Box No. 7100, NEW DELHI – 110 002

A CHARTERED ACCOUNTANT cannot be treated at par with criminal without any guilt or crime by arresting him by police. He has not been given opportunity to be heared also. Parliament has passed Chartered accountant Act, 1949 which contains mechanism to punish errant CHARTERED ACCOUNTANT member for any negligence in performing his duty.

I request the office of ICAI to take this issue to be discussed in the Council and a memorandum should be send to Home Ministry & Police Head Quarters of the Country as well as respective states including all IG,DM & SP regarding proper process to be followed by the machinery before any FIR or Arrest of a Chartered Accountant. A respected person in society should not be harassed by police & should not be treated at par with criminals.

The Writer may reached at-

CA.Rohit Ruwatia Agarwal
{B.Com, FCA, CCCA, FAFP (ICAI)}
Vice-Chairman, CIRC, ICAI
(Setup by an act of parliament)
Mobile – 9571799999,
E Mail – chartered_ruwatia@yahoo.in

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6 responses to “Proper process to be followed by machinery before any FIR or Arrest of a CA”

  1. Srin says:

    The Arrest warrant clause was never form of basic act , why has it become urgently necessary to finalise process . Why . Is it only because of few erant members greed ,,
    Profession must be kept @ highest standard by penalising greedy members by helping authorise in arresting them n clearing the reputation once for all
    Only ETHICAL Approach

  2. CA Pradeep Verma says:

    Necessary action should be taken by ICAI on this matter immediately.

  3. Munir Bagwan says:

    Agree with writer

  4. Virendra Sharma says:

    Sir,
    Chartered accountant Act, is of 1949 but Criminal Procedure Code is of 1973 so kindly tell me if any exemption is provided in CrPC for CA or any provision regarding discrimination between a CA and general public exists on the point of Arrest or FIR.

  5. Dilip Kumar says:

    Yes, proper process must be followed by the machinery before any FIR or arrest of a Chartered Accountant. The ICAI must take suitable action in this regard.

  6. Dhruv Pandey CA says:

    Excellent article and useful tips for CA

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