CA Professional Misconduct: ICAI Finds CA Guilty of Professional Misconducts for using Client’s Money of Rs. 2.6 Core for Personal Use

CA Professional Misconduct: ICAI Finds CA Guilty of Professional Misconducts for using Client’s Money of Rs. 2.6 Core for Personal Use CA Professional Misconduct: CA. Subodh Maheshwari (M. No. 071569), Bhopal (hereinafter referred to as the Respondent") was GUILTY of Professional Misconduct as per the Opinion of by ICAI Disciplinary Committee. The Committee noted that this case was earlier fixed for punishment on 25th April 2022 and 1st June 2022 and was adjourned on both dates at the request of the Respondent. The Committee noted .that on the present day i.e. 28th June 2022, the Respondent was present through video conferencing mode. The Respondent submitted that he is senior citizen having 36 years of practice in Bhopal and has an unblemished professional track record. He further urges the Committee that if any punishment is awarded to him, it would be a huge loss to him and his profession. On the merits, the Respondent relied upon his submission dated 04th March 2022 in response to findings of the Disciplinary Committee whereby he mentioned that after getting aware of the First Information Report (FIR) in the matter, he had immediately returned the amount the Complainant Company and hence, the Complainant did not have any valid case against him. He further stated this fact was also considered by Hon'ble Madhya Pradesh High Court while granting Anticipatory Bail to him. He stated that alleged cheques were pretended to be issued for payment of VAT in the name of SBI and had the same being issued for payment of VAT the cheques were required to be issued as "Pay to Govt of MP under head 040- Tax on sale, trade etc" under the MP VAT Act 2002. The Respondent, accordingly, prays before the Committee that n0 punishment may be imposed upon him. The Committee noted that the Respondent was earlier associated with M/s Bhopal Sahakari Dugdha Sangh as a consultant. The Committee noted that it has already been established that the latter had given cheques amounting to Rs. 2.60 crores for the payment of VAT to the Respondent, who fabricated the cheques in his name as well in his wife's and son's name. The Committee noted that an amount of Rs. 2.60 crores were remitted to the Respondent in the different trenches by way of 12 cheques dated between 29th October 2013 to 19th June 2015. The Committee on perusal of the cheques noted that these cheques were clearly tempered and had brought loss to the Government exchequer Therefore, keeping in view the facts and circumstances of the case, material on record and submissions of the Respondent before it, the Committee ordered that the name of the Respondent - CA. Subodh Maheshwari {M. No. 071569), Bhopal, be removed from the Register of members for a period of 01 (One) year along with fine of Rs. 1,00,000/- (Rupees One Lakh). The Committee noted that in the present case, during the period October 2013 to October 2015 certain cheques amounting to Rs. 2.60 crores for the payment of VAT were given by M/s Bhopal Sahakari Dugdha Sangh, a co-operative society (hereinafter referred as the "Organisation") to the Respondent of which he was earlier associated as consultant. The charge against the Respondent is that he fabricated these cheques in his name as well in his wife's and son's name. Accordingly, the Respondent was held prima-facie Guilty by Director (Discipline) of Professional and/or Other Misconduct falling within the meaning of Clause (2) of Part IV of the First Schedule and of Professional Misconduct falling within the meaning of Clause (4) of Part II of the Second Schedule to the Chartered Accountant Act, 1949 read with Section 22 of the said Act. The Committee noted the submission of the respondent his Counsel whereby they inter-alia stated as under: a. That alleged cheques were never handed over to the Respondent and were directly credited to the account of the Respondent or his wife or his son: b. The Respondent Was not aware of the purpose for which cheques were given by the organisation to him. He was of bonafide belief that the same were given by Mr. Sudhir Jain, Accountant of the Organisation for Investment in stock market and Mutual funds. c. The Respondent was having share business also. The Respondent assured fixed return to Mr. Sudhir Jain in lieu of deposits. d. When the Respondent came to know about FIR against him, he immediately returned the amount to the Organisation. e. The Respondent worked as Tax consultant till 31 st March, 2013 only and as per his scope of work the same was not covering depositing of cheques. The Committee with regard to the contention of the Respondent that he has worked as the tax consultant only upto 31st March 2013, noted that in letter dated 3rd February 2015 (Page D-26 of prima-facie opinion) of the Respondent to the organisation, he himself referred to the M.P VAT, Entry Tax and Central Sales Tax assessment orders for the year 1-4-2012 to 31-03-2013. The Committee further noted that in order dated 19th February 2015 the Deputy Commissioner, Sales tax (Page D-32A of prima-facie opinion) had mentioned that the Respondent along with Manager Finance of the Organisation were present in compliance to notice to the Organisation. The Committee was of view that the contention of the Respondent is not tenable as the said documents depicts his association with the organization even after the year 2013. The Committee further noted that the Respondent had admitted that he was doing investment business and alleged cheques were given and deposited directly in his account(s) by Mr. Sudhir Jain who was working as an accountant in the organization. When the Committee enquired from him from where Mr. Sudhir Jain (who was working as an accountant) had given an amount in crores to him, the Respondent failed to provide any justified answer and merely mentioned that Mr. Sudhir Jain might be having other incomes also. In view of the above findings stated in above paras vis a vis material on record, Accordingly, in the considered opinion of the Committee, the Respondent is GUILTY of Professional and/or Other Misconduct falling within the meaning of Item (2) of Part-IV of the First schedule and Item (4) of Part II of Second Schedule to the Chartered Accountants Act, 1949 read with Section 22 of the Act.