Disciplinary Proceedings Closed Against Chartered Accountant In Rs. 42 Crore Bank Fraud Case

The Central Bureau of Investigation initiated a complaint against CA Jani Basha K regarding a reported Rs. 42.17 crore bank fraud linked to M/s Pavai Alloys & Steel Pvt. Ltd. According to the Indian Bank’s report, the CBI claimed the Chartered Accountant endorsed two conflicting balance sheets for the 2006-07 fiscal year. One version was officially filed with the Registrar of Companies, while a second version allegedly featuring inflated financials was used to secure bank credit.

The Institute of Chartered Accountants of India (ICAI) found a prima facie case of professional misconduct, moving the inquiry to its Disciplinary Committee. The respondent countered these claims, maintaining he only signed the audited statements uploaded to the MCA portal. He distanced himself from any manipulated documents that may have been presented to the lending institution.

Central Issue: The central question was whether the Chartered Accountant committed professional misconduct by purportedly certifying two distinct sets of financial records—one for the ROC and another, more favorable version, for banking purposes.

Tribunal’s Ruling: The ICAI Disciplinary Committee cleared the respondent of all charges and terminated the case. The Committee highlighted a significant evidentiary gap that the complainant provided only photocopies rather than original versions of the disputed second balance sheet. Also, no forensic analysis or handwriting expertise was introduced to verify the signatures as those of the respondent. With witness testimonies also failing to bridge this gap, the evidence remained circumstantial.

The Committee extended the benefit of the doubt to the respondent as the complainant failed to meet the necessary burden of proof, concluding there was no verified link between him and the fraudulent filings.

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