ICAI Clears CA in Tender Participation Case Involving Gujarat Rural Development Audit

The Tender Monitoring Directorate of the Institute of Chartered Accountants of India noticed a tender issued by the Rural Development Department, Government of Gujarat, for financial audit of District Rural Development Agencies (DRDAs). During review, it was found that some bidders had quoted fees lower than the estimated bid value. One such firm, M/s Prakash Chandra Jain & Co., Vadodara, through CA Dinesh C. Jain, had quoted Rs. 21,000 against an estimated value of Rs. 2,10,000. It was alleged that the firm violated ICAI Tender Guidelines by responding to a tender for audit services that did not prescribe a minimum fee. The matter was referred to the ICAI Disciplinary Committee.

Issue Before Court: Whether responding to a government tender for audit services without a prescribed minimum fee violates ICAI Tender Guidelines when the audit work is not exclusively reserved for Chartered Accountants.

Tribunal Held: The Disciplinary Committee of the Institute of Chartered Accountants of India held the respondent not guilty of professional misconduct. It observed that DRDAs are societies whose accounts can be audited by Chartered Accountants or other auditors authorized by the State Government.

Since the audit work was not exclusively reserved for Chartered Accountants under law, the ICAI Tender Guidelines restricting participation without a minimum fee did not apply. Therefore, the Committee concluded that responding to the tender did not amount to professional misconduct.

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