ICAI Levies Rs. 2 Lakh Penalty on CA for Lapse in Due Diligence on MCA Filing; Held Guilty for Professional Misconduct

The Institute of Chartered Accountants of India (ICAI) has taken disciplinary action against a Chartered Accountant (CA) named Ramesh Kumar Tapadia. A complaint was registered against the CA by Sh. Vineet Rai, Deputy Registrar of Companies (ROC), West Bengal, Ministry of Corporate Affairs (MCA).

The case pertains to the certification of a statutory Form 10 on the MCA portal for a company, namely Sarvodaya Agro Power Ltd., in connection with the registration of charges for debentures worth Rs. 1 crore. The CA was alleged to have certified the statutory Form 10 without proper examination. Additionally, the company was accused of now showing any fixed assets in the balance sheet, yet the form asserted that the property was mortgaged to secure the debentures, and no mortgage-related documents were attached to the form, indicating a lack of due diligence and negligence in professional duties.

The Disciplinary Committee also noted that the complaint registered regarding the misuse of a digital signature was filed almost one year late after he was officially informed about the issue, and earlier FIRs submitted by him related to other companies, not this case. ICAI highlighted that a digital signature is the personal responsibility of the member, and proper care is expected to prevent misuse.

The committee further claimed that even after being aware of the entire issue, the CA did not approach the company, its directors, or authorities immediately. Considering all the aforesaid findings, the ICAI Disciplinary Committee held the CA guilty of professional misconduct under the Chartered Accountants Act for gross negligence and lack of due diligence. In conclusion, a penalty of Rs. 200,000 was imposed, payable within 60 days.