ICAI Reprimands CA for Appointing New Directors Without Obtaining Consent from Existing Directors

The complainant, Mr Surinder Kumar Batra, filed a case against CA Chander Aggarwal, alleging that he incorrectly filed Form DIR-12 while appointing two new directors in the company.

The company had three directors, including the complainant. The complainant alleged that two persons Shri Sanjeev Chaudhary and Shri Abhishek Chaudhary, were appointed as directors without the consent of any general meeting or issuing notices to the existing directors. The respondent digitally certified the Form DIR-12 and filed it in the absence of compliance with the statutory requirements.

The complainant also informed that the dispute was taken to the National Company Law Tribunal (NCLT), where the respondent was held guilty along with two directors.

During the ICAI proceedings, the respondent claimed that the minutes were presented by the directors for verification and were retained by the company. He alleged that both the complainant and the company never showed the minute books before the NCLT. He requested leniency.

The ICAI Disciplinary Committee concluded that the respondent had certified Form DIR 12 without exercising due diligence and without presenting any documents required by the ICAI. The committee, based on the NCLT findings, held the respondent GUILTY of professional misconduct under Clause (7) of Part-I of the Second Schedule to the Chartered Accountants Act, 1949.

Therefore, the respondent, i.e., CA Chander Aggarwal, was reprimanded under Section 21B(3)(a) of the CA Act.