ICAI Reprimands CA for Certifying DIR-12 Without Valid DIN at Time of Appointment

A complaint by Mr. Ishwar Lal alleged that CA Priya Gupta certified Form DIR-12 appointing Shri Narender Jha as Director with effect, even though his DIN was allotted only on 14.10.2019. The appointment was stated to have been approved in the Board Meeting and regularised in the AGM.

The Respondent contended that at the time of certification, the DIN had already been allotted and that she relied on documents provided by the company. She denied mala fide intent and attributed the lapse to oversight and internal disputes.

Main Issue: Whether certifying DIR-12 reflecting the retrospective appointment of a director who did not hold a valid DIN on the date of appointment amounts to failure to exercise due diligence under Clause (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.

DC’s Ruling: The Disciplinary Committee of the Institute of Chartered Accountants of India held that possession of a valid DIN is a mandatory precondition for appointment as a director under the Companies Act, 2013. Though the DIN was available on the date of certification, the effective appointment date shown in DIR-12 was 16.09.2019, when no DIN existed. Certifying compliance in such circumstances reflected lack of due diligence.

The Committee found the Respondent guilty of Professional Misconduct under Clause (7) of Part I of the Second Schedule and, under Section 21B(3)(a), ordered that she be Reprimanded.

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