ICAI Slams 5-Year-Late ROC Inspection: Clears CA in Alleged False Certification Case

The present complaint (no. PR/G/88A/2022-DD/446/2022-DC/1701/2022) has been filed by Mr Rajiv Kadam, Senior Technical Officer, Registrar of Companies, Mumbai, before the ICAI Disciplinary Committee (Bench-II, 2025–2026) against a Chartered Accountant (CA), Dhruvaprakash Shetty (M. No. 103534). The bench hearing the case was constituted under Section 21 B of the Chartered Accountants Act, 1949, and the case was heard on July 28, 2025.

Background of Case:

The complainant informed that CA Dhruvaprakash Shetty had wrongly certified the incorporation and its related documents, i.e., Form INC-32 (SPICE Form) of ‘M/s Alibaba Toys Private Limited’, incorporated on March 22, 2017.

When the registered office address was physically verified by the ROC Mumbai, the company was not found at its registered location, i.e., B/18, New Sonal CHS Ltd., Virar West. Thus, ROC alleged that the CA did not perform due diligence before certifying the form. ROC ruled CA guilty of misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949.

ROC claimed that CA Shetty gave a false declaration in Form INC-32 that he had personally visited and verified the office. In a statement to ROC, he allegedly admitted that his staff (Mr Mayurpal Jain) visited the premises and not him.

What Did CA Shetty Say?

CA Shetty admitted that he did personally verify the address before certification. The premises belonged to the mother of one of the first directors of the company, who gave written consent and NOC to use it as the registered office.

For his statement, he submitted multiple proofs, including ownership and consent documents (affidavit, society letter), photos of the office premises, witness confirmations and staff verification statements, and MCA records showing that the same address still exists and the company is active.

The company was newly incorporated at that time and had not started operations, so it was normal for the office to be residential.

ICAI Disciplinary Committee’s Observations:

ROC’s physical inspection was done five years later in 2022, which is too long after the certification in 2017. The CA’s role was limited to certifying incorporation documents; he had no ongoing role with the company afterwards. The company remains active and registered at the same address in the MCA records.

The ownership documents, affidavit, photographs, and witness statements submitted by the CA supported his claim of having done due diligence. The law (Form INC-32) only requires the registered office to be verifiable and capable of receiving communications, not fully operational at incorporation.

ICAI Disciplinary Committee’s Final Order:

The Institute of Chartered Accountants of India (ICAI) Disciplinary Committee, in its final decision, dismissed the complaint registered by ROC (Registrar of Companies) Mumbai Rule 19(2) filed against CA Dhruvaprakash Shetty, where it was found that CA Shetty had exercised necessary due diligence. His conduct showed a reasonable standard of care expected from a professional.

Hence, the ICAI Disciplinary Committee concluded that CA Shetty is not guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, and is now cleared of all imposed charges.