Facts of the Case

The complainant, CA Jayesh Vasantlal Shah, was a partner in the respondent’s firm, M/s J Singh & Associates, while the respondent, CA Jaleshwar Singh, was the Managing Partner holding 80% profit share. The complainant alleged that the respondent forged his signatures on seven forensic audit reports, including reports relating to M/s SRS Real Infrastructure Ltd. and M/s SRS Real Estate Ltd., which were forensic audit assignments allotted by Canara Bank.

The matter concerning these two companies had also been referred to the CBI by the Hon’ble Delhi High Court in recovery proceedings initiated by Canara Bank. The complainant further alleged non-payment of his share of profits and conveyance expenses, non-acceptance of his resignation, and adoption of illegitimate means by the respondent firm for obtaining assignments from nationalised banks, government companies and other entities.

Issues Involved

Whether the respondent Chartered Accountant was guilty of “Other Misconduct” under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 for allegedly forging the complainant’s signatures on forensic audit reports, withholding partnership dues, and indulging in alleged malpractices in obtaining professional assignments.

Petitioner’s Arguments

The complainant alleged that the respondent forged his signatures on forensic audit reports without his knowledge or consent and continued to use such reports before banks and investigating agencies. He also contended that his resignation was not accepted, his digital signature certificate was retained, and his receivables from the firm were wrongfully removed from the ledger. Additional allegations were made regarding alleged malpractices in tendering, appointment of partners merely for signing reports, and exploitation of paid Chartered Accountants.

Respondent’s Arguments

The respondent denied all allegations and submitted that the complainant was a full-time partner drawing monthly remuneration and was regularly signing audit reports, certificates and forensic audit reports on behalf of the firm. It was submitted that all the forensic audit reports in question were signed by the complainant himself and handed over for dispatch, and that office copies were retained under the complainant’s custody.

The respondent relied on affidavits of office staff and pointed out that both partners were summoned by the CBI as witnesses and that the complainant, while stating that he did not conduct the forensic audit, never denied signing the reports. The respondent further submitted that allegations of forgery were criminal in nature and outside the jurisdiction of ICAI, denied any dues payable to the complainant, and produced the complainant’s resignation letter dated 29.10.2020 citing age, health and personal reasons. The respondent also submitted that none of the allegations of malpractice were supported by documentary evidence.

Court Order / Findings

The Board of Discipline examined the forensic audit reports, correspondence with banks, resignation letter, submissions of both parties and available documentary evidence. The Board noted that the complainant produced a copy of a forensic audit report of M/s Pooja Soya Industries Ltd., wherein the signature appearing matched the complainant’s signature as filed with ICAI.

The Board also took note of replies received from banks, which stated that the signatures on the forensic audit reports were of the complainant, though the banks clarified that they did not maintain KYC of individual partners to independently verify authenticity. The Board observed that despite serious allegations of forgery, the complainant failed to produce any corroborative documentary or expert evidence to substantiate the charge.

With respect to allegations regarding non-payment of dues and conveyance expenses, the Board found that the complainant relied only on general assertions and an email seeking information, which did not establish misconduct. The Board further observed that the complainant’s resignation letter clearly cited personal reasons such as age, health and travel difficulties, and not alleged forgery or non-payment of dues, thereby weakening the complainant’s case.

The Board also noted that other allegations regarding malpractices in obtaining assignments were unsupported by evidence and remained mere contentions. During the hearing, the complainant stated that he had nothing further to add and concurred with the Prima Facie Opinion of the Director (Discipline).

Important Clarification

The Board clarified that serious allegations such as forgery of signatures and systemic malpractices must be supported by cogent and corroborative evidence. Mere assertions, suspicions, or subsequent disputes arising out of partnership relations are insufficient to establish Other Misconduct under the Chartered Accountants Act, 1949.

Final Outcome

The Board of Discipline, ICAI, held that CA Jaleshwar Singh was NOT GUILTY of Other Misconduct under Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949. In the absence of corroborative evidence, the proceedings were ordered to be closed under Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, by order dated 27.08.2024.

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