Landmark Judgement on Code of Ethics

CA professional providing accommodation entries, defrauding revenue, deserves to be debarred from practice for life time - ICAI Vs Vivek Kapoor & Others (Punjab & Haryana High Court)

This order will dispose of three references bearing Nos. 5 and 6 of 2012 and 1 of 2013 received from Institute of Chartered Accountants of India (for short, 'the Institute') under Section 21(5) of the Chartered Accountants Act, 1949 (for short, 'the Act') in respect of disciplinary action taken against respondent No. 1-Vivek Kapoor, a practising Chartered Accountant at Amritsar.

After receipt of statement of case, notice was issued to respondent No. 1, however, it was reported that he had gone broad, hence, could not be served. Number of efforts were made thereafter for service of respondent No. 1, but all failed. The order passed on 7.8.2013 shows that house of respondent No. 1 was found to be locked. The Process Server was informed that he had sold his house six/seven months ago and had gone to some unknown place. The application for substituted service was allowed.

The service was effected by affixation and further by publication in two newspapers (English and Punjabi). Despite that, none appeared for respondent No. 1 Learned counsel for the petitioner submitted that disciplinary action against respondent No. 1 was initiated on the complaint dated
1.2.2006 received from the Commissioner of Income Tax-II, Amritsar. The allegations against respondent No. 1 were that he was master-mind in a scam of providing accommodation entries to various concerns after charging commission ranging from 1% to 3%. The beneficiaries were shown partners in various exporting concerns by writing forged partnership deeds. Several bank accounts were opened using fake names, photographs and introducers. Respondent No.1 himself was operating all benami bank accounts. After receipt of the complaint, proceedings were initiated against respondent No. 1. Copy of the complaint was sent to respondent No. 1 vide letter dated 2.6.2006 for response, however, the notice was received back undelivered with postal remarks “left country”. The matter was considered in the meeting of the Disciplinary Council in its meeting held in November, 2008. Respondent No. 1 was found guilty of professional and other misconduct. The matter was referred to the Disciplinary Committee for enquiry. Even during the course of enquiry before the Disciplinary Committee, despite best efforts, respondent No. 1 could not be served. The
Disciplinary Committee submitted its report on 10.6.2010, which was forwarded to respondent No. 1 as well as the complainant. They were informed that the report shall be considered by the Council in its meeting.

They were at liberty to file any response thereto. After considering the submissions of the complainant, the Council accepted the report of the Disciplinary Committee. Respondent No. 1 was held guilty of other misconduct under Section 22 read with Section 21 of the Act. The Council, vide order dated 14.7.2011, decided to recommend to this court for removal of the name of respondent No. 1 from the register of members for a period of 10 years.