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BOD 481/2018Not guilty

A CBI complaint accused a chartered accountant in a bank loan probe. Its own paperwork closed the case years later.

6 min readJainam Shah

A CBI officer complained to ICAI about a chartered accountant caught up in a bank loan-fraud probe. The Board never reached the merits — the complaint's authorisation was signed a year late.

Held
Not guiltyThe charge was not made out
Forum
Board of Discipline (First Schedule)
Clauses
Item (2) of Part IV of the First Schedule
Decided
File no.
PR/G/337/2017-DD/347/2017-BOD/481/2018
Source
Original order (PDF)

A Visakhapatnam chartered accountant and his wife took a home loan from a bank later accused of sanctioning it too easily. When investigators looked into the loan, a police officer's account of it reached the Institute as a complaint of professional misconduct.1

What happened#

A chartered accountant and his wife take a home loan of forty lakh rupees from a bank to buy eight residential plots, with a sales associate and a panel valuer involved in arranging and valuing the purchase.
The loan turns bad. A bank employee's complaint leads the Central Bureau of Investigation's Anti-Corruption Branch to register a case against senior bank officials and others, including the chartered accountant, over how the loan was sanctioned and the property valued.
An investigating officer writes to the Institute about the chartered accountant's role. The Institute's own screening authority looks at the complaint first and finds no case to answer.
The Board disagrees with that view. Because a criminal trial is still pending against the chartered accountant on the same facts, it decides the question deserves a proper hearing rather than being closed at the screening stage, and sends the matter forward.
Years pass before the case is finally heard. When it is, the chartered accountant does not argue about the loan at all — he argues about the paperwork behind the complaint itself, and that is the only question the Board ends up deciding.

The paperwork problem was specific. The complaint itself, in the Institute's Form-I, was filed in October 2017. The authorisation empowering the complaint's author to bring it was issued by the competent authority only in September 2018 — the Board recorded that it came "after an inordinate and unexplained delay of nearly one year" (para 9), by which point the written statement, the rejoinder and additional documents had already been exchanged.

Nobody on either side ever placed the underlying loan allegations before the Board for a decision on the facts. The case was disposed of entirely on the authorisation question.

The charge#

  • Item (2) of Part IV of the First Schedule — the Act's catch-all for other misconduct: conduct that, whether or not connected with professional work, brings disrepute to the profession or the Institute in the Council's opinion.2 The Institute's screening authority had first cleared the respondent of this; the Board disagreed and sent the matter for a full hearing, holding him "prima facie Guilty of Other Misconduct" (para 2) pending that hearing.

That prima facie view is where the case stalled. It was never converted into a final finding on the loan allegations, because the Board disposed of the whole complaint on authorisation instead.

What the respondent said#

His defence did not touch the loan. He argued that the disciplinary proceedings were void from the outset: the complaint was filed without a valid authorisation from an officer of the required rank, and the authorisation eventually relied on was issued only in September 2018 — nearly a year after the complaint of October 2017, and after the case had already progressed through pleadings. A defect of that kind, he argued, could not be cured after the fact; it made the complaint void ab initio, incapable of being ratified once the proceedings were already under way (paras 5-6).

He additionally asked that the disciplinary case be stayed until his pending criminal trial, based on the same facts and evidence, had concluded, to avoid the risk of conflicting findings (para 7).

What the Board held#

The Board agreed with the authorisation argument in full. It held:

The requirement of authorization is statutory in character and admits of no dilution; it mandates strict compliance at the time of filing the complaint. An authorization furnished ex post facto cannot be recognised in the eyes of law, nor does it cure the foundational defect in the institution of proceedings. (para 9)

Because that defect went to the very foundation of the complaint, the Board did not go on to decide the stay request or examine the loan allegations at all:

the Board deems it wholly unnecessary to embark upon an examination of the merits of the allegations contained in the complaint. The complaint is accordingly dismissed as not maintainable. (para 10)

The order#

the proceedings stand terminated, and the Respondent is acquitted of all charges and held Not Guilty. (para 10)

No punishment stage follows a not-guilty finding. The Board closed the complaint under Rule 15(2).3 It had taken close to eight years — from the complaint in 2017, through a screening opinion, a Board hearing that overruled it, two adjournments, and a final hearing — to reach a decision that discussed none of the underlying facts.4

Why it matters#

This section is ours, not the Board's.

A disciplinary complaint needs a valid authorisation on the day it is filed, not eventually. The authorisation here arrived nearly a year late, and that alone was fatal — however serious the underlying allegation. Anyone filing on an organisation's behalf should have that authorisation in hand before the complaint goes in, not after.

A defect in how a case starts can end it before the facts are ever heard. Eight years of proceedings closed without a single finding on the loan itself. A procedural objection raised early can be worth more than an argument on the merits raised late.

A prima facie view sent forward for a full hearing is not a finding of guilt. The Board's 2018 opinion that the respondent was "prima facie Guilty" was only ever a decision to investigate further — and the eventual outcome turned on something that screening stage never considered.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.

Footnotes#

  1. Sh. S B Sankar, Superintendent of Police, Head of Branch, CBI Anti-Corruption Branch, Visakhapatnam was the complainant, writing in his official capacity in connection with a CBI case over the sanction and disbursal of home loans. CA. Kaza Ambika Prasad (M. No. 024006), Visakhapatnam was the respondent. ↩

  2. Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 covers "other misconduct": any act or omission, connected with professional work or not, that in the opinion of the Council brings disrepute to the profession or to the Institute. ↩

  3. Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 — where the Board finds a member not guilty, it records that finding and orders the complaint closed. There is no punishment hearing. ↩

  4. CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member), all present in person. The final hearing was held at ICAI Bhawan, Chennai on 24 December 2025, after two earlier hearings in 2019 had been adjourned — one at the respondent's request, one at the complainant's. Findings were signed 16 January 2026. ↩

Written by Jainam Shah. Found guilty under Item (2) of Part IV of the First Schedule; the Board ordered a not guilty. General information, not legal or professional advice — read the order itself before relying on it.

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