A trust's auditor was accused of pocketing a share of its stolen ₹7 crore. The alleged theft was never proven.

A Member of Parliament's trust accused its secretary of stealing ₹7 crore from it, and accused the trust's own auditor of taking a share of the loot. It also said the auditor had separately confessed to defrauding the trust, and had signed a ₹3.70 crore cheque to settle it.¹

What happened#

Three details did the most damage to the complaint. The first was a date: the complainant said the transfer to the auditor happened on the same day as the theft, but the police's own account put it more than two weeks later, and the money moved by bank transfer rather than in cash (para 5). The second was a document the trust's own paperwork failed to support — its financial statements for the relevant period, prepared by a different chartered accountant and signed by the complainant herself, made no mention of any missing ₹7 crore at all (para 6). The third cut the other way: the tax department was separately investigating the complainant over an alleged ₹18.18 crore embezzlement and the same ₹7 crore theft, and she did not appear when summoned to explain it (para 15).

The charge#

A single clause, First Schedule, which is why the Board of Discipline heard the matter rather than the Disciplinary Committee.²

• Item (2) of Part IV — conduct that brings disrepute to the profession, whether or not it happens in the course of professional work.³

The complaint, as filed, ran to seven allegations — non-response to Income Tax notices, unfiled company compliances, a fabricated audit-appointment letter, unrelated cheating allegations reported in the press, and complaints that the auditor had absconded. Five were dismissed at the screening stage, and only the receipt of the stolen money and the settlement cheque went to a full hearing.⁴ The Board found neither made out and held the charge not guilty.

What the respondent said#

On the money, his account turned on timing and form. Police records put the transfer to him more than two weeks after the alleged theft, not on the same day as the complaint claimed, and the money reached him by bank transfer rather than cash — consistent, he said, with a legitimate payment rather than a cut of stolen funds (para 5). He also produced the trust's own financial statements for the relevant period, prepared by another chartered accountant and signed by the complainant herself, which said nothing about any theft of cash at all (para 6).

On the cheque, he said the complaint did not add up on its own terms. It was lodged only two days after the cheque was handed over, leaving no real window for the pleading and delay the complainant described, and a complainant with her political experience was unlikely to have acted against her own interest by sitting on it (para 7). The confession she described, he added, was denied by her own aide when the Enforcement Directorate asked him about it directly, and the cheque itself was never presented for payment (paras 8, 20).

He also put the complaint in a wider context. Numerous FIRs against him in Aurangabad and Risod had been closed by the police or stayed and quashed by the Bombay High Court's Nagpur and Aurangabad benches as lacking merit; the trust itself had been dissolved at the complainant's own request before any of this reached the police; and the Enforcement Directorate's own investigation, he said, had found the alleged ₹7 crore theft to be false and pointed instead at the complainant and her aide (paras 10–13, 15). Every payment he had ever received, he said, came by cheque or bank transfer, never cash, and the High Court had itself recorded nothing to suggest he was a conspirator (para 16).

What the Board held#

The Board went first to the burden of proof, and found the complainant had not carried it:

The Board observed that considering the evidence, arguments and submissions presented by the Respondent, it is evident that the Complainant has failed to discharge her burden of proving the allegations against the Respondent. The charge, specifically relating to Rs. 1.3 crore fraudulently received by the Respondent, remain unsubstantiated due to the lack of concrete evidence and inconsistencies in the Complainant's claim (para 18)

On the ₹1.3 crore transfer, the Board accepted the auditor's account of it over the complainant's:

it is on record that Rs. 1.3 crore was transferred to the Respondent's account by Mr. Ashok Gondole. The Respondent has provided a plausible explanation, supported by documents that the said amount was a legitimate payment for prior dues owed to him, spanning several years of professional engagement. The Complainant has not demonstrated any credible evidence to establish that the amount in question was stolen or that the transaction was fraudulent (para 19)

On the cheque, the decisive fact was one the complainant could not get around — it had never been cashed:

the allegation regarding a cheque of Rs. 3.7 crore issued by the Respondent to the Complainant has been rendered baseless. Respondent submitted that the cheque number 000008 dated 31.10.2019 for Rs. 3.70 Crores of the DCB Bank was never encashed as the Respondent has submitted Bank statement of DCB Bank Saving Account Number 03210200001304 from 2013 till 9th June 2020 confirming this fact on an affidavit. Thus, without evidence to show that the cheque was used in any fraudulent manner this charge does not hold merit (para 20)

The Board's final reasoning went behind both charges to the theft they both assumed. No investigation anywhere — not the police, not the Enforcement Directorate, not any court — had ever found that the ₹7 crore had actually been stolen:

till date, no judicial or quasi-judicial authority came out with the observation that there was a theft or robbery of Rs. 7 Crores as alleged by the Complainant. Therefore, in absence of such an observation or without any concrete evidence, no one can be held responsible for any act or as a part of the alleged fraud, if any (para 22)

The order#

Thus, in conclusion in the considered opinion of the Board the Respondent is Not Guilty of Other Misconduct falling within the meaning of Item (2) of Part IV of First Schedule to the Chartered Accountants Act, 1949 read with Section 22 of the said Act. Accordingly, the Board passed an Order for closure of the case in terms of the provisions of Rule 15 (2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

No punishment stage follows a not-guilty finding. The Board ordered the case closed under Rule 15(2) and disposed of it.⁵ The matter had been listed for hearing five times over nearly two years before it was heard and concluded at the sixth; findings followed within a week.⁶

Why it matters#

This section is ours, not the Board's.

A same-day transfer needs an actual same day. The complaint's theory rested on money moving on the day of the alleged theft; police records put it more than two weeks later. Get the bank-dated proof before you allege timing, not after.

An uncashed cheque is not a confession. The Board treated the cheque as meaningless once it was shown never to have been presented for payment (para 20). If you sign a cheque under pressure, keep the bank statement that proves it was never used against you.

A theft has to be proved before anyone can be blamed for sharing in it. No authority anywhere had ever found that the ₹7 crore was actually stolen. If a client accuses you of profiting from someone else's wrongdoing, ask what has actually been proved about the wrongdoing itself.

Payments that trace to cheque and bank transfer are their own defence. The auditor's record of receiving money only through traceable channels, never cash, did real work here (para 16). Route every payment you receive, however routine, through a channel you can later produce.

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