---
title: A trust's auditor was accused of pocketing a share of its stolen ₹7 crore. The alleged theft was never proven.
description: A Member of Parliament's trust accused its auditor of sharing in a stolen ₹7 crore and confessing to fraud with a ₹3.70 crore cheque. The Board found the alleged theft was never proven at all.
case_number: BOD 692/2023
file_number: PR/177/2020/DD/227/2020/BOD/692/2023
forum: board-of-discipline
institute: icai
decided_on: 2025-02-10
outcome: Not guilty
clauses: Item (2) of Part IV of the First Schedule
order_pdf: https://disc.icai.org/wp-content/uploads/2025/02/41.-BOD-692-2023.pdf
published: 2026-09-09
author: Jainam Shah
keywords: bod 692 2023, other misconduct, item 2 part iv first schedule, section 22 chartered accountants act, trust fund misappropriation allegation, theft not established, board of discipline not guilty, rule 15(2) closure
source: /icai/board-of-discipline/bod-692-2023
---

# 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.[^parties]

## What happened

```timeline
A Member of Parliament, busy with public duties, leaves the running of her family trust to a
secretary appointed under a power of attorney with full authority to act on her behalf. The
secretary in turn appoints a chartered accountant as the trust's auditor, and later as auditor
for a group of companies the trust controls.

A large sum of cash allegedly goes missing from the trust, and the secretary is accused of
taking it and depositing it into an account of his own at a cooperative bank. Weeks after that,
according to police records, a substantial sum moves from the secretary's account into the
auditor's account.

The auditor is separately accused of misappropriating money from the trust on his own account.
Confronted, he is said to have confessed and handed over a cheque for several crores of rupees
as a partial settlement, promising to repay the rest.

Multiple police cases, an Enforcement Directorate investigation and cross-litigation follow,
spanning the trust's own dissolution, its conversion into a company, and years of proceedings
between the parties before several forums. The auditor says he is the one being persecuted, not
the wrongdoer.

Over six hearings across nearly two years, the Board of Discipline examines the money trail, the
cheque and the surrounding investigations. It closes the case, finding neither the theft nor the
auditor's part in it established.
```

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.[^forum]

- **Item (2) of Part IV** — conduct that brings disrepute to the profession, whether or not it
  happens in the course of professional work.[^item2]

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.[^screening] 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.[^rule] 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.[^coram]

## 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.

[^parties]: The complainant, *Ms. Bhavana Pundlikrao Gawali*, a Member of Parliament of Risod,
    Washim district, held a trust — *Mahila Utkarsh Pratishtha* — which was later converted into
    a Section 8 company. She left its day-to-day affairs to a secretary appointed under power of
    attorney, *Mr. Ashok Narayan Gandole*, who is not a party to this case but is central to the
    facts alleged. The respondent is *CA. Upendra Gunwantrao Muley (M. No. 101398)* of *M/s
    Upendra Muley & Co.*, Aurangabad, appointed by the secretary as auditor of the trust and its
    group of companies.

[^screening]: The complaint as filed ran to seven allegations: non-response to Income Tax notices
    sent to the trust (Allegation 1); unfiled statutory compliances for the trust's group of
    companies (Allegation 2); a fabricated audit-appointment letter for assessment year 2019-20
    (Allegation 4); unrelated allegations of cheating reported in newspapers (Allegation 5); and
    complaints that the respondent had absconded (Allegation 7). The Director (Discipline) held
    the respondent not guilty on all five at the prima facie stage, and the Board concurred,
    limiting the hearing to Allegation 3 (the ₹1.3 crore transfer) and Allegation 6 (the
    settlement cheque) (para 3).

[^item2]: Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949, read
    with Section 22 of the Act, covers "other misconduct" — conduct that discredits the
    profession but is not captured by the more specific items listed elsewhere in the Schedule.

[^forum]: First Schedule matters go to the Board of Discipline; Second Schedule matters, and
    matters falling under both, go to the Disciplinary Committee. The two carry very different
    punishment ceilings.

[^rule]: Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and
    Other Misconduct and Conduct of Cases) Rules, 2007 governs closure where a charge is not
    proved. Rule 15(1), by contrast, governs a finding of guilt, after which punishment is passed
    separately under Section 21A(3).

[^coram]: CA. Rajendra Kumar P (Presiding Officer) and Ms. Dolly Chakrabarty (Government Nominee)
    sat through video conference; no third member is recorded on the findings. The matter was
    listed six times: oath was taken and the hearing adjourned on 22 May 2023, then further
    adjourned on 17 August 2023, 21 November 2023 and 26 June 2024, part-heard on 18 January
    2025, and heard and concluded on 4 February 2025 at ICAI Bhawan, New Delhi. Findings were
    signed on 10 February 2025.