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BOD 724/2024Reprimand

A firm's partner moonlighted, defamed the firm by email, and secretly recorded a colleague. All three were admitted.

5 min readJainam Shah

A partner at a Mumbai accountancy firm moonlighted, emailed the firm's clients false claims against it, and secretly recorded another partner. He admitted every charge and was reprimanded.

Held
ReprimandGuilty of professional misconduct
Forum
Board of Discipline (First Schedule)
Clauses
Item (2) of Part IV of the First Schedule
Decided
punished
File no.
PR/88/2021-DD/125/2021-BOD/724/2024
Source
Original order (PDF)

Two partners at a Mumbai chartered accountancy firm had worked together through a forensic bank audit that pulled both of them into a CBI investigation. The partnership did not survive it, and the managing partner accused the other of turning against the firm from the inside.1

What happened#

A managing partner runs a Mumbai chartered accountancy firm with two other partners. The firm carries out a forensic audit of several companies borrowing from a public-sector bank, and the bank goes on to declare two of those borrowers fraudulent and file a criminal complaint naming the firm as a witness.
Investigators recording statements from all three partners strains the relationship inside the firm. One of the other partners, while still a partner, starts taking on assignments in his own name and banking the fees personally, bypassing the firm.
The same partner emails the firm's own clients accusing it of billing them for expenses it never incurred, and separately records a phone call with the managing partner without telling him, then passes the recording to the third partner.
The partner resigns. Before he does, he is accused of walking off with original audit reports the firm needed and of leaving money he owed it unpaid — allegations a screening review does not carry forward.
With those two allegations dropped, the Board puts the remaining three to the partner directly at the hearing. He admits every one of them without contest, and the Board reprimands him.

There was little to establish beyond the admission itself. Asked at the outset of the hearing whether he accepted the charges the Director (Discipline) had found him prima facie guilty of, the partner did not contest a single one of them.

The screened-out allegations — the missing audit reports, the unrefunded money — never came back. When the managing partner pressed the Board to reopen them, it declined: once a Director's report has been accepted, the Act gives the Board no route to review it again (para 6).

The charge#

Item (2) of Part IV of the First Schedule is the clause the Institute reaches for when conduct has nothing to do with how a member serves a client, and everything to do with how a member behaves.2 It is why three unrelated wrongs — working outside the firm in breach of the partnership deed, emailing clients false claims about it, and secretly recording a partner — could be folded into one finding rather than three separate ones.

The Board found the partner guilty on all three and reprimanded him.

What the respondent said#

The written record holds no contest, only an acknowledgment. Questioned by the Board, he "openly acknowledged the factual basis of the charges and accepted responsibility for his professional lapses" (para 5).

What the Board held#

Faced with an unqualified admission, the Board found nothing left to inquire into:

the Respondent has explicitly admitted his guilt on the three charges framed against him, as substantiated in the Prima Facie Opinion of the Director (Discipline)... The Board, therefore, finds no necessity for further inquiry into the admitted allegations (para 5)

On the two allegations the Director had already cleared, the Board was equally clear that its own earlier acceptance of that finding closed the door: "the Board's power to accept or reject the report has already been exercised, and no further review is permissible" under the Act or the Rules (para 6).

The order#

the Board decided to Reprimand him.

A reprimand is the lightest punishment the Board can impose.3 No suspension, no fine.4

Why it matters#

This section is ours, not the Board's.

An admission ends the inquiry, not the punishment. Conceding the charge closes off any argument about the facts, but it does not by itself soften what follows — the reprimand here was on the same scale as contested cases decided the same day. Weigh an admission on its own merits, not as a bargaining chip.

A screened-out allegation is not coming back. Once the Director (Discipline) clears a charge and the Board accepts that, there is no second attempt at it — not even at the punishment stage of a different, proven charge. Make your strongest case at the investigation stage; there is no later one.

Moonlighting is a disciplinary matter, not just a partnership dispute. Breaching a partnership deed's full-time clause reads like an internal, contractual wrong, but the Institute reached it under a misconduct clause built for exactly this — conduct with nothing to do with any client. Assume your partnership terms are enforceable outside the firm too.

What you send from outside the office is still evidence. An email to a client and a recorded phone call, both made outside any client engagement, were enough on their own to found two of the three charges. Treat every message about the firm as one you may have to answer for.

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

Footnotes#

  1. CA. Jaleshwar Singh (M. No. 042023), the managing partner, was the complainant. CA. Jayesh Vasantlal Shah (M. No. 041495) was the respondent, a partner in the same Mumbai firm, M/s J Singh & Associates. A third partner, Mr. V. Kandaswamy, is named in the findings as also having been questioned by the CBI but was not a party to this complaint. The forensic audit concerned Canara Bank and its borrowers M/s SRS Real Estate Limited and M/s SRS Real Infrastructure Limited, none of which are chartered accountants. ↩

  2. Item (2) of Part IV of the First Schedule to the Chartered Accountants Act, 1949 deems a member — in practice or not — guilty of other misconduct if, in the opinion of the Council, his conduct brings disrepute to the profession or the Institute, whether or not it is connected with his professional work. ↩

  3. Section 21A(3) gives the Board a graduated set of punishments, of which a reprimand is the lowest, ahead of removal of the name from the Register for a limited period and a fine. ↩

  4. Hearings were held on 26 June 2024 (part heard, adjourned) and 18 January 2025 (heard and concluded), with Shri C. N. Vaze appearing as counsel for the respondent. Findings were signed 25 January 2025. Punishment, on a Board of the same three members, was passed on 29 July 2025 after the respondent appeared by video conference. ↩

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

More orders

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BOD 768/2024Not guiltyItem (8) Part I

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An incoming auditor took over a client's VAT and tax audits. Nobody proved the complainant had ever held the VAT work, an old email settled the tax audit, and both charges failed.

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A chartered accountant on a cooperative's board was accused of misusing a ₹50 lakh government grant. He repaid the shortfall before the ruling, and the Board found no evidence of personal misuse.