He made his own staff partners. They set up a rival firm without resigning.

A Dehradun chartered accountant spent thirty years building his firm, and he built it out of his own people.¹ Then they registered a firm of their own, and his clients began moving to it.²

What happened#

Two moments in that sequence decided the case.

The first was a letter. Two clients — a cooperative sugar federation and its provident fund trust — later wrote about a letter they had received. It told them about the new firm and asked them to appoint it. Neither side ever produced that letter. All the Board had was the clients writing about it.

The second was a set of papers that looked entirely in order. Each time an audit moved across, the new firm asked the old firm for a no-objection certificate, exactly as it should have.³ Each one came back signed. The partner who signed them was, at that time, a partner in both firms (para 23).

Nine clients feature in the findings — two in the first matter, seven in the second. The complaint had named more.⁴

The two clauses#

Both sit in the First Schedule to the Chartered Accountants Act, 1949, which is why the Board of Discipline heard the case rather than the Disciplinary Committee.⁵

• Item (6) of Part I — soliciting professional work. Not only advertising: any approach, direct or indirect, that amounts to asking a client for the engagement.⁶
• Item (8) of Part I — taking on an audit that another chartered accountant already holds, without writing to them first. The writing is the whole duty. It exists so that an auditor cannot be replaced without ever hearing of it.⁷

Neither clause concerns the quality of the audit. Both concern how work changes hands. The Board found him guilty under both and reprimanded him.

The rest of the complaint never got that far. The ₹55 lakh the founder said had been taken from the firm, the tampering with its income-tax e-filing portal, a resignation letter he said had been forged, a meeting held in his office while he was away to persuade his staff to leave — all of it was dropped at the screening stage, before anybody argued it (para 8).

What the respondent said#

He answered both charges.

On the letter, his case was that nobody had read it before calling it solicitation. When it was finally placed before the Board, it turned out to be a reply: the client had written first, asking what had happened to the firm, and the letter answered the question. It stated a fact and asked for nothing. The clients had also said so themselves, in writing — that they were not solicited, and had shifted because they chose to. The only pressure on anyone, he argued, came from the founder's own legal notice to those clients (para 18).

On the certificates, he argued there had been no real change of auditor to write about. The same chartered accountant had done this audit work before the new firm existed and continued afterwards. A certificate had been taken in any case. To call it worthless merely because a shared partner signed it was guesswork, particularly as the founder had no involvement in these audits (para 19).

What the Board held#

On the first charge, the Board never needed to see the letter. Two clients with no stake in the quarrel had written about receiving it, and that was enough to treat it as having existed and to know roughly what it asked for. From there the burden of proof changed hands: it was no longer for the founder to prove the letter had solicited work, but for the new firm to produce the correspondence and show that it had not. The firm did not produce it (para 22), and the Board held:

the Respondent(s), being partners of the Respondent Firm during the relevant period, cannot be exonerated and are held Guilty of Professional Misconduct under Item (6) of Part I of the First Schedule (para 22)

Note who that catches. What made him guilty was being a partner of the firm that gained, not writing the letter. Nobody ever established who wrote it.

On the second charge, the Board's objection was never that the certificates were missing, but that the wrong person had signed them:

such acknowledgment of NOC by a common partner, who was simultaneously a beneficiary of the transfer of professional work to the Respondent Firm, cannot be treated as an independent and bona fide compliance of the requirement of prior communication (para 24)

It then set out what Item (8) is for — keeping the change in the open, and preventing an auditor from being displaced unfairly — and held that seeking a certificate and granting it within the same group of people who stood to gain "defeats the very spirit and purpose of the provision" (para 25). That the firm returned for fresh certificates in later years, for some of the same clients, told against it further (para 24).

The order#

the Board decided to REPRIMAND him.

A reprimand is the lightest punishment the Board can impose.⁸ No suspension, no fine. One Board decided guilt, for all three partners together;⁹ a differently constituted Board set the punishment months later, after hearing him in person.¹⁰ By then the complaint had been with the Institute for close to three years.¹¹

Why it matters#

This section is ours, not the Board's.

You can be held guilty over a letter nobody can produce. The clients mentioned it in their own correspondence, and that alone was enough for the Board to accept that it existed. The firm was then the one required to produce it and show it had been harmless — and could not. So keep a copy of what your firm sends out. The day a client refers to a letter of yours, you are the one who will be asked to produce it, and being unable to is what decided this charge.

A no-objection certificate is only as good as the person who signs it. These were on file, on letterhead, properly signed, and they still failed. So if you are a partner in both the firm giving up the work and the firm taking it on, do not sign the certificate yourself. It has to come from someone at the outgoing firm with nothing to gain from the transfer.

A client confirming they were not solicited does not end the matter. These clients put it in writing that nobody had approached them and that they had moved to the new firm of their own accord. The Board found solicitation anyway, because Item (6) asks whether the member made an approach — not whether the client minded, or how the client described it later.

The gravest allegations are usually not the ones decided. ₹55 lakh and the tampering with the e-filing portal were both in this complaint. Neither reached a hearing. Recovering money is for a civil court and tampering is for the police; a disciplinary Board is neither. What remained were two questions of professional etiquette, and a reprimand.

A partner answers for what the firm sends, not only for what he sends. Nothing here turned on what this respondent personally wrote or signed — nobody ever established who wrote the letter. He was a partner in the firm that gained, in the months that mattered, and that was enough to convict him. Joining a firm means taking on responsibility for its outgoing correspondence, including letters you never saw.

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