Ca R Shanmuggam vs The Secretary The Institute Of Chartered Accountants Of India & Ors.

$~74
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of Decision: October 27 , 2026
# CNR No. DLHC010510972026
+ W.P.(C) 15683/2026 & CM APPL. 73461/2026, CM APPL.
73462/2026
CA R SHANMUGGAM .....Petitioner
Through: Mr. Anoop Prakash Awasthi,
Mr. Shubham Dubey, Ms
Jasleen Kaur, Advs. through
V.C.
versus
THE SECRETARY THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA & ORS. .....Respondents
Through: Mr. Vibhooti Malhotra, Mr.
Bhuvnesh Satija, Mr. Aniket
Khanduri, Advs.
CORAM:
HON'BLE MR. JUSTICE AMIT MAHAJAN
AMIT MAHAJAN, J. (Oral)
1. The present writ petition has been filed under Article 226 of
the Constitution of India assailing the Order dated 03.06.2026 passed
by the Appellate Authority of the Institute of Chartered Accountants
of India (‘ ICAI ’), whereby the petitioner’s appeal was dismissed and
the findings of misconduct recorded by the Disciplinary Committee
vide order dated 03.02.2021, along with the punishment of reprimand
along with fine of Rs. 25,000/- imposed vide order dated 31.03.2021,
were affirmed.
2. It is borne from the record that the petitioner was appointed as a
Signature Not Verified
W.P.(C) 15683/2026 Page 1 of 5
Signed By:SANJAY
KUMAR
Signing Date:29.10.2026
16:53:40

Concurrent Auditor of the Anthiyur Branch of Karur Vysya Bank with
effect from 01.07.2018 till 30.06.2019.
3. A complaint was filed by Chief of Internal Vigilance, Karur
Vysya Bank, before the Disciplinary Directorate of the ICAI, alleging
that the Petitioner had failed to report certain unauthorised
transactions during the audit period. Although the Petitioner had
submitted digitally authenticated concurrent audit reports for July to
October 2018, an internal investigation allegedly revealed that the
Branch had undertaken unauthorised transactions without supporting
cheques, resulting in a loss of ₹1,016.58 lakhs to the Bank. The
Petitioner was specifically alleged to have failed to report four
transactions undertaken on 18.09.2018, 25.09.2018, 03.10.2018 and
31.10.2018, which allegedly lacked the requisite supporting cheque
and RTGS challan.
4. The Complaint was considered by the Director (Discipline).
After affording due opportunity to the Petitioner to defend, the
Petitioner was held prima facie guilty vide opinion dated 22.07.2020,
of misconduct falling within Clause 7 of Part I of Second Schedule to
the Chartered Accountants Act, 1949.
5. This opinion was placed before the Disciplinary Committee,
which, after examining the material placed forth, held the Petitioner
guilty of professional misconduct vide Order dated 03.02.2021. The
relevant observations are reproduced hereinbelow: -
“8. The Committee perused the alleged “Daily Concurrent
Checking Report” of the various periods as submitted by
the Respondent alongwith his letters dated 9th January
2019 and RBI Circular. It was noted from the ‘Daily
Concurrent Checking Report’ as submitted by the
Respondent to the Bank on daily basis that in the said
reports dated 18.9.2018, 25.9.2018, 3.10.2018 and
31.10.218, no details for the missing cheque were
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W.P.(C) 15683/2026 Page 2 of 5
Signed By:SANJAY
KUMAR
Signing Date:29.10.2026
16:53:40

reported. The said reports appeared to have been signed
by the team of Respondent and countersigned by the
Branch manager. Further, it was viewed that in case if the
Respondent had failed to carry audit as per the scope of
his audit assignment due to non-cooperation of the Bank
officials or non-availability of the terminal at Bank then
he had failed to produce a single piece of evidence
wherein he had communicated with respect of such
limitations to either the Branch Officials or at the Head
Office.
9. The Committee noted that, as per scope of work dated
07.06.2018, it was the duty of the auditor to bring to the
notice of the RBI, any ‘instances of fraud or fraudulent
activities where the amount involved Is Rs.100 lakhs or
above should be reported to Reserve Bank of India,
Department of Banking Supervisions, Central Office,
Mumbai and all other instances to Regional Office of the
Reserve Bank of India as stipulated in Para 4 of
DBS.ARS NO. B.C4/08.91.00/2004-2005 dated August
27, 2004 .
10. From the above, it was viewed that the Respondent
was required to report the fraud and fraudulent activities
of Rs. 100 lakhs and above to RBI, Mumbai and all other
instances at Regional Office of RBIL Hence, report to RBI
was not restricted to reporting any specific nature or
value of transactions . Hence, in the circumstances, as
being explained by the Respondent he was bound to
report to the RBL. ”
6. Thus, vide punishment Order dated 31.03.2021, imposed a
punishment of Reprimand with fine of Rs. 25,000/-.
7. Aggrieved, the Petitioner approached the Appellate Authority,
which, after addressing all the contentions raised by the Petitioner,
affirmed the above Orders, by noting that though the Petitioner had
verified the vouchers, still not reported the missing cheques. He also
did not report the suspisious transactions noticed during the period of
his concurrent audit in the month of September 2018 – October 2018
as required by the scope of his Audit. Accordingly, since he was held
guilty of gross negligence in conducting his duties as a concurrent
auditor, it was held that there was no infirmity in the punishment order
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Signed By:SANJAY
KUMAR
Signing Date:29.10.2026
16:53:40

imposing punishment of reprimand with Rs. 25,000/-.
8. It is evident from the record that the Disciplinary Committee
and the Appellate Authority have concurrently returned findings
against the petitioner on the question of his failure to discharge the
obligations attached to his assignment as a concurrent auditor.
9. The petitioner’s appointment carried with it the obligation to
undertake the prescribed verification and report material irregularities
in accordance with the applicable requirements. The authorities, while
returning concurrent findings, have examined the scope of the
petitioner’s assignment, the relevant audit reports and the explanation
offered by him, and concluded that the subsequent communications
relied upon by the petitioner did not adequately establish that the
specific irregularities had been reported in a timely manner during the
relevant audit period. Thus, the petitioner’s reliance upon the
communications dated 09.01.2019 and 14.01.2019 subsequently
addressed to RBI, does not, by itself, displace the finding that the
irregularities in question were not duly reported in the relevant audit
reports for September and October 2018.
10. Though the petitioner’s principal defence is that the alleged
fraud had occurred before his date of assuming charge, he had
subsequently brought the irregularities to the notice of RBI and overall
loss allegedly suffered by the Bank has not been correctly assessed,
these aspects have already been addressed in detail by both the
authorities, and arguments essentially invite this Court to undertake a
fresh examination and reassessment of the factual material considered
by the disciplinary authorities. Such an exercise is not warranted in the
present proceedings, particularly when the impugned findings rest
upon the petitioner’s failure to report the relevant irregularities in the
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W.P.(C) 15683/2026 Page 4 of 5
Signed By:SANJAY
KUMAR
Signing Date:29.10.2026
16:53:40

course of his audit.
11. The jurisdiction of this Court under Article 226 of the
Constitution is not that of an appellate authority over disciplinary
findings. Interference may be warranted where the decision-making
process suffers from a recognised legal infirmity, or where the
findings are shown to be perverse or otherwise unsustainable in law.
However, the mere availability of another possible view of the
evidence, or the petitioner’s disagreement with the conclusions drawn
by the authorities, would not justify the exercise of writ jurisdiction to
reappreciate the material and substitute a different factual conclusion.
12. Insofar as, the challenge to the quantum of punishment is
concerned, the same also does not merit acceptance. The failure to
flag the transactions in question in the relevant audit reports was
considered by the disciplinary authorities to constitute gross
negligence in the discharge of that responsibility. In these
circumstances, the punishment of reprimand coupled with a fine of
₹25,000/- cannot be said to be so disproportionate as to warrant
interference by this Court in the exercise of its writ jurisdiction.
13. For the foregoing reasons, this Court finds no ground to
interfere with the order dated 03.06.2026 passed by the Appellate
Authority of the ICAI, or with the disciplinary orders dated
03.02.2021 and 31.03.2021.
14. The writ petition is, accordingly, dismissed. Pending
applications, if any, stand disposed of.
AMIT MAHAJAN, J
OCTOBER 27, 2026
“SK”
Signature Not Verified
W.P.(C) 15683/2026 Page 5 of 5
Signed By:SANJAY
KUMAR
Signing Date:29.10.2026
16:53:40