* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment Reserved on: 04.12.2025

Judgment delivered on: 23.12.2025

Judgment uploaded on: As per Digital Signature~

+ CHAT.A.REF 2/2018

COUNCIL OF INSTITUTE OF CHARTERED ACCOUNTANTS

.....Petitioner

versus

SHRI KISHAN GUPTA AND ANR. .....Respondents

Advocates who appeared in this case

For the Petitioner : Mr. Deepin Deepak Sahni, Advocate.

For the Respondents : Mr. Vijendra Singh Mahndiyam, CGSC for

R2.

CORAM:

HON'BLE MR. JUSTICE V. KAMESWAR RAO

HON'BLE MR. JUSTICE VINOD KUMAR

JUDGMENT

V. KAMESWAR RAO, J.

1. This reference has been made by the Council of Institute of Chartered Accountants (“CICA”) seeking orders under Section 21(5) of the Chartered Accountants Act, 1949 (pre-amended) (“Act”) for removal of the name of respondent no. 1 namely Shri Kishan Gupta from the Register of Members

for a period of one year.

2. The Chairman of the Securities and Exchange Board of India (“SEBI”) vide order dated 12.12.2002 passed directions against the respondent no. 1 under Section 11B of the Securities and Exchange Board of India Act, 1992 read with Regulation of the SEBI (Prohibition of Fraudulent & Unfair Trade Practices relating to Securities Market) Regulations, 1995. As per the petitioner, the allegations made by the SEBI against respondent no. 1 are broadly as under:-

(a) The irregular allotment of 1,17,200 shares of Bharthari Financial Services Limited (“BFSL”) involving irregular subscription of 27,00,000 shares with an application money of Rs. 2.70 crores by way of stock invests issued by Sangli Bank, Karol Bagh, Delhi.

(b) The irregular allotment of 57,600 shares of BFSL involving irregular subscription of 14,40,000 shares with an application money of Rs. 1.44 crores by way of stock invests issued by State Bank of India, Ashram Road, Ahemdabad.

(c) The filing of incorrect information regarding encashment of stock invests.

3. The SEBI wrote a letter dated 10.06.1999 to the petitioner pointing out certain irregularities in the public issue of BFSL. The respondent no. 1 herein is a qualified Chartered Accountant and member of the Institute of Chartered Accountant of India (“ICAI”) and also the Chairman and whole- time Director of BFSL. The petitioner after perusing the letter as received from SEBI wherein irregularities in public issue of BFSL were pointed out, requested the respondent no. 1 to offer a clarification vide letters dated 02.02.2000 and 11.10.2000. However, no clarification received from the respondent no. 1 and the petitioner was constrained to treat the letter from SEBI as “information” against the respondent no. 1 for “other misconduct”

falling under Section 22 read with Section 21 of the Act.

4. Thereafter, the petitioner by way of an information letter dated 15.12.2005 reiterated the aforesaid position wherein the respondent no. 1 was charged for “other misconduct” falling under Section 22 read with Section 21 of the Act and directed the respondent no. 1 to submit his written statement in his defence as per Regulation 12(7) read with Regulation 13 of the Chartered Accountants Regulations, 1988 (“Regulations”). The petitioner after having considered the information letter dated 15.12.2005 noted that despite various reminders, respondent no. 1 did not submit his written reply and thus, non-submission of any clarification by the respondent no. 1 clearly demonstrates the admission of the charges. Thereafter, the petitioner in accordance with Regulation 12(11) of the Regulations passed a prima facie opinion that the respondent no. 1 was guilty of professional/other misconduct and further referred the case to the Disciplinary Committee constituted by the petitioner for an enquiry.

5. As per Mr. Deepin Deepak Sahni, learned counsel appearing on behalf of the petitioner, the respondent no. 1 along with his counsel was present before the Disciplinary Committee at the hearing held on 09.04.2013. The Disciplinary Committee after concluding the proceedings vide its report dated 10.02.2014 observed as under:-