The Institute of Chartered Accountants of India (ICAI) has formally removed a Chartered Accountant (CA) from its Register of Members for a period of one year, pursuant to an order passed by the Delhi High Court.
The disciplinary action was notified through a Gazette of India publication dated February 4, 2026, and released on February 11, 2026. The notification implements the Delhi High Court’s judgment dated December 23, 2025, delivered in CHAT.A.REF 2/2018 under Section 21(6)(c) of the Chartered Accountants Act, 1949.
The High Court held Chartered Accountant Kishan Gupta guilty of “other misconduct” under Section 22 read with Section 21 of the Act and directed that his name be removed from the ICAI Register of Members for one year.
Regulatory Background: SEBI Findings in BFSL Public Issue
The matter originates from regulatory proceedings initiated by the Securities and Exchange Board of India (SEBI) in connection with the public issue of Bharthari Financial Services Ltd. (BFSL).
In an order dated December 12, 2002, passed under Section 11B of the SEBI Act, 1992 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations (PFUTP Regulations), SEBI recorded serious irregularities in the public issue process. The findings included:
- Irregular subscription and allotment of shares
- Use of ante-dated stock invests issued by banks
- Financial transactions involving substantial sums
- Submission of incorrect information concerning encashment of stock invests
SEBI’s communication was subsequently treated by ICAI as “information” indicating possible “other misconduct” by the concerned Chartered Accountant, who was serving as Chairman and Whole-time Director of BFSL at the relevant time.
ICAI Disciplinary Proceedings
Upon receipt of SEBI’s findings, ICAI initiated disciplinary proceedings under the Chartered Accountants Act, 1949 and the relevant regulations.
Despite multiple notices seeking explanation, the respondent did not provide satisfactory clarifications. Consequently, ICAI formed a prima facie opinion of misconduct and referred the case to its Disciplinary Committee.
Following hearings and examination of the material on record, the Disciplinary Committee concluded that the respondent had:
- Connived with another Chartered Accountant, Ashok Chawla, in arranging finance for the public issue
- Facilitated the issuance of ante-dated stock invests after the closure of the public issue
- Enabled irregular allotment of shares
- Accepted applications that had been withdrawn
- Permitted issuance of share certificates without valid underlying funds
The Committee held that, in his capacity as Chairman and Whole-time Director, the respondent bore direct responsibility for the irregularities. It found that his conduct amounted to “other misconduct” within the meaning of Sections 21 and 22 of the Chartered Accountants Act.
Although the respondent later denied the allegations through a written representation, the ICAI Council accepted the findings of the Disciplinary Committee and referred the matter to the Delhi High Court with a recommendation that his name be removed from the Register of Members for one year.
Delhi High Court’s Observations on Professional Integrity
While adjudicating the reference, the Delhi High Court underscored the heightened ethical obligations of Chartered Accountants.
The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar observed that Chartered Accountants must maintain the highest standards of ethics and integrity, not merely in relation to their clients but also in safeguarding the probity and credibility of financial markets.
The Court emphasised that Chartered Accountants are not merely professionals engaged by clients but act as custodians of financial discipline and market integrity upon which the broader economy depends.
Invoking its powers under Section 21(6) of the Chartered Accountants Act, 1949, the Court ordered suspension of the respondent from ICAI membership for one year. During this period, he has been restrained from rendering any services as a Chartered Accountant as recognised under Section 21(5) of the Act.
