The Gujarat High Court has dismissed the First Information Report (FIR) against a Chartered Accountant firm related to the GSLDC scam. The court noted that the firm’s involvement in the matter was limited to auditing vouchers and records and was not directly linked to the misconduct in the fieldwork of the Khet Talavadi project, which was the subject of the allegations.
A Single bench of Justice Sandeep N. Bhatt emphasized that if state authorities were to implicate professionals in such cases routinely, it would create administrative chaos and deter leading professionals from collaborating with the government or its offices.
The applicant, a Chartered Accountant running a firm in New Delhi, had a contractual agreement with the Gujarat Land Development Corporation for audit work. The FIR alleged misconduct in the Khet Talavadi project, claiming that Corporation officials acted improperly by submitting applications on behalf of farmers, manipulating records, and making unauthorized payments to contractors. These actions were allegedly carried out with the involvement of unqualified employees from the Chartered Accountant Firm Pipara & Company, potentially violating the Chartered Accountant Act.
The applicant’s counsel argued that the FIRs did not mention any fraud committed by the applicant and that the allegations centred solely on the appointment of an unqualified employee, which, in their view, constituted an offence under the Chartered Accountant Act. They contended that such complaints could potentially jeopardise professionals for the actions of their staff or officials.
The High Court observed that officers and staff of the Gujarat State Land Development Corporation had filed fraudulent applications to benefit from the ‘Khet Talavadi’ Scheme initiated by the State Government. Importantly, the court found no direct connection between the applicant, the Corporation’s officers/staff, or the contractors, and there were no financial transactions other than the firm’s fees involved. Additionally, provisions within the Chartered Accountant Act address the appointment of unqualified personnel for audit work. Based on these considerations, the court found no prima facie evidence of an offence by the applicant and consequently quashed and set aside the FIR against the CA firm.
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