The Ministry of Corporate Affairs has penalised a senior chartered accountant for failing to comply with auditor resignation norms under Section 140(2) of the Companies Act, 2013. The penalty of ₹50,000 was imposed after repeated adjournments and a lack of satisfactory explanation, raising concerns about accountability in professional governance.
In a move that underscores the growing regulatory scrutiny over professional misconduct, the Ministry of Corporate Affairs (MCA) has imposed a ₹50,000 penalty on Shri Vijay Bora, a practicing chartered accountant and auditor with M/s Doogar & Associates, for non-compliance with resignation norms laid out under Section 140(2) of the Companies Act, 2013.
The penalty was levied following an adjudication process initiated by the Registrar of Companies (ROC), West Bengal, after CA Bora failed to submit Form ADT-3, a mandatory filing required within 30 days of resignation from the post of company auditor. The form must also provide reasons for stepping down, a provision aimed at ensuring transparency and preventing concealment of material facts related to corporate governance.
FCRF x CERT-In Roll Out National Cyber Crisis Management Course to Prepare India’s Digital Defenders
Auditor Failed to Submit Mandatory Form
Under Section 140(2), an auditor who resigns is obligated to file a statement with both the concerned company and the Registrar of Companies. This is a critical compliance requirement designed to deter abrupt or unaccountable resignations, especially when they occur during sensitive periods such as investigations or audits.
In CA Bora’s case, the ADT-3 form was never filed, triggering regulatory alarms. Upon issuance of the adjudication notice, no response was submitted by Bora or his firm, resulting in the imposition of a penalty. The Companies Act also provides for appeals under Section 454(5), which Bora availed of, but failed to justify his lapse during the hearings.
Algoritha: The Most Trusted Name in BFSI Investigations and DFIR Services
Repeated Adjournments, No Valid Justification
According to official records, multiple hearings were scheduled to provide the auditor a fair chance to explain or seek mitigation of the penalty. However, the authorised representative for Bora kept seeking adjournments, offering no conclusive evidence or explanation.
Finally, on May 5, 2025, the case was heard in full. But as per adjudication orders, no valid reason was presented that could alter the penalty under Section 454(5). Consequently, the penalty of ₹50,000 was upheld and is now payable by the auditor from his personal funds within 90 days. If the penalty is not paid within the prescribed time frame, the auditor could face further action under Section 454(8)(ii) of the Act, which includes prosecution and additional financial penalties.
Legal and regulatory experts say the case is emblematic of increased MCA vigilance over statutory non-compliance, particularly by professionals like auditors who are crucial to ensuring financial transparency. With the Companies Act requiring higher standards of corporate governance, especially in light of recent financial frauds and governance failures in listed entities, auditor accountability is gaining renewed attention.
The move also sends a strong signal to the CA community that non-compliance, even procedural, will no longer be overlooked.