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CLB fines Amarchand Delhi for negligent affidavits; Firm sacks two associates

Amarchand Delhi office: Should not happen
Amarchand Delhi office: Should not happen
Exclusive: Amarchand Mangaldas was fined Rs 50,000 by the Company Law Board (CLB) in Delhi on Friday and the firm today dismissed two associates for the allegedly negligent advice.

The CLB in its order of 17 August rebuked the firm for the negligent advice given in relation to two affidavits filed before the CLB in a petition by the firm’s client Rupak Gupta against Banaras House Pvt Ltd, explained Delhi managing partner Shardul Shroff.

The affidavits contained serious errors according to the order, said Shroff, and were prepared without partner approval by one principal associate designate and one three-year-qualified associate, who was mentioned by name in the order.

As soon as the partner in charge of the client, Ritu Bhalla, found out about the error on 6 August, she filed a rectification affidavit with the CLB, noted Shroff, which resulted in the CLB bench passing the order on 17 August. Bhalla was not reachable for comment at the time of going to press.

“We have not taken this at all lightly,” Shroff said, admitting that “this should never have happened”.

The two associates had “filed affidavits quite recklessly without showing the supervising partner and made one mistake after the other after the other”, he noted. “They should have just brought it to the notice of the partner… It is a failing of their standards, that’s why they got dismissed.”

“We don’t brook this as acceptable behaviour internally. The action at our end is to ensure that proper procedure [is put in place…] and we need to tighten up procedures so that nobody can do it.”

The firm was continuing to examine the order, which Shroff only became aware of at 3pm today, and is further investigating the circumstances surrounding the events.

The two associates were not reachable for comment at the time of going to press.

The Economic Times reported this evening that the finance ministry has asked state-owned banks and insurers to take up issues of advocates’ and chartered accountants’ misconduct with regulating bodies, such as the Bar Council of India (BCI) or the Institute for Chartered Accountants of India (ICAI), rather than merely striking the advisers from their panel.

Update: Shardul Shroff has released a longer statement explaining the events surrounding the affidavits and the firm’s position. Click here to read.

Clarification: The initial version of the story stated in an indirect quote that Ms Bhalla was the partner “nominally” in charge of the client, which was paraphrasing the statements made but was not a direct quote.

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