Full Judgment Text
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PETITIONER:
DEVENDRA BHAI SHANKAR MEHTA
Vs.
RESPONDENT:
RAMESHCHANDRA VITHALDAS SHETH AND ANR.
DATE OF JUDGMENT22/04/1992
BENCH:
RAY, G.N. (J)
BENCH:
RAY, G.N. (J)
KASLIWAL, N.M. (J)
CITATION:
1992 AIR 1398 1992 SCR (2) 687
1992 SCC (3) 473 JT 1992 (3) 560
1992 SCALE (1)875
ACT:
Advocates Act, 1961:
Sections 35, 36, 36-B, 38-Advocate-Professional miscon-
duct-Allegations of defrauding and cheating aspirant loa-
nees-Proceedings before State Bar Council and Bar Council of
India-Findings of Disciplinary Committee that concerned
advocate and financier being parties to racket defrauded
aspirant loanee in receiving large sum of money or pretext
of legal expenses and other incidental costs for advancing
proposed loan-punishment-Removal of name of advocate from
Roll of State Bar Council-validity of.
Bar Council of India-Disciplinary Committee-Proceeding
against advocate-Findings based on facts-Standard of proof
required to establish.
HEADNOTE:
The appellant was an Advocate practising in Bombay.
Respondent No.1 (the complainant) made a complaint to the
Bar Council of Maharashtra alleging professional misconduct
against the appellant. His case was that he was a proprietor
of a firm engaged in a business of manufacturing. He was in
need of financial accommodation and a financier impressed
upon him that on examination of his papers by a solicitors’
firm run by the appellant, he would be given loan. He was
also told that the appellant was also one of the investors.
The complainant on such representation agreed to get loan
through the financier. On inspection of properties of the
complainant the financier told him that a loan upto Rs.7
lakh would be advanced to him provided he would pay at the
rate of 5-1/2% on the advance of amount of loan towards
legal and other expenses. In a meeting held at the residence
of the appellant in connection with the proposed loan the
appellant told the complainant that he was an advocate of a
certain firm and he worked only for the genuine financiers
and would look to the interests of the loan seekers. He also
told that he was himself a member of the internal group of
the financiers. The appellant induced the complainant to
part with certain money for legal expenses and in formed him
688
that out of 5-1/2% of the amount of loan required to be paid
by him by way of legal expenses the appellant would keep 3-
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1/2% for the stamp duty payable to the Government. He also
told that the disbursement could be expedited only if the
complainant paid cash to the financier before certain date.
On the stipulated date the complainant paid RS.25,000 to the
financier. He also paid the balance of Rs.13,500 to the
appellant. Thereafter the appellant made all attempts to
delay the disbursement and asked the complainant to pay
Rs.10,000 more which the latter paid. However, the proposed
loan was not disbursed and instead of it, the financier made
a complaint against the complainant in the Social Security
Branch.
The complainant made a complainant to the CID Branch of
Bombay Police against the financier and the appellant. The
financier was chargesheeted. On the advice of the police the
complainant made an application to the Maharashtra Bar
Council. He also alleged that the appellant had indulged in
fraudulent activities in respect of other persons and at-
tached a list of witnesses to the complaint. The appellant
challenged the proceedings before the High Court, but the
Write Petition was dismissed and the proceedings before the
State Bar Council continued.
The complaint before the State Bar Council could not be
disposed of within the statutory period and the case stood
transferred to the Disciplinary Committee of the Bar Council
of India. Meanwhile the financier died. The Disciplinary
Committee analysing the evidences dispassionately and
considering the affidavits filed on behalf of both the
parties as also the affidavits filed by some witnesses
alleging that they had also become the victim of fraudulent
action and cheating by the financier and the appellant, held
that there was a racket for defrauding and/or cheating to
aspirant loanees, and the financier and the appellant-
advocate were parties to such racket; that the appellant in
connivance with the financier defrauded the complainant in
receiving large sum of money on the pretext of legal
expenses and other incidental costs for advancing the
proposed loan to the complainant, but such loan was never
advanced to him; that the appellant had received Rs.10,000
from the complainant; that a case of professional misconduct
under section 35 of the Advocates Act had been established
against the appellant. The Committee, therefore, ordered the
name of the appellant to be removed from the State Roll of
the Bar Council of Maharashtra.
689
In the appeal to this Court,it was contended on behalf
of the appellant that he had no role in the matter of
alleged fraudulent activities of cheating by the financier
and/or some other persons as he was engaged by the financier
for preparing the document of mortgage after inspection of
records of the complainant for advancing the proposed loan
and he had only rendered the professional service as an
advocate in a fair and proper manner; that the appellant had
only received his professional fees from the financier and
did not receive any amount from the complainant; that the
finding of the Disciplinary Committee that the appellant had
been a member of the racket and had taken part in defrauding
and cheating the complainant was based on surmises and
conjectures; and that the Disciplinary Committee committed a
grave error in law in considering the evidence of witnesses
who were total strangers to the case of alleged fraud and
cheating.
Dismissing the appeal, this court,
HELD: 1.1. The appellant advocate has not only misused
the trust reposed in him but has played an active part in
defrauding or cheating the complainant who on the basis of
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the false representation of the appellant had to part with
substantial amount to his serious loss and prejudice. [p.704
E-G]
1.2 A perusal of the entire evidence placed on record
leads to the irresistible conclusion that the appellant was
not only having full knowledge about the racket but was also
an active member of such racket and was getting substantial
financial advantage. The appellant was not a silent
spectator merely giving his legal advice, but was an
important link in the modus operandi of running a racket by
the financier. [p. 704 C-D]
1.3. The evidence of many other applicants seeking loan
showing that they were also duped and met the same fate as
the complainant, speaks volumes against the conduct of the
appellant. [p. 704 B]
1.4. An advocate indulging in such nefarious activities
is not entitled to continue as a member of legal profession
which is based on the implicit faith and confidence in the
mind of the client. [p. 704 B-C]
690
1.5. It is not the case of a lapse to take appropriate
steps by and advocate and/or a case of negligence in
discharging the duties so that any lenient view may be taken
against the concerned advocate. [p. 704 F]
1.6. An advocate enrolled under the Advocates Act,
1961, having a licence to represent the case of litigants is
expected to maintain a high standard of morality and
unimpeachable sense of legal and ethical propriety. [p.704E]
2. The complainant specifically alleged that there was
a racket to which the appellant and the financier were
parties. He indicated the modus operandi by which he became
victim of the fraudulent activities of the said members of
the racket. To bring home the case of racket, the deposi-
tions of other persons who had also approached the financier
for advancement of loan and had been dealt with by him and
the appellant in similar manner and though they had to part
with substantial amount towards legal and other expenses for
getting the proposed loan, such loan had not been ultimately
sanctioned to them, became relevant and necessary to be
looked into. [p. 701 B-D]
3.1. It is always permissible to draw reasonable infer-
ence from the facts established in a proceeding and such
reasonable inference cannot be termed as finding based on
surmises and conjectures. There is no manner of doubt that
in any proceeding, judicial or quasi judicial, there is
requirement of proof and such requirement cannot be substi-
tuted by surmise and conjecture. But proof may be estab-
lished directly on the basis of the evidence adduced in the
proceeding or the allegation of fact may be established by
drawing reasonable inferences from other facts established
by evidence. [p. 703 B-D] 3.2. In the instant case, the
Committee, has referred to the admitted facts and also the
facts established in evidence and on a proper analysis of
the facts so established and/or admitted, it has drawn
reasonable inference. The Committee was alive to various
aspects of the case and has taken care in meticulously
scrutinising and analysing the evidence on record and the
materials, and the Committee has based its finding by giving
cogent reasons and the inferences drawn from the established
facts also appear quite reasonable. The Disciplinary Commit-
tee deserves commendation in disposing of the complainant’s
case fairly and dispassionately. In the matter of imposition
of punishment, the Disciplinary Committee
691
has referred to the relevant decisions of this Court and has
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imposed the penalty by recording good reasons for the same.
[p.703 A; D-E]
Re: P an Advocate AIR 1963 SC 1313 and M. Veerbhadra
Rao v. Tak Chand, AIR 1985 SC 28, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4437 of
1990.
From the Order dated 30.6.1990 of the Disciplinary
Committee of the Bar Council of India in B.C.I. TR Case No.
127 of 1988.
Satish Chandra, V.B. Joshi and Umesh Bhagwat for the
Appellant.
Respondent-in-person (NP)
The Judgment of the Court was delivered by
G. N. Ray, J. This Civil Appeal is directed against
the order dated June 30, 1990 passed by the disciplinary
Committee of the Bar Council of India under Section 36B of
the Advocate Act, 1961 in BCL Tr. Case No. 127 of 1988
arising out of the complaint made before the Bar Council of
Maharashtra in D.C. No.22 of 1987.Shri Ramesh Chandra Vit-
haldas Sheth made a complaint on February 9, 1987 to the
D.C. No.21 of Bar Council of Maharastra against the
respondent Devendra Bhaishankar Mehta,an Advocate practising
in Bombay inter alia alleging professional misconduct
against the said advocate.It was alleged by the respondent
complainant,that he carries on business of manufacturing at
Jhalod and he owns a proprietary firm named as M/s Ravi
Dyechem Manufacturing Industries and M/s Vithaldas Dye Stuff
Manufacturing Company. The complainant was in need of finan-
cial accommodation and was in search of a reliable financier
and Mr. Balu Bhai Modi impressed the complainant that they
would give financial accommodation on being satisfied about
the documents of security. It was represented to the com-
plainant that a firm of Solicitors run by the said Shri
Devendra Bhaishankar Mehta would examine the papers for the
purpose of financing and the said Shri Devendra Bhai Mehta
was also an investor. The complainant on such representation
agreed to get financial loan through the said Balu Bhai
Modi. The complainant alleged that an inspection of factory
and other premises at Jhalod was made by Shri Balu Bhai and
he was informed that the said properties were in excellent
condition and the estimated value was Rs.12 lakhs. He
692
was also assured that since the properties were valuable and
in excellent condition a lower rate of interest would be
considered and he was also told that a loan up to Rs.7 lakhs
would be advanced to him provided the complainant would be
advanced to him provided the complainant would pay a draft
or cash at the rate of 5 and 1/2% on the advance of the
amount of loan towards legal and other expense. He was also
informed that a meeting of the financiers would be held
including Mr. Devendra Bhai Mehta who was one of such finan-
ciers. Thereafter a meeting was arranged at the residence of
the said Shri Devendra Bhaishankar Mehta and in such meeting
Shri Devendra Bhaishankar Mehta falsely represented to the
complaint that he was an advocate of the firm of solicitors
M/s Dayalji and Deepchand and he worked only for the genuine
financiers and he would look to the interests of the loan
seekers. Shri Devendra Bhaishankar Mehta also represented to
the complainant that he was himself a member of the internal
group of the financiers who would advance the loan and hence
he was not only preparing the mortgage deed for the proposed
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loan but also scrutinising it for his own satisfaction. He
also assured the complainant that once the mortgage deed was
drafted by him the complainant would get loan within ten
days because thereafter only the formalities were required
to be gone into. The said Shri Mehta induced the complainant
to part with money for legal expenses and informed the
complainant that out of 5, and 1/2% of the amount of loan
required to be paid by the complainant by way of legal
expenses, Shri Devendra Bhaishankar Mehta would keep 3 and
1/2% for the stamp duty payable to the Government and he
also represented that the disbursement could be expedited
only if the complainant would pay cash to Balubhai Modi on
April 10, 1986. Shri Devendra Mehta also promised that he
would see that the loan proposal was passed in the internal
group of meeting of the financiers of which he himself was
one of the financiers and he would ensure that Shri Balu
Bhai Modi would sanction the loan as early as possible.
Thereafter Shri devendra Mehta had inspected the documents
and returned most of the original documents and assured the
complainant that he would get loan in a few days. On April
10, 1986 the complainant went to the office of Shri Balu B.
Modi and handed over to him a sum of Rs.25,000 for the loan
of Rs.7 lakhs @ 14%. Shri Balu B. Modi told the typist to
prepare the stamp receipt and also informed the complainant
to arrange for the payment of balance of Rs.13,500. The
complainant informed him that he would pay the balance to
Shri Devendra Mehta at the time of disbursement of loan.
Shri Balu Bhai Modi told the
693
complainant to pay to Shri Devendra Mehta within a week and
he instructed the typist to put the date as April 17, 1986
by which date the complainant would pay the balance sum of
Rs.13,500.
The complainant alleged that thereafter he had
contacted Shri Devendra Bhaishankar Mehta who represented to
the complainant that if the complainant could not pay the
balance of Rs.13,500 in a week, how internal group of finan-
ciers would believe that the complainant would repay the
loan of Rs.7 lakhs. He, therefore, advised the complainant
that he should pay a balance of Rs.13,500 and the complain-
ant accordingly paid the said balance sum. Shri Devendra
Bhaishankar Mehta, thereafter, made all attempts to delay
the advancement of loans by unending demands and the com-
plainant had to forward about 200 documents to Shri Devendra
Bhaishankar Mehta, but Shri Mehta ultimately conveyed to the
complainant through Shri Balu Bhai Modi that as the clear-
ance certificate under Section 230 A(i) of the Income Tax
Act had not reached the Office of the concerned authorities
and as the said advancement of loan was very heavy, he would
neither advance his share of finance nor he would agree to
the disbursement until a sum of Rs.10,000 would be handed to
Shri Devendra Bhaishankar Mehta. The complainant caused an
enquiry and came to know that the Certificate under Section
230 A(i) had reached the office on June 5, 1986. He, howev-
er, paid Rs.10,000 in July,1986 to Shri Devendra Bhaishankar
Mehta in the presence of Shri Balu Bhai Modi, when Shri
Devendra Bhaishankar Mehta told the complainant that he
would issue the receipt at the time of the disbursement of
the loan and he should be trusted. The complainant further
alleged that despite such payment and other steps taken by
the complainant, instead of disbursing the proposed loan,
Shri Balu Bhai Modi lodged a false complaint against the
complainant in Social Security Branch of Bombay Police on
September 5, 1986. The complainant thereafter made an appli-
cation to the C.I.D. Branch of Bombay Police on September 8,
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1986. The complainant alleged that because of the friendly
relationship by the racketeers including the said Shri
Balubhai Modi and Shri Devendra Bhaishankar Mehta with the
police, nothing was heard about his complaint but ultimately
on the personal intervention by the Commissioner of Police,
Bombay, his application was duly registered and Shri Balub-
hai Modi was chargesheeted in Criminal Case No. 1110/86. The
complainant was advised by the police to make an application
to the Bar Council against Shri Devendra Bhai Mehta. The
complainant also alleged in his petition of complaint to the
State Bar
694
Council that Shri Devendra Bhai Mehta had indulged in
fraudulent activities in respect of other persons and a list
of witness was attached to the said latter of complaint. As
the complainant case before the State Bar Council, could not
be disposed of within the statutory period , the complaint
stood transferred to the Disciplinary Committee of the Bar
Council of India and numbered as B.C.I. Tr. Case No.127/88.
As aforesaid, the judgment dated June 30, 1990 in the B.C.I.
Tr. Case No.127 of 1988 is the subject matter of Civil
appeal No. 4437 of 1990.
When the complaint case was pending before the Disci-
plinary Committee of the State Bar Council of Maharashtra,
the said Disciplinary Committee called upon the appellant to
file and affidavit. Pursuant to the direction of the State
Bar Council of Maharashtra, the appellant filed an affidavit
dated November 26, 1987 indicating therein the particulars
of the documents drafted by the appellant at the instance of
the said Shri Balubhai Modi for advancing loans to different
persons intending to get loan accommodation. The complain-
ant-respondent also deposed before the Disciplinary Commit-
tee of the State Bar Council and had applied for issuing
summons to the witnesses namely to the deponents of the
affidavits affirmed by Shri Munjibhai M. Shah and Shri
Devendra Shashikant Dyanmhotre, who had stated in their
affidavits that they had also become victim of fraudulent
action and cheating by the said Shri Balubhai Modi in conni-
vance with the appellant Devendra Mehta. The appellant op-
posed examination of such persons as witnesses in the pro-
ceedings inter alia on the ground that the said affidavits
had disclosed independent grievances of the deponents and
the said deponents had not complained before the Bar Coun-
cil. It, however, appears that the State Bar Council of
Maharashtra overruled such objections of the appellant. The
appellant in an attempt to stall the proceeding before the
State Bar Council moved a Writ Petition under Articles 226
and 227 of the Constitution of India being Writ Petition No.
1897 of 1988 in the High Court of Bombay inter alia chal-
lenging the legality and validity of the said complaint
proceeding before the State Bar Council. Such Writ Petition,
however, was rejected by the Bombay High Court on April 27,
1988 and the matter thereafter proceeded before the State
Bar Council and then stood transferred to the Disciplinary
Committee of Bar Council of India. The Disciplinary Commit-
tee of Bar Council of India examined and recorded evidences
of Prafulchandra Shah (CW 2), Munjibhai M. Shah (CW 3),
Shashikant D. Dyanmhotre (CW 5), Bhawanji Bharot (CW 6) and
Mahesh Ramanlal Shah (CW 4). It may be noted here
695
that Mahesh R. Shah (CW 4) an advocate had acted for Praful-
chandra Shah in Criminal Case. The appellant and complainant
had also deposed in the said disciplinary proceeding before
the Bar Council of India and their respective statements
were also recorded.
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The Disciplinary Committee of the Bar Council of India
scrutinised and analysed the evidences and materials on
record and by giving elaborate reasoning, the Disciplinary
Committee inter alia came to the finding that it was
established beyond reasonable doubt that there was a racket
for defrauding and/or cheating to aspirant loanees and Shri
Balubhai Modi and the appellant advocate were parties to
such racket. The Disciplinary Committee had also come to the
finding that it was established that the appellant had
received Rs. 10,000 from the complainant-respondent on July
11, 1986. The Disciplinary Committee also came to the
finding that the appellant in connivance with the
complainant defrauded the complainant in receiving large sum
of money on the pretext of legal expenses and other
incidental costs for advancing the proposed loan to the
complainant but such loan was never advanced to the
complainant and instead of disbursing the loan. Shri
Balubhai Modi got a false complaint lodged against the
complainant in Social Security Branch on September 5, 1986.
The Disciplinary Committee also came to the finding that a
case of professional misconduct under Section 35 of the
Advocates Act, 1961 had been established against the appel-
lant. On the question of punishment to be imposed on the
appellant, the Disciplinary Committee of the Bar Council of
India inter alia came to the finding that in the facts and
circumstances of the case, the offence of misconduct commit-
ted by the concerned Advocate was of a very serious nature.
The Advocate had no feeling of regret and remorse. There was
no extraneous circumstances of the basis of which the mem-
bers of the Committee could persuade themselves to take a
lenient and liberal view about the punishment and a lenient
view would not be justified in the facts of the case. The
Committee felt that the name of the said Advocate should be
removed from roll of the Advocates. The Disciplinary Commit-
tee has noted that the Committee has taken into considera-
tion the guidelines given by the decisions of this court in
several namely in Re: P an Advocate [AIR 1963 SC 1313] in M.
veerbhadra Rao v. Tek Chand AIR 1985 SC 28 for imposing the
punishment on the concerned Advocate. The Disciplinary
Committee therefore passed the following order in exercise
of power under Section 35(3)(d) read with Section 36 and 36
B under Section 43 of Advocates’ Act, 1961.
696
ORDER:
"The name of respondent-Advocate Mr. Devendra
Bhaishankar Mehta, Advocate on the State Roll of
the Bar Council of Maharashtra be removed from its
Roll. He shall pay Rs.2,000 as costs of these
proceedings to complainant Mr. Rameshchandra
Vithaldas Sheth."
At the hearing of this appeal, it has been very
strongly contended before us by the learned counsel for the
appellant that the Disciplinary Committee of the Bar Cous-
teau of India had proceeded with a closed mind presumably
being influenced by the serious nature of complaint made by
the complainant-respondent without appreciating properly
that the appellant had no role in the matter of alleged
fraudulent activities and of cheating by Shri Balubhai Modi
and/or some other persons. The appellant had only rendered
the professional service as an Advocate in a fair and proper
manner. It has been contended by the learned counsel for the
appellant that the appellant is a practising counsel and he
was engaged by the said Shri Balubhai Modi for preparing the
documents of mortgage, on inspection of the records of the
complainant for advancing the proposed loan for Rs. seven
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lakhs. The appellant in his professional capacity had to
give his advice. Accordingly, he had looked into the docu-
ments placed before him by Shri Balubhai Modi and the com-
plainant and prepared the draft deed for mortgage and he had
also advised his client Shri Balubhai Modi for compliance of
the conditions mentioned in the draft deed before advance-
ment of loan so that his client Shri Modi was properly
secured. The learned counsel has also contended that such
action on the part of the appellant was only fair and proper
and any responsible. Advocate when engaged by a client was
expected to do in the manner in which he had acted. The
learned counsel has further contended that it is not a case
of the complainant or anybody that the appellant had given
any advertisement for advancing loan to any person and it is
also nobody’s case that he on his own had induced persons to
seek such loan and/or he had referred the complainant or any
other person to Shri Balubhai Modi or to any other person
for getting such loan. It has been contended by the learned
counsel that it is the positive case of the complainant-
respondent that pursuant to the advertisement given by Shri
Balubhai MOdi he had approached Shri Balubhai Modi for a
loan for running his business and Shri Balubhai Modi had
clearly stated to the complainant that such loan could be
advanced if
697
on inspection of the properties of the complainant the
financiers would decide that such loan could be advanced to
the complainant and such loan would be advanced on the basis
of advice to be taken from the lawyer of the financiers and
on execution of proper mortgage deed, on scrutiny of the
relevant papers and documents. The appellant did not come
into the picture at all when the complainant pursuant to the
advertisement had contacted Shri Balubhai Modi. It has also
been submitted by the learned counsel that admittedly the
complainant was referred to the appellant in his capacity as
a legal practitioner engaged by the said Shri Balubhai Modi
and/or the financiers. The learned counsel has contended
that only in the capacity of an Advocate engaged by a cli-
ent, the appellant had drafted the deed of mortgage and he
had also clearly indicated to the complainant and also to
the said Shri Balubhai Modi when the Conference was held in
his place that for advancement of loan, the mortgage deed as
drafted by him should be executed and the complainant should
fulfil the terms and conditions indicated by the appellant
in the draft deed. Since the complainant failed to satisfy
the terms and conditions as drafted by the appellant, he had
advised Shri Balubhai Modi that he could not approve the
advancement of loan. The learned counsel has further submit-
ted that it is an admitted case that thereafter the com-
plainant got another document prepared by somebody else and
the appellant refused to approve such document because the
same was not drafted by him and he did not want to take any
responsibility in the matter on the basis of a document not
drafted by him. The learned counsel has contended that such
action on the part of the appellant clearly indicates that
the appellant was a responsible lawyer who wanted to safe-
guard the interest of his client and despite request he did
not agree to approve any document not drafted by him. It has
been submitted by the learned counsel for the appellant that
if the appellant had real intention to defraud the complain-
ant and to be a party to the alleged racket, he would not
have dealt in a straightcut manner and would not have washed
his hands in the matter of execution of the document of
mortgage. The learned counsel for the appellant has further
submitted that the case of payment of any money directly by
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the complainant to the appellant as sought to be made was
not true and should not be accepted. The appellant had
received his professional fees only from his client namely,
Shri Balubhai Modi. He had further submitted that the com-
plainant-respondent falsely stated before the Bar Council
that the appellant had extorted Rs.10,000 from him and such
payment of Rs.10,000
698
was made by the complainant directly to the appellant. He
has submitted that such case was not made out by the
complainant in his complaints before the Police. The
complainant made embellishment to his case by falsely alleg-
ing that the appellant had asked the complainant to pay a
sum of Rs.10,000 on the assurance that on such payment
mortgage deed would be executed without any delay so that
the complainant would get the loan of Rs. Seven lakhs and
the appellant had actually received Rs.10,000 from him. The
learned counsel has contended that such uncorroborated
testimony of the complainant about payment of Rs.10,000 by
him to the appellant is not at all convincing and should not
be accepted more so when such case had not been made out in
the beginning and a false case of payment of Rs.10,000 was
sought to be introduced at a later state. The learned coun-
sel has contended that if the judgment/order under appeal is
scrutinised in the proper perspective, it will clearly
reveal a closed mind and a biased approach of the members of
the Disciplinary Committee. The Committee unfortunately
presumed various facts against the appellant on mere surmise
and conjecture for the purpose of coming to the finding that
the appellant had been a member of the racket and he had
taken part in defrauding and cheating the complainant a
large sum of money by assuring him that a loan of Rs. seven
lakhs would be advanced to him. The learned counsel has also
contended that the Disciplinary Committee has committed a
grave error in law in considering the evidences of four
witnesses who were total strangers to the case of alleged
fraud and cheating of the complainant. Such witnesses had no
knowledge whatsoever about the alleged deal relating to the
case of the complainant and they claimed to be aspirants of
getting loans individually in different transactions. The
learned counsel has also submitted that the Disciplinary
Committee has committed a grave error in law in considering
the evidences of CW 2 Prafulchandra Shah, CW 3 Munjibhai M.
Shah, CW 5 Shashikant D dyanmohtre and CW 6 Bhawanji Bharot
because the alleged case of complicity of the appellant in
being a member of the racket to cheat the said aspiring
loanees had not been put to the appellant when he was under
cross examination.
The learned counsel had further submitted that the
appellant is a practising advocate and he has a status and
respect in the Society. In discharge of his professional
duties, he has acted as a responsible member of the legal
profession when he was engaged by Shri Balubhai Modi. It is
neither possible nor desirable for an Advocate to cause
enquiries about the real intention of the client in the
proposed transaction between the client
699
and a third party. Even if it is accepted that Shri Balubhai
Modi gave advertisements to dupe the intending loanees for
the purpose of cheating them on false assurance of loans,
the Disciplinary Committee should have adverted to the real
question in issue as to whether or not the appellant himself
made any false representation to the complainant and had
taken part in defrauding or cheating the complainant. The
mere fact that he was engaged by a dishonest person cannot
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be any ground to hold that the appellant himself was guilty
of misconduct only because he had acted as an advocate of a
party who may be guilty of the offence of fraud or cheating.
The part played by the appellant as an advocate was required
to be analysed with an open mind and with reference to the
documents and evidences on record but unfortunately the
Disciplinary Committee miserably failed and neglected to
discharge the responsibilities and the duties and functions
entrusted to the Committee. The Committee has accepted
inadmissible evidences and uncorroborated testimony of the
complainant, which in the facts and circumstances of the
case were required to be discarded. It has been submitted by
the learned counsel for the appellant that it is only unfor-
tunate that instead of holding that the complainant unjustly
tried to implicate the appellant by falsely alleging against
him that he was guilty of misconduct, the Disciplinary
Committee, on mere suspicion has drawn adverse inferences
against the appellant and based its finding which really lay
in the realm of surmise and conjecture. The learned counsel
has submitted that this being a statutory appeal, this Court
Should intrinsically consider the facts and circumstances of
the case and should make proper evaluation of the evidences
on record and in doing so should discard the improper and
unjust finding made by the Disciplinary Committee. The
learned counsel for the appellant has contended that the
Court may have a concern to ensure that the professional
morality and standard are maintained by the members of the
profession but at the same time the Court should not loose
sight of the fact that any finding based on surmise and
conjecture against the appellant will not only do a great
harm to his avocation in life and professional career but
will also cause immense harm in the matter of his standing
and repute in the society and to his friends and relatives
and such harms cannot be compensated in any manner. In the
facts and circumstances of the case the learned counsel for
the appellant has contended, that the complainant has miser-
ably failed to establish the complaint made to the Discipli-
nary Committee and the disciplinary proceeding was liable to
be dismissed with exemplary cost. This
700
Court should therefore allow the appeal and dismiss the
complaint with cost.
After giving careful consideration to the facts and
circumstances of the case and materials on record and
arguments advanced at the hearing of the appeal, we, howev-
er, do not subscribe to the view that the Disciplinary
Committee of the Bar Council has proceeded with a closed
mind and with a definite bias presumably being influenced by
the serious nature of allegation as sought to be contended
by the learned counsel for the appellant. The Judgment and
Order under appeal clearly reveal that the Disciplinary
Committee has taken pains in scrutinising and analysing the
facts of the case as dispassionately as practicable. It also
appears to us that the weaknesses in the case of the com-
plainant was not lost sight of and has been specifically
adverted to by the Disciplinary Committee even when such
infirmity was not pointed out by the appellant at the hear-
ing. It was contended that Rs.10,000 was not advanced by the
complainant and the case of such advancement of Rs.10,000 to
the appellant-advocate by the complainant himself was false
and after thought. The Disciplinary Committee has not only
considered the case of the appellant as argued but has also
taken into consideration the other possible argument in
favour of the appellant though not argued. It was on consid-
eration of all aspects of the matter, the Disciplinary
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Committee has come to the finding by giving cogent reasons
therefor. To illustrate this aspect, reference may be made
to paragraph 18 of the judgment under appeal :-
"If really A was not merely an advocate, but also a
financier, would D utter the words: "I will pay
Rs.10,000 fees to A only after the registration of
the documents", and even if he so utters these
words, would C not feel suspect about the same ? In
fairness to A. We have addressed this question to
ourselves though A did not address us on this. But
in the predicament in which C was placed, in the
situation in which he was made to drive himself
from pillar to post and particularly having gone
out of pocket to the tune of Rs 40,000 after com-
plying with the necessary formalities so far and
keen as he was to get the loan of Rs. 7,00,000 as
early as possible, it is quite possible that his
conduct might not be that of a person who would be
one of the accurate calculation and assessment."
701
It has been strongly contended by the learned counsel
for the appellant before us that the other aspirant loanees
who had also approached Shri Balubhai Modi and were referred
to Shri Devendra Mehta for taking legal steps to enable the
said aspirant loanees to get the proposed loan should not
have been examined in the case of Shri Devendra Mehta be-
cause they were not witnesses to the case of fraud and
cheating of the complainant and they had no personal knowl-
edge of the case and they had also not made any complaint to
the Bar Council in respect of their cases. Such contention,
in out view, is devoid of any merit and should be discarded.
The complainant specifically alleged that there was a racket
to which the concerned advocate and Shri Balubhai Modi were
parties. The complainant has indicated the modus operandi by
which he became victim of the fraudulent activities of the
said members of the racket. To bring home the case of racket
the depositions of other persons who had also approached
Shri Balubhai Modi for advancement of loan and had been
dealt with by Shri Modi and Shri Devendra Mehta in similar
manner and though they had to part with substantial amount
towards legal and other expenses for getting the proposed
loan, such loan had not been ultimately sanctioned to them,
became relevant and necessary to be looked into. As a matter
of fact, before the Bombay High court the appellant also
challenged the propriety and correctness of the Disciplinary
Committee of the State Bar Council to examine other loanees
dealt with by Shri Balubhai Modi and Shri Devandra Mehta but
the High Court of Bombay did not accept such contention by
holding inter alia that, read in proper context, it cannot
be said that the allegation of racket was totally absent. It
may be noted here that the Disciplinary Committee was anx-
ious to independently assess the facts and circumstances of
the dispassionate manner without being influenced by any
observation of the Bombay High Court in disposing of the
Writ Petition of Shri devendra Mehta. Such anxiety is clear-
ly demonstrated by the observation of the Disciplinary Com-
mittee in paragraph 2 (c) of the judgment/order under appeal
which may be quoted hereunder:
"2(c) The High Court also went through C’s evidence
before the State D.C and opined that read in proper context
it cannot be said that the allegation of a "a racket" was
totally absent therein. All said and done, when the State
D.C. properly exercised its discretion, the High Court
thought it improper to entertain the writ petition under
Art. 227 of the Constitution.
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702
We must say at this stage that at the time of assessing
the whole evidence at the end of full dress inquiry we have
taken sufficient care and caution to see that the findings
of the State D.C. on the preliminary issue and the High
Court’s dismissal in limine of A’s writ petition declining
to interfere with the said findings do not weigh with us for
the said assessment. Suffice it to say, we have briefly
narrated the details for keeping the record straight."
It has also been contended by the learned counsel for the
appellant that the Disciplinary Committee could not
appreciate the facts and circumstances of the case in their
proper perspective in view of the fact that the Committee
proceeded with a preconceived notion. It was precisely on
account of such a pre conceived view and bias, the Discipli-
nary Committee failed to appreciate that the appellant had
only acted in responsible manner expected of an advocate
engaged by a client. The learned counsel has contended that
it was nobody’s case that the appellant had floated a pro-
posal to advance loan and he had given any advertisement in
response to which the complainant had come in contact of
Shri balubhai Modi. It is an admitted case that in response
to an advertisement by Shri Balubhai Modi, the complainant
had approached Shri Balubhai Modi for loan and only then he
was referred to the appellant by Shri Modi because the
appellant was engaged by Shri Modi as a counsel. Although
the appellant had always dealt with the complainant only in
his capacity as an advocate engaged by Shri Modi, a false
complaint was lodged by the complainant that the appellant
had assured him and represented him that he himself was a
financier and he should pay the amount in question to Shri
Balubhai Modi and also to the appellant towards legal ex-
penses and other expenses so that loan for Rs.7 lakhs would
be advanced to him without delay. Such case, according to
the learned counsel, could not be established by any corrob-
orative evidence but has been accepted by the Disciplinary
committee on mere surmise and conjecture. We are, however,
unable to accept the said contention of the learned counsel.
We have carefully considered the materials on record and the
reasonings of the Disciplinary Committee in the impugned
judgment and we are unable to hold that the findings of the
Disciplinary committee are outcome of any closed mind or
bias on the part of the committee and/or findings of the
Committee really lay in the realm of surmise and conjecture.
We have already indicated the anxiety of the Disciplinary
Committee to dispassionately assess the facts of the case
703
without being influenced by any observation of the High
Court of Bombay. The Committee was alive to various aspects
of the case and has taken care in meticulously scrutinising
and analysing the evidence on record and the materials and
the Committee has based its finding by giving cogent reasons
and the inferences drawn from the established facts also
appear to us quite reasonable. It may be indicated at this
stage that Shri Balubhai Modi had died during the pendency
of the proceedings before the Disciplinary Committee of the
Bar Council of India and there was no occasion to proceed
further with the criminal proceeding initiated against him
and/or to examine him in the instant case. It is always
permissible to draw reasonable inference from the facts
established in a proceeding and such reasonable inference
cannot be termed as finding based on surmises and conjec-
tures. There is no doubt that in any proceeding, judicial or
quasi judicial. there is requirement of proof and such
requirement cannot be substituted by surmise and conjecture.
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But proof may be established directly on the basis of the
evidence adduced in the proceeding or the allegation of fact
may be established by drawing reasonable inferences from
other facts established by evidence. In the instant case,
the committee, in our view, has referred to the admitted
facts and also the facts established in evidence and on a
proper analysis of the facts so established and/or admitted
it has drawn reasonable inference . The Disciplinary Commit-
tee deserves commendation in disposing of the complainant’s
case fairly and dispassionately. In the matter of imposition
of punishment, the Disciplinary Committee has referred to
the relevant decisions of this Court imposed the penalty by
recording good reasons for the same.
We are not oblivious of the fact that a member of legal
profession should not be permitted to be exposed to the
hazards of false and malicious allegation against such
member and extreme care and caution is required to be taken
in dealing with the case of allegation of unfair and improp-
er conduct on the part of a member of legal profession.
There is no manner of doubt that the impugned decision of
Disciplinary Committee has a very serious implication on the
reputation and standing of the appellant in the society and
to the members of his family. friends and relatives. The im-
pugned decision has also a serious bearing on the profes-
sional career of the appellant and avocation of life in
future. But giving out anxious thought and consideration in
the matter we have not been able to come to the finding that
the impugned order was improper and unjust and the findings
704
are not tenable law and/or the decision has resulted in a
failure of justice to the appellant. During the course of
arguments before us, we had pointedly asked the learned
counsel for the appellant to show us any material on record
that in any other case on the advice tendered by the appel-
lant any loan was in fact given by Mr. Balu Bhai Modi in
order to dispel the inference that the appellant was not a
member of the racket and was only discharging his profes-
sional duty. The learned counsel for the appellant was
unable to show any evidence worth the name to prove the
innocence of the appellant. The evidence of many other
applicants seeking
loan shows that they were also duped and met the same fate
as the complainant’ speaks volumes against the conduct of
the appellant. An advocate indulging in such nefarious
activities is not entitled to continue as a member of legal
profession which is based on the implicit faith and confi-
dence in the mind of the client. From a perusal of the
entire evidence placed on record and read before us, leads
us to the irresistible conclusion that the appellant was not
only having full knowledge about the racket but was also
active member in the complicity of such racket and was get-
ting substantial financial advantage. The appellant was not
a silent spectator merely given his legal advice, but was an
important link in the modus operandi of running a racket by
Balu Bhai Modi. It is really unfortunate that a member of a
legal profession has indulged in fraudulent activities in a
calculated manner for financial gain at the cost of an
innocent person. To say the least, an advocate enrolled
under the Advocates Act, 1961, having a licence to represent
the case of litigants is expected to maintain a high stand-
ard of morality and un-impeachable sense of legal and ethi-
cal propriety. It is not the case of a lapse to take appro-
priate steps by an Advocate and/or a case of negligence in
discharging the duties so that any lenient view may be taken
against the concerned advocate. The concerned advocate has
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not only misused the trust reposed in him but has played an
active part in defrauding or cheating the complainant who on
the basis of the false representation of the concerned
advocate had to part with substantial amount to his serious
loss and prejudice. In such facts and circumstances of the
case, we do not find any reason to reduce the punishment
imposed on the appellant. This appeal, therefore, fails and
is dismissed with costs.
R.P. Appeal dismissed
705