Important Point
Where an Advocate obtained a loan from opposite party to the suit while paying the amount under compromise reached between his client and complainant (opposite party) but cheque issued by him bounced, it could not be said that his failure to pay the amount of loan amounted to professional obligation or duty qua the complainant.

Headnote:Advocates Act, 1961-Professional misconduct - Suit compromised-Money paid to complainant (plaintiff) - Respondent, Advocate of opposite side persuaded complainant, plaintiff to give him Rs. 3000/- as loan-Advocate gave post dated cheque-Cheque bounced on presentation-Complaint that Advocate’s act amounted to professional misconduct-State Bar council and Bar council of India Holding Advocate guilty of misconduct-Not correct - While taking loan on any pretex appellant Advocate was not acting in his professional capacity quo complainant-No professional misconducted committed in failing to repay loan-Remedy to complainant lied at Civil/Criminal Court - No professional obligation or duty of appellant qua complainant who was a third party who was no better than a third party creditor qua appellant.
       Held : it is found that all that the complainant alleged was to the effect that the appellant being an Advocate of the other side and after settling the civil dispute between the parties by way of compromise had persuaded the complainant to part with an amount of Rs. 3,000/- by way of a hand loan. The post dated cheque given by him to the complainant bounced and the appellant did not repay the amount even thereafter despite repeated request. In our opinion, these type of allegations even taken at the highest, would show that the complainant was persuaded to give a hand loan of Rs. 3,000/- to the appellant and that amount was not repaid by him. It is pertinent to note that the appellant while taking the loan from the respondent on any pretext was not acting in his professional capacity qua the complainant. He was acting as a needy person and persuaded the creditor to give him an amount of Rs. 3,000/-. If that amount was not paid back, civil remedy was available to the complainant and if the cheque had bounced after coming into force of Section 138 of the Negotiable Instruments Act, it might have resulted in criminal litigation, but however so far as the professional misconduct is concerned, we fail to appreciate as to how the Disciplinary Committee of the State Bar Council held that the appellant qua the complainant had committed any professional misconduct because he had taken a hand loan from the complainant-respondent and not repaid it. It is also to be noted that against the order of the Disciplinary Committee of the Bar Council of India, this Court as early as on 8.11.1989 issued notice and suspended the order of the Bar Council of India. The said order is continuing althroughout and we are informed by learned counsel for the appellant that the appellant is still practising. By an order dated 9.9.1991 in presence of learned counsel for the respondent this Court had directed that the appellant shall take steps to deposit a sum of Rs. 3,000/- in the Registry of this Court within a period of four weeks for payment to the respondent. Office report shows that the amount was already deposited as early as on 25.9.1991. Learned counsel for the respondent states that this amount is still not withdrawn. Under these circumstances, in our opinion, the appellant cannot be said to be guilty of any professional misconduct. It is also interesting to note that in the very examination-in-chief before the Disciplinary Committee of State Bar Council the complainant stated that if Rs. 3,000/- is paid to him, he is prepared to withdraw the complaint. We fail to appreciate how the appellant being a practising Advocate did not take up this opportunity to close the chapter as admittedly he had taken the loan and had not repaid the same to the complainant-creditor. That shows an inadvertant conduct on the part of the appellant but still it does not make out any professional misconduct. We would have understood if the appellant was alleged to have misused his position and had taken any money from his own client and had retained that amount. That would have been a clear case of professional misconduct in view of the decision of this Court in the case of N.B. Mirzan v. The Disciplinary Committee of the Bar Council of Maharashtra & Anr. reported in (1972) 4 SCC 412. But this is not one case. There was no professional obligation or duty of the appellant qua respondent-complainant who was a third party and who was no better than a third party creditor qua the appellant. (Para 4)
       In the result, the order passed by the State Bar Council of Andhra Pradesh and the Disciplinary Committee of the Bar Council of India are set aside and the complaint filed by the complainant is dismissed. However, an amount of Rs. 3,000/- which is lying in the Registry of this Court shall be permitted to be withdrawn by the respondent towards his dues. (Para 5)

Judgment

S.B. Majmudar, J.-The appellant who is a practising Advocate has brought in challenge the order passed by the Bar Council of India under the provisions of Advocates Act, 1961 holding him guilty of professional misconduct and ordering his suspension from practice for a period of two years.

2. A few facts leading to this appeal deserve to be noted.

3. One G. Rami Reddy had filed a suit against the respondent-complainant, G. Lingappa and another being O.S. No. 173 of 1983 on the file of Assistant Civil Judge City Civil Court, Hyderabad for dissolution of partnership. In the suit, the appellant represented the opponent of the present respondent-complainant. In the suit, the parties negotiated for compromise. As per the terms of agreement dated 2.7.1984 a compromise memo was filed in the Court. On the day of compromise, the complainant however was paid an amount of Rs. 12,000/- cash though he had to receive Rs. 3,000/- more meaning Rs. 15,000/-. It is the case of the complainant-respondent before the Bar Council of the State of Andhra Pradesh that after the said compromise was entered into, the appellant-Advocate for the other side called him for a cup of tea in the canteen and persuaded him to give him a hand loan of Rs. 3,000/- as he was in urged heed for providing furniture for the School run by his wife. It is the further case of the respondent that accordingly he parted with Rs. 3,000/- against a post dated cheque dated 8.3.1984 given by the appellant to him. The said cheque being presented bounced. Despite repeated requests of the complainant-respondent, the appellant did not refund the said amount. Hence, according to him, the appellant was guilty of professional misconduct. A complaint was filed before the State Bar Council of Andhra Pradesh. The appellant contested the proceedings. After hearing the parties and recording the evidence offered by them, the State Bar Council came to the conclusion that the appellant was guilty of professional misconduct and hence he was ordered to be suspended from practising as an Advocate for a period of two years from the date of receipt of the order. Appellant’s appeal before the Bar Council of India failed as its Disciplinary Committee was not inclined to take a contrary view.

4. Having heard learned counsel for the parties, it is found that all that the complainant alleged was to the effect that the appellant being an Advocate of the other side and after settling the civil dispute between the parties by way of compromise had persuaded the complainant to part with an amount of Rs. 3,000/- by way of a hand loan. The post dated cheque given by him to the complainant bounced and the appellant did not repay the amount even thereafter despite repeated request. In our opinion, these type of allegations even taken at the highest, would show that the complainant was persuaded to give a hand loan of Rs. 3,000/- to the appellant and that amount was not repaid by him. It is pertinent to note that the appellant while taking the loan from the respondent on any pretext was not acting in his professional capacity qua the complainant. He was acting as a needy person and persuaded the creditor to give him an amount of Rs. 3,000/-. If that amount was not paid back, civil remedy was available to the complainant and if the cheque had bounced after coming into force of Section 138 of the Negotiable Instruments Act, it might have resulted in criminal litigation, but however so far as the professional misconduct is concerned, we fail to appreciate as to how the Disciplinary Committee of the State Bar Council held that the appellant qua the complainant had committed any professional misconduct because he had taken a hand loan from the complainant-respondent and not repaid it. It is also to be noted that against the order of the Disciplinary Committee of the Bar Council of India, this Court as early as on 8.11.1989 issued notice and suspended the order of the Bar Council of India. The said order is c

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1999 Supreme(SC) 31

Cases Referred (1)