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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