Tuesday, 5 September 2017

Whether Advocate can be prosecuted for giving wrong search report to bank?

After hearing learned counsel for the parties
and perusing the record of the case alongwith the factual
report submitted by the learned Public Prosecutor as well
as the precedent law cited at the Bar, this Court is of the
opinion that in totality, the only allegation against the
petitioners is that they were panel lawyers of the Bank
and were supposed to furnish their professional advice
regarding the documents submitted by the loanee.
13. The advice rendered by the petitioners has
apparently gone wrong, but such a wrong would not
entitle the respondent to prosecute a lawyer, as it does
not amount to any criminal culpability. The petitioners at
the most may be liable for gross negligence or
professional misconduct, if it is established by the
evidence, but they cannot be charged for the offences, as
alleged, alongwith the other conspirators.
14. It is not the case of the prosecution that the
petitioners were conspirators alongwith the loanee or had
direct link with them, so as to enter into the conspiracy to
cause loss to the Bank. If any such material was on
record, then of course, the prosecution could have
proceeded against the petitioners. But since there is no
such fact available on record, therefore, the prosecution
of the lawyers, merely on the basis of their professional
advice, cannot be sustained in the eye of law.
15. The Hon’ble Supreme Court in Central
Bureau of Investigation, Hyderabad (supra) also
observed that rendition of legal opinion cannot be
construed as an offence.
16. This Court also takes note of the fact that it is
not possible for the panel advocate to investigate the
genuineness of the documents and he can only peruse the
contents and conclude whether the title was conveyed
through a document or not, which has been done in this
case. It shall not be possible for a lawyer to render
professional advice, in case a wrong advice results into a
case for criminal prosecution against him, and in such
circumstances, the system of justice delivery shall suffer,
as lawyer being an important component of the justice
delivery system would not be able to give his professional
advice without fear and favour.
17. It is also not the case of the prosecution that
the petitioners were themselves involved in forgery or in
creation of illegal documents for committing fraud with
the Banking institution.
18. In light of the aforesaid discussions, this
Court deems it appropriate to allow the present
misc.petitions and the same are accordingly allowed. FIR
No.54/2009 registered at Police Station, Shastri Nagar,
Jodhpur for offences under Sections 420, 467, 468 and
471 IPC is quashed qua the present petitioners only. 
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 2786 / 2017
Rajendra Singh  State of Rajasthan 
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
 Order
29/08/2017

1. Petitioner has preferred this misc. petition under
Section 482 of Cr.P.C. for quashing the FIR No.164/03.08.16 P.S.
Bajju, District Bikaner offence under Section 420, 467, 468, 471
and 120- B of IPC.
2. Learned counsel for the petitioner has stated that
petitioner is practicing lawyer at Bikaner and the petitioner was
panel advocate of the various bank and on the request of the
banks, petitioner submitted the search reports to the bank on the
basis of documents submitted. Counsel for the petitioner has also
stated that there is role of the petitioner in creating the
documents for providing the loan to the persons who brought the
documents. Since, it is a choice and prerogative of the bank either
to grant or refuse the loan and as such the allegation on the
lawyer for filing report i.e. virtually advice cannot be impleaded as
a party accused in impugned FIR.
3. On 03.08.2016 the respondent No.2 lodged the FIR and
alleged that one Mohd. Rafiq S/o Sh. Alla Bux took an advance
loan of Rs.8.18 lacs by playing cheating with bank and on the
basis of forged documents under the Kishan Sambal Yojna. It is
also stated by counsel for the petitioner that the land in question
was mortgaged by the accused Mohd Rafiq situated at 16 SMD,
Murabba No.183/58, 183/50 and 203/02 totaling 48 bighas of land
which was already mortgaged. Counsel for the petitioner has also
stated that petitioner prepared forged report in favour of the
Mohd. Rafiq and supported him by giving it to the bank and FIR
was lodged against the accused including the present petitioner.
4. Learned counsel for the petitioner submits that the
matter is squarely covered by the judgment rendered by a
coordinate Bench of this Court in Madhu Gupta Vs. State of
Rajasthan & Anr. (S.B. Criminal Misc. Petition
No.2984/2016) decided on 23.03.2017.
5. This Court on 23.03.2017 has passed the following
order in Madhu Gupta Vs. State (Supra):-
“ 1. Both the criminal misc.petitions under
Section 482 Cr.P.C. arise out of the same FIR
No.54/2009 registered at Police Station, Shastri
Nagar, Jodhpur for offences under Sections 420, 467,
468 and 471 IPC, and therefore, the same are being
decided by this common order.
2. The petitioners have preferred these
misc.petitions for quashing of the aforesaid common
FIR.
3. Non-petitioner No.2, who is Chief Manager
of the Bank of Baroda, University Campus Branch,
Jodhpur lodged FIR No.54/2009 at Police Station,
Shastri Nagar, Jodhpur on 09.02.2009, in which he
alleged that the loans were given to certain persons
for business purposes. It was also alleged in the FIR
that the loanee-Proprietor of M/s.Krishna Enterprises
Shri Kumar Khanna s/o Shri Hardayal Khanna had
moved an application before the Bank for grant of loan
of Rs.25,00,000/-.
4. For proceeding with the grant of loan, the
procedure was initiated for verification of the
documents. The panel lawyers/Advocates were asked
to verify the documents on Plot No.3 situated near
Hari Nagar Khasra No.176/74, Village Chopasni,
Jodhpur, so as to ascertain whether the documents
submitted were correct or were having proper legal
validity. The lawyer Shri J.K.Chanda prepared a nonencumbrance
certificate and lawyer Ms.Madhu Gupta
prepared the investigation report regarding the
property in question. However subsequently, it came
to the knowledge of the Bank officers that the report
submitted by both the lawyers was not correct and the
proposition of title was also not correct.
5. It is not in doubt that the loanee prima
facie did not deposit the instalments, and furnished
false and fabricated documents for mortgage, which
has resulted into the loss to the Bank. The FIR was
registered against the loanee and his guarantor and
other persons, who were conspirators in cheating with
the Bank in connivance with the loanee.
6. Learned Senior Counsel for the petitioner,
Mr.Mahesh Bora has referred to the judgment of the
Hon’ble Supreme Court in Central Bureau of
Investigation, Hyderabad Vs. K.Narayana Rao,
2012 CRI.L.J. 4610 (SC). The relevant paragraphs
of the said judgment reads as follow :-
12. While considering the very same provisions i.e.,
framing of charges and discharge of accused, again in
Sajjan Kumar (supra), this Court held thus:
19. It is clear that at the initial stage, if there is a
strong suspicion which leads the court to think that
there is ground for presuming that the accused has
committed an offence, then it is not open to the court to
say that there is no sufficient ground for proceeding
against the accused. The presumption of the guilt of the
accused which is to be drawn at the initial stage is only
for the purpose of deciding prima facie whether the
court should proceed with the trial or not. If the
evidence which the prosecution proposes to adduce
proves the guilt of the accused even if fully accepted
before it is challenged in cross-examination or rebutted
by the defence evidence, if any, cannot show that the
accused committed the offence, then there will be no
sufficient ground for proceeding with the trial.
20. A Magistrate enquiring into a case Under
Section 209 Code of Criminal Procedure is not to act as
a mere post office and has to come to a conclusion
whether the case before him is fit for commitment of
the accused to the Court of Session. He is entitled to
sift and weigh the materials on record, but only for
seeing whether there is sufficient evidence for
commitment, and not whether there is sufficient
evidence for conviction. If there is no prima facie
evidence or the evidence is totally unworthy of credit, it
is the duty of the Magistrate to discharge the accused,
on the other hand, if there is some evidence on which
the conviction may reasonably be based, he must
commit the case. It is also clear that in exercising
jurisdiction Under Section 227 Code of Criminal
Procedure, the Magistrate should not make a roving
enquiry into the pros and cons of the matter and weigh
the evidence as if he was conducting a trial.
Exercise of jurisdiction Under
Sections 227 and 228 Code of Criminal Procedure
21. On consideration of the authorities about the scope
of Sections 227 and 228 of the Code, the following
principles emerge:
(i) The Judge while considering the question
of framing the charges Under
Section 227 Code of Criminal Procedure has
the undoubted power to sift and weigh the
evidence for the limited purpose of finding
out whether or not a prima facie case against
the accused has been made out. The test to
determine prima facie case would depend
upon the facts of each case.
(ii) Where the materials placed before the
court disclose grave suspicion against the
accused which has not been properly
explained, the court will be fully justified in
framing a charge and proceeding with the
trial.
(iii) The court cannot act merely as a post
office or a mouthpiece of the prosecution but
has to consider the broad probabilities of the
case, the total effect of the evidence and the
documents produced before the court, any
basic infirmities, etc. However, at this stage,
there cannot be a roving enquiry into the
pros and cons of the matter and weigh the
evidence as if he was conducting a trial.
(iv) If on the basis of the material on record,
the court could form an opinion that the
accused might have committed offence, it can
frame the charge, though for conviction the
conclusion is required to be proved beyond
reasonable doubt that the accused has
committed the offence.
(v) At the time of framing of the charges, the
probative value of the material on record
cannot be gone into but before framing a
charge the court must apply its judicial mind
on the material placed on record and must be
satisfied that the commission of offence by
the accused was possible.
(vi) At the stage of Sections 227 and 228, the
court is required to evaluate the material and
documents on record with a view to find out if
the facts emerging therefrom taken at their
face value disclose the existence of all the
ingredients constituting the alleged offence.
For this limited purpose, sift the evidence as
it cannot be expected even at that initial
stage to accept all that the prosecution states
as gospel truth even if it is opposed to
common sense or the broad probabilities of
the case.
(vii) If two views are possible and one of
them gives rise to suspicion only, as
distinguished from grave suspicion, the trial
Judge will be empowered to discharge the
accused and at this stage, he is not to see
whether the trial will end in conviction or
acquittal.
From the above decisions, it is clear that at the initial
stage, if there is a strong suspicion which leads the Court
to think that there is ground for presuming that the
accused has committed an offence, in that event, it is not
open to the Court to say that there is no sufficient ground
for proceeding against the accused. A judicial magistrate
enquiring into a case Under Section 209 of the Code is not
to act as a mere post office and has to arrive at a
conclusion whether the case before him is fit for
commitment of the accused to the Court of Session. He is
entitled to sift and weigh the materials on record, but only
for seeing whether there is sufficient evidence for
commitment, and not whether there is sufficient evidence
for conviction. On the other hand, if the Magistrate finds
that there is no prima facie evidence or the evidence
placed is totally unworthy of credit, it is his duty to
discharge the accused at once. It is also settled law that
while exercising jurisdiction Under Section 227 of the
Code, the Magistrate should not make a roving enquiry
into the pros and cons of the matter and weigh the
evidence as if he was conducting a trial. This provision was
introduced in the Code to avoid wastage of public time and
to save the accused from unavoidable harassment and
expenditure. While analyzing the role of the Respondent
herein (A-6) from the charge sheet and the materials
supplied along with it, the above principles have to be kept
in mind.
13. In Rupan Deol Bajaj (Mrs.) and Anr. v. Kanwar Pal
Singh Gill and Anr.: (1995) 6 SCC 194, this Court has
considered the scope of quashing an FIR and held that it is
settled principle of law that at the stage of quashing an
FIR or complaint, the High Court is not justified in
embarking upon an enquiry as to the probability, reliability
or genuineness of the allegations made therein. By noting
the principles laid down in State of Haryana v. Bhajan Lal :
1992 Supp (1) SCC 335, this Court held that an FIR or a
complaint may be quashed if the allegations made therein
are so absurd and inherently improbable that no prudent
person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
14. In Mahavir Prashad Gupta and Anr. v. State of
National Capital Territory of Delhi and Ors.: (2000) 8 SCC
115, this Court considered the jurisdiction of the High
Court Under Section 482 of the Code and held as under:
5. The law on the subject is very clear. In the case of
State of Bihar v. Murad Ali Khan: (1988) 4 SCC 655 it
has been held that jurisdiction Under Section 482 of the
Code of Criminal Procedure has to be exercised
sparingly and with circumspection. It has been held that
at an initial stage a court should not embark upon an
inquiry as to whether the allegations in the complaint
are likely to be established by evidence or not. Again in
the case of State of Haryana v. Bhajan Lal: 1992 Supp.
(1) SCC 335 this Court has held that the power of
quashing criminal proceedings must be exercised very
sparingly and with circumspection and that too in the
rarest of rare cases. It has been held that the court
would not be justified in embarking upon an inquiry as
to the reliability or genuineness or otherwise of the
allegations made in the FIR or the complaint. It has
been held that the extraordinary or inherent powers did
not confer an arbitrary jurisdiction on the court to act
according to its whim or caprice.
15. Regarding conspiracy, Mr. Raval, learned ASG after
taking us through the averments in the charge sheet
based reliance on a decision of this Court in
Shivnarayan Laxminarayan Joshi and Ors. v. State of
Maharashtra: (1980) 2 SCC 465 wherein it was held
that once the conspiracy to commit an illegal act is
proved, act of one conspirator becomes the act of the
other. By pointing out the same, learned ASG
submitted that the Respondent herein (A-6), along with
the other conspirators defrauded the Bank's money by
sanctioning loans to various fictitious persons.
16. We have already extracted the relevant allegations
and the role of the Respondent herein (A-6). The only
allegation against the Respondent is that he submitted
false legal opinion to the Bank in respect of the housing
loans in the capacity of a panel advocate and did not
point out actual ownership of the properties. As rightly
pointed out by Mr. Venkataramani, learned senior
Counsel for the Respondent, the Respondent was not
named in the FIR. The allegations in the FIR are that A-
1 to A-4 conspired together and cheated Vijaya Bank,
Narayanaguda, Hyderabad to the tune of Rs. 1.27
crores. It is further seen that the offences alleged
against A-1 to A-4 are the offences punishable Under
Sections 120B, 419, 420, 467, 468 and 471 of Indian
Penal Code and Section 13(2) read with Section 13(1)
(d) of the Prevention of Corruption Act, 1988. It is not
in dispute that the Respondent is a practicing advocate
and according to Mr. Venkataramani, he has
experience in giving legal opinion and has conducted
several cases for the banks including Vijaya Bank. As
stated earlier, the only allegation against him is that he
submitted false legal opinion about the genuineness of
the properties in question. It is the definite stand of the
Respondent herein that he has rendered Legal Scrutiny
Reports in all the cases after perusing the documents
submitted by the Bank. It is also his claim that
rendition of legal opinion cannot be construed as an
offence. He further pointed out that it is not possible
for the panel advocate to investigate the genuineness
of the documents and in the present case, he only
perused the contents and concluded whether the title
was conveyed through a document or not. It is also
brought to our notice that LW-5 (Listed Witness), who
is the Law Officer of Vijaya Bank, has given a
statement regarding flaw in respect of title of several
properties. It is the claim of the Respondent that in his
statement, LW-5 has not even made a single comment
as to the veracity of the legal opinion rendered by the
Respondent herein. In other words, it is the claim of
the Respondent that none of the witnesses have
spoken to any overt act on his part or his involvement
in the alleged conspiracy. Learned senior Counsel for
the Respondent has also pointed out that out of 78
witnesses no one has made any relevant comment or
statement about the alleged involvement of the
Respondent herein in the matter in question.
23. A lawyer does not tell his client that he shall win
the case in all circumstances. Likewise a physician
would not assure the patient of full recovery in every
case. A surgeon cannot and does not guarantee that
the result of surgery would invariably be beneficial,
much less to the extent of 100% for the person
operated on. The only assurance which such a
professional can give or can be given by implication is
that he is possessed of the requisite skill in that branch
of profession which he is practising and while
undertaking the performance of the task entrusted to
him, he would be exercising his skill with reasonable
competence. This is what the person approaching the
professional can expect. Judged by this standard, a
professional may be held liable for negligence on one of
the two findings, viz., either he was not possessed of
the requisite skill which he professed to have
possessed, or, he did not exercise, with reasonable
competence in the given case, the skill which he did
possess.
24. In Jacob Mathew v. State of Punjab and Anr.:
(2005) 6 SCC 1 this Court laid down the standard to be
applied for judging. To determine whether the person
charged has been negligent or not, he has to be judged
like an ordinary competent person exercising ordinary
skill in that profession. It is not necessary for every
professional to possess the highest level of expertise in
that branch which he practices.
25. In Pandurang Dattatraya Khandekar v. Bar Council
of Maharashtra and Ors.: (1984) 2 SCC 556, this Court
held that "...there is a world of difference between the
giving of improper legal advice and the giving of wrong
legal advice. Mere negligence unaccompanied by any
moral delinquency on the part of a legal practitioner in
the exercise of his profession does not amount to
professional misconduct.
26. Therefore, the liability against an opining advocate
arises only when the lawyer was an active participant in
a plan to defraud the Bank. In the given case, there is
no evidence to prove that A-6 was abetting or aiding
the original conspirators.
27. However, it is beyond doubt that a lawyer owes an
"unremitting loyalty" to the interests of the client and it
is the lawyer's responsibility to act in a manner that
would best advance the interest of the client. Merely
because his opinion may not be acceptable, he cannot
be mulcted with the criminal prosecution, particularly,
in the absence of tangible evidence that he associated
with other conspirators. At the most, he may be liable
for gross negligence or professional misconduct if it is
established by acceptable evidence and cannot be
 charged for the offence Under Sections 420 and 109 of
Indian Penal Code along with other conspirators without
proper and acceptable link between them. It is further
made clear that if there is a link or evidence to connect
him with the other conspirators for causing loss to the
institution, undoubtedly, the prosecuting authorities are
entitled to proceed under criminal prosecution. Such
tangible materials are lacking in the case of the
Respondent herein.
28. In the light of the above discussion and after
analysing all the materials, we are satisfied that there is
no prima facie case for proceeding in respect of the
charges alleged insofar as Respondent herein is
concerned. We agree with the conclusion of the High
Court in quashing the criminal proceedings and reject
the stand taken by the CBI.
7. Learned counsel for the petitioners pointed
out that the petitioners were neither the loanee nor the
guarantor or conspirator in the illegality committed by the
loanee, and were merely lawyers, who had submitted
their professional advice regarding the documents in
question.
8. Learned counsel for the petitioners
emphasized the observations of the Hon’ble Supreme
Court in Central Bureau of Investigation, Hyderabad
(supra) that a lawyer does not tell his client that he shall
win the case in all circumstances. Likewise a physician
would not assure the patient of full recovery in every
case.
9. It has also been pointed out from the
precedent law that any wrongful opinion submitted by a
lawyer may subject him to the proceedings under
professional misconduct, but the same cannot result into
criminal prosecution of the lawyer.
10. Learned Public Prosecutor has pointed out
from the factual report that the investigation is complete,
but the charge-sheet could not be filed due to interim
order dated 06.12.2012 operating in favour of the
petitoners.
11. The factual report reveals all sorts of
allegations against the loanee for furnishing fraudulent
and unlawful documents. However, the factual report only
attributes the submission of non-encumbrance certificate
and investigation report on the part of both the
petitioners as Advocates for preparing such reports, even
when the documents were not correct.
12. After hearing learned counsel for the parties
and perusing the record of the case alongwith the factual
report submitted by the learned Public Prosecutor as well
as the precedent law cited at the Bar, this Court is of the
opinion that in totality, the only allegation against the
petitioners is that they were panel lawyers of the Bank
and were supposed to furnish their professional advice
regarding the documents submitted by the loanee.
13. The advice rendered by the petitioners has
apparently gone wrong, but such a wrong would not
entitle the respondent to prosecute a lawyer, as it does
not amount to any criminal culpability. The petitioners at
the most may be liable for gross negligence or
professional misconduct, if it is established by the
evidence, but they cannot be charged for the offences, as
alleged, alongwith the other conspirators.
14. It is not the case of the prosecution that the
petitioners were conspirators alongwith the loanee or had
direct link with them, so as to enter into the conspiracy to
cause loss to the Bank. If any such material was on
record, then of course, the prosecution could have
proceeded against the petitioners. But since there is no
such fact available on record, therefore, the prosecution
of the lawyers, merely on the basis of their professional
advice, cannot be sustained in the eye of law.
15. The Hon’ble Supreme Court in Central
Bureau of Investigation, Hyderabad (supra) also
observed that rendition of legal opinion cannot be
construed as an offence.
16. This Court also takes note of the fact that it is
not possible for the panel advocate to investigate the
genuineness of the documents and he can only peruse the
contents and conclude whether the title was conveyed
through a document or not, which has been done in this
case. It shall not be possible for a lawyer to render
professional advice, in case a wrong advice results into a
case for criminal prosecution against him, and in such
circumstances, the system of justice delivery shall suffer,
as lawyer being an important component of the justice
delivery system would not be able to give his professional
advice without fear and favour.
17. It is also not the case of the prosecution that
the petitioners were themselves involved in forgery or in
creation of illegal documents for committing fraud with
the Banking institution.
18. In light of the aforesaid discussions, this
Court deems it appropriate to allow the present
misc.petitions and the same are accordingly allowed. FIR
No.54/2009 registered at Police Station, Shastri Nagar,
Jodhpur for offences under Sections 420, 467, 468 and
471 IPC is quashed qua the present petitioners only. The
stay applications also stand disposed of. ”
6. In light of the aforequoted judgment, this misc. petition
is allowed and FIR No.164/03.08.16 P.S. Bajju, District Bikaner for
offences under Sections 420, 467, 468, 471 and 120-B of IPC is
quashed and set aside qua the petitioner.
(DR. PUSHPENDRA SINGH BHATI)J.

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