Can a lawyer be prosecuted for wrong search report to the bank?

Can a lawyer be prosecuted for wrong search report to the bank?

क्या बैंक को गलत सर्च रिपोर्ट देने के लिए वकील पर मुकदमा चलाया जा सकता है?


HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 2786 / 2017
Rajendra Singh V  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 increasing the documents for providing the loan to the persons who brought the
documents. Since, it is a choice and prerogative of the bank either today 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.

नोट :- आपकी सुविधा के लिए इस वेबसाइट का APP-CIVIL LAW- GOOGLE PLAY STORE में अपलोड किया गया हैं जिसकी उपर दी गयी हैं। आप इसे अपने फ़ोन में डाउनलोड करके ब्लॉग से नई जानकारी के लिए जुड़े रहे।