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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