Advocates Owe Duty To Court, Must Advise Clients Against Dishonest Practises Even If It Doesn't Align With Client's Desired Outcome: Rajasthan High Court

The Rajasthan High Court recently observed that an advocate should not blindly follow the instructions of clients if they are unethical, illegal, or contrary to the principles of justice.

The said observation was made by the single judge bench of Justice Anil Kumar Upman while hearing a miscellaneous petition under Section 482 of CrPC seeking quashing of an FIR for offences under Sections 409, 420, 468, 471 and 120B of IPC.

The bench further noted: “If a client's instructions are in violation of these ethical guidelines or if they involve engaging in dishonest or unethical practices, it is the duty of the advocate to advise the client against such actions. Advocates are expected to provide honest and unbiased advice to their clients, even if it may not align with the client's desired outcome. Furthermore, an advocate's duty is not only towards their clients but also towards the court and the administration of justice.”

Background

The facts of the case reveal that the complainant-respondent No.2, submitted a complaint under Section 156 (3) of CrPC before the Metropolitan Magistrate, Jaipur alleging that the petitioner induced him into delivering material against advanced payment by raising proforma invoices. It was alleged in the complaint that he paid the advance amount but neither the petitioner supplied the material nor returned the advance amount to him. The complainant also alleged in the complaint that the petitioner made fraudulent entries in the books of accounts and usurped his money.

The trial court sent the matter to the police for investigation whereupon the impugned FIR was registered against the accused-petitioner for offences under Sections 409, 420, 468, 471 and 120B of IPC.

The Court observed that from perusal of the impugned FIR one fact is well established that the petitioner and the complainant have enjoyed a mutually beneficial business relationship for a significant period of time.

“Perusal of the record clearly indicates that several business transactions took place in between the petitioner and the complainant from 2017 to 2022. The complainant in this FIR alleged that on 29.09.2017, he made advance payment of Rs.23,29,000/-, 25,00,000/- (total Rs.48,29,000/-) in favour of the petitioner, but neither the goods were supplied to him nor margin money was paid to him as the accused petitioner, with intention to cheat him, made forged invoices as the petitioner was not having any stock with him,” the Court noted.

The Court observed that the existence of such long-standing business relations raises questions regarding the credibility and motivation behind the complainant's decision to initiate criminal proceedings against the petitioner. The Court further observed that throughout their business relationship, there have been no prior complaints or legal actions brought forth by either party against the other.

“A careful reading of the complaint, the gist of which this court has extracted above would show that none of the ingredients of any of the offences complained against the petitioner are made out. Even if all the averments contained in the FIR are taken to be true, they do not make out any of the offences alleged against the petitioner. Therefore, I am unable to understand how an FIR was registered and offences have been found proved. When FIR itself disclosed nothing more than a commercial relationship which broke, it is not possible for respondent No.2 to enlarge the scope of his complaint by merely adding the language used in the text of the Indian Penal Code,” the Court said.

The Court added that criminal prosecution should not be allowed when there is a long-standing business relationship between the parties without any complaint during the last five years.

The Court further emphasised upon the issue of criminalisation of civil disputes in India. The Court noted that it is quite common in Indian context to cloak a civil dispute of breach of contract with a criminal offence of cheating.

“There are multiple reasons as to why criminalisation of commercial disputes can be harmful to the legal system. Commercial disputes are often complex matters involving contractual agreements, business practices, and interpretations of trade laws and regulations. Resolving such disputes through criminal prosecution could lead to overly harsh punishments that may not fit the circumstances. Maintaining a clear separation between criminal law (designed to punish conduct that threatens public safety and welfare) and commercial law (designed to govern the fair conduct of business dealings) helps preserve the legitimacy and proper scope of each legal domain,” the Court said.

It was highlighted by the Court that even in cases where rendition of accounts is an important factor, there should be a strict bar to criminal remedy. The Court observed that it is a process that is quite common in businesses, criminalising such commercial offences will not only burden the courts but also halt several businesses.

The Court noted that nowadays, it has been noticed that the tendency to convert civil wrongs into criminal offences is growing and people are intended to settle civil or commercial disputes with the help of police.

“Need of the hour is to stop the inflow of frivolous criminal cases into the legal system. For this, the police should be advised to conduct preliminary enquiry into the case before filing an F.I.R. Advocates also simultaneously play an important role in preventing criminal frivolous litigation. A good advocate should never condone criminalisation of commercial matters. Courts should bring heavier sanctions against those who try and abuse the judicial system,” the Court remarked.

It was further observed by the Court that it is important to restore faith of citizens in civil remedies and steps like speedier resolution of civil disputes, growth of arbitral tribunals, etc, should be promoted.

On the role of advocates, the Court said:

“…….he is expected to adhere to high ethical standards and professional conduct. This includes being honest, diligent, and respectful towards the court, opposing counsel, and all parties involved in the legal proceedings. He has a basic responsibility to uphold the rule of law and promote justice. This involves advocating for fair and equal treatment of all individuals, irrespective of their social status, and ensuring that the principles of justice are upheld in the legal system. As a lawyer serving the Indian judiciary, it is crucial to prioritize the interests of justice and uphold the principles of professional ethics.”

The Court remarked that an advocate should not blindly follow the instructions of clients if they are unethical, illegal, or contrary to the principles of justice. Advocates have a duty to act in the best interests of justice and uphold the ethical standards set by the legal profession.

“Simultaneously, Courts should not hesitate in quashing the criminal proceedings which are essentially arising out of civil or commercial disputes between the two parties as held by the Hon'ble Apex Court in case of Paramjeet Batra (supra) and Dalip Kaur (supra). Police stations can/should not be allowed to work as recovery agent or to make pressure upon one party of the litigation in the garb of criminal investigation to settle the civil disputes,” the Court said.

Thus, the Court quashed the impugned PIR and subsequent proceedings against the petitioner on the ground that continuance of proceedings of the impugned FIR would amount to abuse of process of law.

Case Title: Simara Foods Pvt. Ltd. v. State of Rajasthan & Anr.

Case No.: S.B Criminal Miscellaneous Petition No. 4109/2023

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