Advocate Can't Be Prosecuted For Financial Loss Caused Due To His Opinion Unless Intention To Defraud Is Present: Chhattisgarh HC

The Chhattisgarh High Court has observed that merely because an advocate's opinion has caused financial loss to a person or institution cannot be a ground for prosecuting him. A bench of Chief Justice Ramesh Sinha and Justice Amitendra Kishore Prasad added that there has to be some evidence that the said act was committed with the sole intention of defrauding the person/institution and with active participation by other conspirators. The division bench observed thus while allowing a plea under Section 482 CrPC moved by one Ramkinkar Singh, an advocate by profession, challenging the entire criminal proceedings, including the chargesheet and FIR against him. In brief, the petitioner was implicated in the FIR based on his role as an empanelled lawyer for the State Bank of India (SBI) at Bemetara. Essentially, the petitioner issued a non-encumbrance certificate for agricultural land mortgaged by a borrower, which was later used to secure a Kisan Credit Card loan of Rs. 3 lakhs. Later, the borrower failed to repay the loan, and investigations revealed that the land documents (based on which the loan was given) were forged. In August 2018, SBI's branch manager lodged an FIR alleging fraud by the borrower. In the supplementary chargesheet filed by the police, the petitioner was implicated in the case, wherein he was accused of certifying fraudulent documents. Earlier, the petitioner challenged the trial court's order framing charges against him by filing a revision petition, which was dismissed the petition without. Hence, he moved the HC. The petitioner's counsel argued that liability against an opining Advocate arises only when the lawyer was an active participant in a plan to defraud the Bank (referred to Supreme Court's ruling in the case of CBI, Hyderabad v. K. Narayana Rao 2019). Justifying the lower court's order, Deputy Advocate General Shashank Thakur, appearing for the State/respondent No. 1, argued that a prima-facie case was established against the petitioner as it was prima-facie established that the petitioner had prepared a false search report of the land mortgaged by the co-accused/borrower. It was also argued that the investigation had been conducted strictly in accordance with the law, wherein the statements of the witnesses had been recorded and the evidence/documents had been collected, which prima facie reveals an offence against the petitioner. The bank's counsel also supported the arguments made by the Dy.AG. Perusing the materials available on record, the division bench noted that the petitioner had only given a search report, and nothing on record suggested active connivance between him and other co-accused persons for defrauding the respondent bank. The Court further observed that it cannot be said that the petitioner performed his duties negligently to cause financial loss to the respondent Bank. Furthermore, the Court noted that the respondent bank retained the petitioner as their panel Advocate. The court said that if he had been negligent or untrustworthy, the respondent bank would certainly have removed him from its panel. Further, noting that the petitioner's name has surfaced in the supplementary charge sheet as he was not named in the FIR, the Court found the orders passed by the trial Court framing the charge against the petitioner and rejecting the revision petition deserved to be set aside qua the petitioner, especially in light of the order of the Apex Court in K. Narayana Rao (supra). Consequently, the orders impugned were set aside, and the application was allowed. Case title - Ramkinkar Singh vs. State Of Chhattisgarh and another Case citation : 2024 LiveLaw (CH) 47 Click here ToRead/Download Order

Advocate Can't Be Prosecuted For Financial Loss Caused Due To His Opinion Unless Intention To Defraud Is Present: Chhattisgarh HC

Sparsh Upadhyay

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