Professional Ethics Case

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

PROFESSIONAL
ETHICS
PROJECT REPORT ON CASE LAW
BAR COUNCIL OF ANDHRA

PRADESH
v.
KURAPATI SATYANARAYANA
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SESSION (2014-2015)
BEFORE THE HONBLE SUPREME COURT OF

INDIA
BAR COUNCIL OF ANDHRA PRADESH

(PETITIONER)
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Versus
KURAPATI SATYANARAYANA
(RESPONDENT)
CASE RELATED TO THE PROFESSIONAL MISCONDUCT BY AN

ADVOCOTE UNDER THE ADVOCATES ACT, 1961
DATE: 15TH November 2002

CITATION: AIR 2003 SC 175
BENCH: V. N. Khare & Ashok Bhan
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ACKNOWLEDGEMENT
I wish to convey my greatest appreciation to Ms. Imrose Tiwana, our
professor and great mentor, who challenged and organized my thoughts
and helped convert them to the written words.
I would also like to thank University Institute of Legal Studies,
Panjab
University,
Chandigarh,
for
their
initial
faith
and
encouragement that I submit my project report.

I am indebted to my friends and other family members for providing
kindness and help in making this project.
PUNEET JAIN
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TABLE OF CONTENTS
STATEMENT OF FACTS.................
.....6 - 7
ISSUE
RAISED..
..7
SUMMARY OF
ARGUMENTS................................................................
8-9
JUDGEMENT OF THE CASE..

..........10 - 11
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STATUTORY LAW....
................12 - 13
POSITION OF LAW BEFORE THE

JUDGEMENT............................13 - 14
SIGNIFICANCE OF THE
JUDGEMENT.....................................................14
POSITION IN
AMERICA............................................................................ 15
CRITICAL
APPRAISAL...................................................................
............16
APPENDIX........................................................................................
................
TABLE OF CASES REFFERED

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Bar Council of Maharashtra v. M. V. Dabholkar and

others
Harish Chandra Tiwari v. Baiju
Re: An Advocate v. Unknown
Re Addams
Re Lennan
Smt. Siya Bai v. Sita Ram
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STATEMENT OF FACTS
1. The Bar Council of Andhra Pradesh has filed this appeal against the order of the
Disciplinary Committee of the Bar Council of India dated 28 th March, 1999 by
which the Bar Council of India has set aside the order passed by the State Bar
Council removing the name of the Kurapati Satyanarayana from the roll of the
State Bar Council as he was found guilty of grave professional misconduct in
discharge of his duties.
2. Initially, O.S. No 1624 of 1991 was filed by the Shri. Gutta Nagabhushanam on
the file of the Additional District Munsif Magistrate. The said suit was decreed
and the Execution Petition No. 112 of 1995 was instituted for realization of the
decretal amount1. Mr. K. Satyanarayana was engaged as counsel by Shri. G.
Nagabhushanam in the execution proceedings.
3. K. Satyanarayana received a total sum of Rs. 14600/- on various dates in the
execution proceedings but he did not make the payment of same to Shri. G.
Nagabhushanam. Hence, on 18th October, 1996 Shri. G. Nagabhushanam filed a
complaint with the Additional District Munsif, who then transferred the matter to
the Bar Council of Andhra Pradesh.
4. The complaint filed and important documents were forwarded to the state Bar
Council and Mr. K. Satyanarayana chose not to file a counter. Hence the matter
went to its Disciplinary Committee which after examining the witnesses
1 It is an amount pertaining to the decree of the court.
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produced came to the conclusion that Mr. K. Satyanarayana received the total
sum of Rs. 14600/- belonging to Shri. G. Nagabhushanam and retained the same
with him. Hence, the disciplinary committee of the State Bar Council
concluded that the advocate had retained the money with him and was thus
guilty of professional misconduct. He was directed to return the money to the
complainant.
5. K. Satyanarayana asserted that he had informed Shri. G. Nagabhushanam through
a post card about the receipt of the decretal amount and that on 24 th April, 1996
he paid Rs. 11000/- to Shri. G. Nagabhushanam. However, these were not
accepted by the Disciplinary Committee as Mr. K. Satyanarayana failed to
produce any evidence proving the payment of the sum of Rs. 11000/-.
6. K. Satyanarayana then filed an appeal before the Disciplinary Committee of
the Bar Council of India. The Disciplinary Committee of the BCI agreed with
the finding of fact recorded by the State Bar Council that Mr. K. Satyanarayana
failed to pay the amount of Rs. 14600/- received by him on the behalf of Shri. G.
Nagabhushanam in the execution proceedings but came to the conclusion that
Mr. K. Satyanarayana did not commit any professional misconduct though there
might have been some
negligence on his
parthttp://lawlex.org/lex-
bulletin/case-note-bar-council-andhra-pradesh-vs-kurapatisatyanarayana/11688 - _ftn4.
7. The Disciplinary Committee of BCI observed that the conduct of the appellant
shows that Mr. K. Satyanarayana never refused to return the money the same and
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also he had made part payment of the total amount. Perusal of the file shows that
Mr. K. Satyanarayana could not make the payment of the remaining amount
because of his family circumstances as the remaining amount was utilized by him
in his treatment. The Committee concluded that Mr. K. Satyanarayana never
wanted to misappropriate the decretal amount and hence, the BCI set aside the
State Bar Councils order holding that the delinquent had not committed
any professional misconduct though there might have been some negligence
on his part, which did not involve any moral turpitude.
8. The Bar Council of Andhra Pradesh has filed this appeal against the aforesaid
order of the Disciplinary Committee of the Bar Council of India.
ISSUES RAISED
1. Whether or not retaining clients money in this case amounts by an advocate
amounts to professional misconduct?
2. Whether or not in this case retaining clients money is just negligence on the part
of K. Satyanarayana?
3. Whether or not K. Satyanarayana is guilty of professional misconduct2 ?
2 http://indiankanoon.org/doc/1301307/
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SUMMARY OF ARGUMENTS
The appellant Bar Council of Andhra Pradesh filed appeal petition against the
order of the Bar Council of India which set aside its order of removing the name
of K. Satyanarayana from the State roll as it was of view that he committed one
of the gravest professional misconduct as he retained money belonging to Shri.
G. Nagabhushanam.
The point which was raised by the respondent that the appeal filed by the Bar
Council of Andhra Pradesh is not maintainable as it is not the person aggrieved
so this appeal is not maintainable.
The complaint filed by the de-facto complainant along with the reply filed by the
Delinquent and the connected documents were forwarded to the Bar Council of
the Andhra Pradesh in the High Court premises for appropriate action. The State
Bar Council took notice of the complaint filed and issued a notice to the
Delinquent. The Delinquent in spite of the service of notice did not choose to file
a counter.
The State Bar Council referred the matter to its Disciplinary Committee. The
State Disciplinary Committee after examining the witnesses produced by the
complainant came to the conclusion that the Delinquent had received a total sum
of Rs. 14,600/- belonging and payable to the de-facto complainant on different
dates and retained the same with him.
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Assertion of the Delinquent that he had informed the complainant through a postcard about the receipt of the decretal amount was not accepted. That in spite of an
undertaking (Ex.C-1)dated 24th April, 1996 given in writing by the Delinquent to
pay a sum of Rs. 11,000/- to the complainant, the same was not paid. The story
put-forth that he paid a sum of Rs. 11,000/- on 4th September, 1996 was not
accepted because the Delinquent failed to produce any receipt given by the
complainant evidencing the payment of the said amount to the complainant. It
was noted that only on 19th August, 1997 a demand draft No. 808327 of Rs.
3,600/- and a demand draft No. 0142169 dated 17th October, 1997 for Rs. 2,900/drawn on State Bank of Hyderabad in favour of the complainant were sent. The
Committee directed that the said two drafts be forwarded to the complainant
without prejudice to his any other right, if any. It was specifically mentioned that
the payment of the said two amounts would not obliterate the misconduct of the
Delinquent.
The Delinquent preferred an appeal before the Disciplinary Committee of the Bar
Council of India. The Disciplinary Committee of the Bar Council of India agreed
with the finding of fact recorded by the Disciplinary Committee of the State Bar
Council that the Delinquent had failed to make the payment of Rs. 14,600/received by the Delinquent on behalf of the complainant in the execution
proceedings, but came to the conclusion that the Delinquent had not committed
any professional misconduct though there might have been some negligence on
his part which did not involve any moral turpitude. For coming to this
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conclusion, the Disciplinary Committee of the Bar Council of India recorded the
following findings: "One thing is very clear from the conduct of the appellant
that no doubt, he had withdrawn the money on behalf of the complainant being
his counsel, but he never refused to return the same to the complainant. It has
also come in evidence that the appellant had made part payment of the total
amount before filing of the present complaint by the complainant before the
Disciplinary Committee of Andhra Pradesh. Perusal of the file shows that the
appellant could not make the payment of the remaining amount because of his
family circumstances. There seems to be weight in the arguments of the appellant
to the effect that he could not make the payment of the remaining amount to the
complainant as the said amount was utilised by him on his treatment. This type of
events are very common when some body is in trouble. At this stage, we are to
see as what was the intention of the appellant with respect to utilisation of the
said amount. We are to see whether he had the intention of misappropriating the
money of his client in order to defraud him or he was compelled by the
circumstances in not returning the said amount as and when demanded by the
complainant.
During the course of arguments it was brought to the notice that the appellant had
already returned the total decretal amount with interest to de-facto complainant.
He has further brought to the notice that he was still suffering from serious heart
ailment and he has also sought appointment with a doctor for undergoing surgery
in near future. The Committee is of the considered view that the appellant from
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the very beginning never wanted to misappropriate the decretal amount of the defacto complainant and the lapse on his part to return the same was because of his
domestic circumstances, as explained
JUDGEMENT OF THE CASE
The Supreme Court said that the pleading of the point raised by the respondent
that the appeal filed by the Bar Council of Andhra Pradesh is not maintainable
need not be dilated as seven Judge Constitution Bench of this Court held in Bar
Council of Maharashtra v. M. V. Dabholkar and others 3, that the role of Bar
Council is of dual capacity, one as the prosecutor through its Executive
Committee and the other quasi-judicial performed through its Disciplinary
Committee.
The Supreme Court said that the finding of the BCI that there was no
intention on the part of the advocate to misappropriate the money of his
client was not only unfounded and perverse but also lacked the serious
thought which was required to be given to the disciplinary committee of the BCI
in the discharge of quasi-judicial functions while probing into such grave
instances.
3 1976 AIR 242, 1976 SCR (2) 48

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Further, it said that it was neither pleaded nor shown that Mr. K. Satyanarayana
was in dire financial difficulty which promoted him to utilize the decretal amount
for his treatment which was with him in trust. This is an act of breach of trust.
It said that we are firmly of the view that such types of excuses cannot be
entertained being frivolous and unsustainable.
Bench comprising Justice V. N. Khare and Justice Ashok Bhan said adherence
to correct professional conduct in the discharge of ones duties as an advocate is
the backbone of legal system. Any laxity while judging the misconduct which is
not bona fide and dishonest advocate would undermine the confidence of the
litigant public resulting in the collapse of legal system.
The Supreme Court referred to the case of Harish Chandra Tiwari v. Baiju4, in
which it was held that Amongst the various types of misconduct envisaged for a
legal practitioner the misappropriation of the clients money must be regarded as
one of the gravest.In his professional capacity, the legal practitioner has to
collect money from the client towards expenses of the litigation or withdraw
money from the Court payable to the client or take money of the Client to be
deposited in Court. In all such cases, when the money of the client reaches his
hand it is a trust. If a public servant misappropriates money he is liable to be
punished under the present Prevention of Corruption Act, with imprisonment
which shall not be less than one year. He is certain to be dismissed from service.
But if an advocate misappropriates money of the client there is no justification in
4 (2002) 1 UPLBEC 313

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de-escalating the gravity of the misdemeanour. Perhaps the gravity of such

breach of trust would be mitigated when the misappropriation remained only for
temporary period. There may be a justification to award a lesser punishment in a
case where the delinquent advocate the money before commencing the
disciplinary proceedings.
The finding of the Disciplinary Committee of the Bar Council of India that there
was no intention on the part of the Delinquent advocate to misappropriate the
money of his client or to de-fraud him is not only unfounded and perverse but
also lacks the serious thought which was required to be given by the Disciplinary
Committee of the Bar Council of India in the discharge of quasi-judicial function
while probing into the grave charge of professional misconduct by an advocate in
the discharge of his duties as a counsel.
Setting aside the BCIs order, the Bench said that the conduct of the
delinquent, who is an elderly gentleman, is reprehensible and is unbecoming
of an advocate. It deeply pains us that the delinquent who claimed to have
practised for three decades and has worked as Government advocate for
four years should have been guilty of such serious misconduct.
Hence, the Supreme Court has upheld an order of the Andhra Pradesh Bar
Council removing the name of a lawyer from its rolls after he was found guilty
of grave professional misconduct in the discharge of his duties and also the
appellant shall be entitled to the costs of this appeal, which was assessed as
Rs. 5000/-.
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STATUTORY LAW
An advocate is the most accountable, privileged and erudite person of the society
and his acts are role model for the society, which are necessary to be regulated.
Professional misconduct is the behaviour outside the bounds of what is
considered acceptable or worthy of its membership by the governing body of a
profession. Professional misconduct refers to disgraceful or dishonourable
conduct not befitting an advocate.
The Advocates Act, 1961 as well Indian Bar Council are silent in providing
exact definition for profession misconduct because of its scope, though under
Advocate Act, 1961 to take disciplinary action punishment are prescribed when
the credibility and reputation on the profession comes under a clout on account of
acts of omission and commission any member of the profession.
Chapter V of the Advocate Act, 1961, deals with the conduct of Advocates. It
describes provisions relating to punishment for professional and other
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misconducts. Section 35(1)5 of the Advocate Act, 1961, proviso says, is relevant
in this context6. This proviso say, where on receipt of a complain otherwise a
State Bar Council has reason to believe that any advocate on its roll has been
guilty of professional or other misconduct, it shall refer the case for disposal to it
disciplinary committee.
Under Section 35 of the Act, the State Bar Council is empowered to initiate
proceedings against an advocate for misconduct, either on a complaint or on its
own. The Bar Council of India under Section 36 can likewise initiate such
proceeding and also has the power to withdraw such proceedings pending before
any State Bar Council and inquire into such cases on its own. If misconduct is
proved in such case before the Bar Council such action may be taken, such as
suspension of practice for a period, or in grave cases striking the name of such
advocates of the roll. In such cases the advocate can prefer an appeal to the Bar
Council of India, and further to the Supreme Court under section 37 and 38
respectively. It is noteworthy that the Act does not provide for withdrawal of
complaint. A complaint once filed cannot be withdrawn and the process of
inquiry once set in motion cannot be stopped.
5 Section 35(1) of The Advocates Act 1961 :

Where on receipt of a complaint or otherwise a State Bar Council has reason to believe that any
advocate on its roll has been guilty of professional or other misconduct, it shall refer the case for
disposal to its disciplinary committee. 1[(1A) The State Bar Council may, either of its own motion or
on application made to it by any person interested, withdraw a proceeding pending before its
disciplinary committee and direct the inquiry to be made by any other disciplinary committee of that
State Bar Council.]
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Part-VI, Chapter- II of the Bar Council of India Rules provide Standards of

Professional Conduct and Etiquette for advocates. Rule 24 of the aforesaid
Chapter provides that an advocate shall not do anything whereby he abuses
or takes advantage of the confidence reposed in him by his client and then
Rule 25 says that an advocate should keep accounts of the clients money
entrusted to him. Further Rule 27 provides that where any amount is received or
given to him on behalf of his client, the fact of such receipt must be intimated to
the client, as early as possible7.
POSITION
OF
LAW
BEFORE
THIS
JUDGMENT
In the case of Smt. Siya Bai v. Sita Ram8, the advocate withdrew the decretal
amounts paid and did not make the payment to the client. He pleaded that the amount
withdrawn was adjusted towards the fee and other expenses but it was not found true
and not accepted and therefore, found guilty of professional misconduct for illegally
retaining the amount. The Disciplinary Committee of the Bar Council of India
ordered the advocate to refund the money to the complainant along with the 10%
interest per annum and also ordered suspension of advocate for a period of one year.
7 http://www.barcouncilofindia.org/wp-content/uploads/2010/05/BCIRulesPartVonwards.pdf
8 BCI Trust, Selected Judgments on Professional Ethics, p.28
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Also, Kerala High Court In Re: An Advocate v. Unknown9, it was found that the
Advocate had withdrawn Rs. 270/- deposited by the judgment-debtor in the case for
payment to the complainant-decree-holder as per the Debt Relief Act, but has not
paid the same to the complainant in spite of repeated demands and a registered notice
through counsel and it was held by the Court that It is the imperative duty of the
counsel on receipt of the clients money, to inform the client thereof and pay him
without any delay the amount under receipt. For non-fulfillment of this duty on the
part of the counter-petitioner we suspend him from practice for a period of six
months with effect from the date of service on him of a copy of this order by the
learned Munsiff of Pathanamthitta in whose court he is reported to be practising.
Hence, from the above judgments, we can see that earlier also, retaining and
misappropriation of Clients money by an advocate was held to be a
professional misconduct by the Disciplinary Committee of BCI and the Honble
High Court and now also, Supreme Court has held it to be one of the gravest
professional misconducts by an advocate. So, we can say that there is no
significant change in the position of law before the judgment was passed and
after it.
SIGNIFICANCE OF THE JUDGMENT
9 AIR 1961 Ker 209

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The Supreme Court in this case reiterated the observations made in Bar Council
of Maharashtra v. M.V. Dabholkar and others10 that the role of Bar Council is
of dual capacity, one as the prosecutor through its Executive Committee and the
other quasi-judicial performed through its Disciplinary Committee. Hence, being
the prosecutor, the State Bar Council would be an aggrieved person and
therefore, the appeal under section 38 of the Advocates Act, 1961 would be
maintainable.
The Supreme Court also reiterated the principle that Misappropriation of

clients money is an act of grave misconduct.
It was observed by the Honble Supreme Court that this is an act of breach of
trust. Advocate is the backbone of legal system. Any laxity while judging the
misconduct which is not bona fide and dishonest advocate would undermine the
confidence of the litigant public resulting in the collapse of legal system.
POSITION IN AMERICA
10 1976 AIR 242, 1976 SCR (2) 48
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Disciplinary Rule [DR] 9-102 of the American Bar Association (ABA) Code requires
that client funds should be deposited and maintained in a separate bank account apart
from funds belonging to the lawyer or law firm. The Disciplinary Rules are
mandatory in character. They state the minimum level of conduct below which no
lawyer can fall without being subject to disciplinary action.
The New Jersey Supreme Court in In re Lennan11 reaffirmed the rule that
misappropriation will trigger automatic disbarment. Moreover, the court in Lennan
essentially stated that no mitigating circumstances would prevent disbarment where
the attorney knowingly misappropriates funds.
Moreover, In re Addams12, Washington D.C. Court of Appeals held that except
where the misappropriation is the result of simple negligence, virtually in all cases of
misappropriation, disbarment will be the appropriate action 13. Hence, we can see
that position of law in America and in India in case of misappropriation of
clients money is almost same.
CRITICAL APPRAISAL
The role of the lawyers in the society is of great importance. They being part of the
system of delivering justice holds great reverence and respect in the society. Each
individual has a well defined code of conduct which needs to be followed by the
11 102 N.J. 518, 509 A.2d 179 (1986)
12 579 A.2d 190, 191 (D.C. 1990)
13 http://www.ibtimes.com/lawyer-who-misappropriated-funds-clients-interest-spared-disbarment259213
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person living in the society. A lawyer in discharging his professional assignment has
a duty to his client, a duty to his opponent, a duty to the court, a duty to the society at
large and a duty to himself. It needs a high degree of probity and poise to strike a
balance and arrive at the place of righteous stand, more so, when there are conflicting
claims. While discharging duty to the court, a lawyer should never knowingly be a
party to any deception, design or fraud. While placing the law before the court a
lawyer is at liberty to put forth a proposition and canvass the same to the best of his
wits and ability so as to persuade an exposition which would serve the interest of his
client and the society.
APPENDIX
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BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BEFORE THE HONBLE SUPREME COURT OF

BAR COUNCIL OF ANDHRA PRADESH

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

CASE RELATED TO THE PROFESSIONAL MISCONDUCT BY AN

DATE: 15TH November 2002

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

encouragement that I submit my project report.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

JUDGEMENT OF THE CASE..

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

POSITION OF LAW BEFORE THE

TABLE OF CASES REFFERED

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

Bar Council of Maharashtra v. M. V. Dabholkar and

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

JUDGEMENT OF THE CASE

3 1976 AIR 242, 1976 SCR (2) 48

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

4 (2002) 1 UPLBEC 313

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

de-escalating the gravity of the misdemeanour. Perhaps the gravity of such

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

5 Section 35(1) of The Advocates Act 1961 :

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

Part-VI, Chapter- II of the Bar Council of India Rules provide Standards of

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

SIGNIFICANCE OF THE JUDGMENT

9 AIR 1961 Ker 209

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

The Supreme Court also reiterated the principle that Misappropriation of

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

BAR COUNCIL OF ANDHRA PRADESH v KURAPATI SATYANARAYANA.

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