The Chhattisgarh High Court, in one of its recent judgment pronounced has held that an Advocate cannot be prosecuted for criminal offenses for non-exhibiting greater professional care and competence while submitting the non-encumbrance certificate to a Bank.

The judgement came out in case Subha Jakkanwar v/s State of Chhattisgarh.

CASE BACKGROUND

The petitioner has filed the petition under  Section 482 of the CrPC for checking the legality, validity and correctness of the charge­sheet filed against her.

The circumstances that led to filing a cheatsheet against her are as following:

Ten borrowers made application to Dena Bank under the scheme of Kisan Credit Card for granting loan on which the concerned Bank requisitioned non­encumbrance certificate from the petitioner herein who was an empaneled Advocate of Dena Bank on that day. It was stated by her that certified qua the lands held by the borrowers that they have clear, marketable title to the property free from all encumbrances against which they had applied for a loan and accordingly, they were granted the loan. 

The borrowers failed to repay the loan amount and it was revealed in the inquiry that documents submitted by the borrowers were false and fabricated. Thus accordingly, Manager of the Bank made FIR that held all ten as accused. It was in the second FIR that the petitioner has been named on the grounds that she is an Advocate and is also empanelled Advocate of Dena Bank at the relevant point of time and she has given non­encumbrance certificate of legal scrutiny and she has certified Rin Pustika & Khasra Panchshala submitted along with the application for grant of loan to be true and issued non­encumbrance certificate and thereby, she has also committed the offence.

During the hearing, her Learned Counsel submitted that no offense punishable under Sections 420, 467, 468, 471 & 120B of the IPC is made out against the petitioner, as the ingredients and elements of the said offenses are clearly missing in the charge­sheet along with that of criminal conspiracy.

He relied upon the judgment of the Supreme Court in the matter of Central Bureau of Investigation, Hyderabad v. K. Narayana Rao to support his submission.

On the other hand, Learned Counsel of the State submitted that the petitioner didn't perform her professional duty properly and has submitted a false non­encumbrance certificate and thus she is criminally liable.

The Court upon hearing both the Counsels held that though the Advocate had issued non­encumbrance certificate she had also recommended some safeguards to be observed by the Bank while granting the loan to the borrowers.

COURT OBSERVATIONS

The Court stated:

"It is well-settled law that extending a legal opinion for granting loans has become an integral component of an advocate's work in the banking sector.  A lawyer, on his part, has a responsibility to act to the best of his knowledge and skills and to exhibit an unending loyalty to the interest of his clients. He has to exercise his knowledge in a manner that would advance the interest of his clients.  However, while acting so the advocate does not assure his client that the opinion so rendered by him is flawless and must in all possibility act to his gains. Just like in any other profession, the only assurance which can be given and may even be implied from an advocate so acting in his professional capacity is that he possesses the requisite skills in his field of practice and while undertaking the performance of the task entrusted to him, he would exercise his skills with reasonable competence. The only liability that may be imputed on an advocate while so acting in his professional capacity is that of negligence in the application of legal skills or due exercise of such skills."

The Court cited the Supreme Court's judgement in the Central Bureau of Investigation, Hyderabad v. K. Narayana Rao in which it was held that the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank. 

It applied the principle of law laid down by the Supreme Court on the present case and also remarked that there is no evidence on record or fact that confirms criminal conspiracy on part of the petitioner Advocate.

The Court then cited the principle of law laid down by Supreme Court in the matter of State of Haryana and Others v. Bhajan Lal and others regarding the extraordinary power of quashing criminal proceeding which states:

“(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offense or make out a case against the accused.  
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of   the   same   do   not   disclose   the   commission   of   any offense and make out a case against the accused.”
     

It thus accordingly quashed the criminal charges against the petitioner.

The judgement has been delivered by Judge Sanjay K. Agrawal on 15.11.2019.

Read Judgement Here:

 

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