Holding

The Supreme Court held that the advocate misappropriated the funds and, in accordance with the gravity of the misconduct, struck his name off the roll and ordered restitution.

Summary

The respondent engaged the appellant as counsel in a suit that was later compromised, directing the appellant to withdraw Rs 50,379 from the court receiver and remit the amount to the respondent. The appellant withdrew the money but paid only Rs 18,000, retaining the balance. A complaint was filed before the Bar Council of India, whose Disciplinary Committee suspended the appellant for two years and ordered a nominal payment of Rs 500, finding the evidence of payment unconvincing. The appellant appealed to the Supreme Court under Section 38 of the Advocates Act, challenging the Committee’s findings and the adequacy of the punishment. The Supreme Court held that the appellant had misappropriated the funds, disbelieved the receipts, and that the appropriate punishment for such serious professional misconduct is striking the advocate’s name off the roll, also directing a decree for restitution of Rs 22,379 with interest. The appeal was dismissed with costs awarded to the respondent.

Issues considered

Whether the Disciplinary Committee of the Bar Council properly appreciated the evidence of payment and correctly imposed a two‑year suspension.
Whether the appellant misappropriated the amount withdrawn from the court receiver.
Whether, under Section 38 of the Advocates Act, 1961, the Supreme Court may vary the punishment and order restitution.
What is the appropriate punishment for an advocate found guilty of misappropriation of client funds?

Legislation cited

Advocates Act, 1961s. 36, s. 37, s. 38

Subjects

misappropriationprofessional misconductadvocates actdisciplinary committeebar councilpunishmentstriking offrestitutionsection 38legal ethics

Judgment

A J.S. JADHAV
v.
MUSTAFA HAJI MOHAMED YUSUF AND OTHERS

APRIL 7, 1993

B (KULDIP SINGH AND S. MOHAN, JJ.)

-
Aftvocacy-Significance of profession-Punishment whether to be com-
mensurate with the degree and gravity of misconduct.

Advocates Act, 1961-Section 38--Appeal--Misappropriation--Proof
c of-Enhancement of punishment and direction of Supreme Court to refund
of amount pending with advocat&--Legality of ,,.
The respondent was defendant in a suit. He engaged the appellant
as an Advocate. The suit was compromised on 14.6.77 ordering that out of
D the amount lying with the Court receiver, plaintiff was to be paid a sum of
Rs. 64,000 and the balance to be paid to the defendant-responden\ and
possession of suit-property to be handed over to the respondent.
~
.
During the tendency of the suit the Court Receiver inducted a tenant

E
in a suit property. The tenant filed a suit praying for an interim injunction
restraining the court receiver from handing over possession to the respon~
_..
dent. Tenant's suit was continued.

After the compromise decree was passed on 14.6.77, the appellant
withdrew a total amount of Rs. 50,379 from the Court receiver. Out of the
amount, appellant paid only Rs. 18,000 to the respondent. On 9.1.81 the
F respondent filed a complaint against the appellant before the Bar Council
of India. On receiving a notice, the appellant submitted reply. y
The Disciplinary Committee of the Bar Council rejected certain
receipts produced to evidence payment to the respondent and also the plea
of the appellant that the account books were lost. The Committee
G
suspended the appellant for a period of two years and further directed to
pay a sum of Rs. 500 to the respondent. _,.\·
9
Before this Court the order of the Disciplinary Committee c~ the Bar
'
Council of India was challenged contending that the Committee did not
H properly appreciate the e.-;dence and that it was incorrect to hold that the
!
1006
J.S. JADHAV i-. MUSTAFA HAJI" 1007

receipt dated 8.8.77 was a suspicious document merely because the ac- A
count books were not produced.

Dismissing the appeal, this Court,

lo( HELD : 1.01. Advocacy is not a craft but a calling; a profession
wherein devotion to duty constitutes the hall mark. Sincerity o( perfor- B
mance and the earnestness of endeavour are the two wings that will bare
aloft the advocate to the tower of success. Given these virtues other

- qualifications will follow of their own account. This is the reason why legal
profession is regarded to be a noble one. But it cannot be allowed to
become a sorriest of trades. Therefore, an exacting standard is what is
expected of an advocate. [1010 C·D; 1011-C]
c
1.02. The members of the noble profession must set an example of
conduct worthy of emulation. If any of them falls from the high expecta-
tions, the punishment has to be commensurate with the degree and gravity
of the misconduct. (1012-E] D
Sharasawood Oil legal professioll; Harry R. Blythe cited ill 21 Green
Bag 224, referred to.

M. Veerabhadra Rao v. Tek Cha/lli, (1984] S1;pp. SCC 571, referred
to. (1011-C] E

-
2.01. The appellant had withdrawn the money from the Court
Receiver. None of the correspondence addressed to the respondent men-
tioned about the receipt dated 8th of August, 1977. The plea taken by the
appellant based on the receipt is clearly false. The statement of the
appellant that the account books had been lost in transit cannot be F
-,_ believed. Under these circumstances this is a clear case wherein the
misappropriation by the appellant has been fully established. (1012-F]

2.02. The appellant has been withdrawing the money over 14 years
and ht has illegally retained the amount. Out of a .sum of Rs. 50,379 which G
was admittedly withdrawn fro" the court receiver only Rs. 18,000 was paid
on different occasions. Still a sum of Rs. 22,s379 is due. (1012-H, 1013-A)

2.03. In view of the established finding of misappropriation the
proper punishment will be the name of the Advocate must be struck off
the rolls. (1013-B) H
1008 SUPREME COURT REPORTS [1993) 2 S.C.R. - -(

A 2.114. When Section 38 of the Adv0<:ates Act says, "deems lit', it must
be construed as to meet the ends of justice. The respondent should not be
driven to a civil court for recovery of this amount even when the appellant
has been found guilty. Therefore, it is directed that there shall be a decree
in favour of the respondent (complainant) for a sum of Rs. 22,379 together
B with interest at 9% per annum from the date of the complaint till the date
of payment. [1013 F-GJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6120 of
1983. -
C From the Judgment and Order dated 25.4.1983 of the Disciplinary
Committee of the Bar Council of India in B.C.I. Tr. Case No. 32 of 1982.

Bharat Sangal for the Appellant.

V.R. Reddy, Addi. Solicitor General, T. Ratnam.and D.N. Goburdhan
D for the Respondents.

The Judgment of the Court was delivered. by

MOHAN, J. This is a statutory appeal under Section 38 of the
Advocates Act of 1961.
E
The brief facts are as dnder:-

F
The respondent engaged the appellant as a counsel in suit No. 510
of 1964, this was in April, 1976. The suit Was ultimately compremised on
14.6.77. It was ordered that out of the total amount lying with the court
receiver, a sum of Rs. 64,000 shall be paid over to the plaintiff; the balance
-
was to be paid to the respondent and possession of suit property was to be
handed over to the respondent by the court receiver.

During the pendency of the suit the court receiver inducted one
G Usman Ghani Haji Mohamed as a tenant. He filed CS No. 7 of 1978
praying for an interim injunction restraining the court receiver from hand-
ing over possession to the respondent. That suit was continued.

After the compromise decree was passed on 14.6.77 the appellant
who was the counsel for the respondent was requested to withdraw the
H amount lying with the court receiver and hand over the same to the
J.S. JADHAV v. MUSTAFA HAJI [MOHAN, J.] 1009
r-·
respondent. For this purpose a, letter of authorisation to enable the appel- A
!ant to receive the amount was also issued .. Pursuant to the letter of
authorisation and instructions, a iota! amount of Rs. 50,379 was withdrawn
by the appellant from the court receiver. Out of this, he paid only Rs.
18,000 and the rest was not paid. Therefore, the respondent preferred a.
>( complaint before the Bar Council of India on 9.1.81. The appellant was
B
issued a notice by the Bar Council to which he submitted his reply. On
consideration of his reply and hearing the arguments, the Disciplinary

- Committee of the Bar Council of India, was of the view that the burden of
proving the fact that the respondent had paid a sum of Rs. 50,379 lay on
the appellant. Certain receipts produced to evidence payment to the
respondent were not accepted. The plea of the appellant that the account c
books had been lost was held to be untrue. Ultimately the appellant was
-r.- suspended for a period of two years and further directed to pay a 'sum of
Rs. 500 to the complainant (the respondent herein). It is against this order
the present appeal has been preferred.
D
Learned counsel for the appellant took us through the impugned
order and urged that the Committee had not properly appreciated the
evidence especially the receipts which were produced by the appellant to
evidence the payment. IL is incorrect to hold that the receipt dated 8.8.77
was a suspicious document merely because the account books were not
produced, it would not follow that the payments made by the appellant E
could be disbelieved.

- We pointed out to the le.arned counsel for the appellant that the
order under appeal is unexceptional and there was no case for interference.
We felt that the order of suspension of two years was not commensurate F
with the charges of misappropriation. Therefore, we directed the issue
··~
notice to the appellant which came to be accepted by the learned counsel
Mr. Bharat Sangal. Inspite of the fact that the appellant has not chosen to
appear, in order to rnakc over the payment of the amount voluntarily.
Therefore, we are left with no option then lo decide the case ourselves on
merits . G

.,. The Disciplinary Committee of the Bar Council on a proper ap-
preciation of the evidence disbelieved the so-called receipts evidencing the
payment. It has come to the correct conclusion that the receipt dated 8th
of August, 1979 was got up on a blank signed paper. Hence, the due H
1010 SUPREME COURT REPORTS [1993] 2 S.C.R.

A execution of the receipt had not been proved by the appellant. Besides, the
statement of the appellant that the account books had been lost in transit
had been rightly disbelieved. Under these circumstances this is a clear case
wherein the misappropriation by the appellant has been fully established.
Once this conclusion is arrived at, the question is what is the punishment
to be imposed?
B
Advocacy is not a craft but a calling; a profession wherein devotion
to duty constitutes the hall mark. Sincerity of performance and the earnest-
ness of endeavour are the two wings that will bare aloft the advocate to the
tower of success. Given these virtues other qualifications will follow of their
-
C own account. This is the reason why legal profession is regarded to be a
noble one. But it cannot be ~llowed to become a sorriest of trades. It will
be usefui to q~ote what Sharaswood said of this profession:-

A lower, without the most sterling integrity, may shine
D for a while with meteoric splendour; but his light will soon
go out in blackness of darkness. It is not in every man's
power to rise to eminence by distinguished abilities. It is
not in every man's power, with few exceptions, to attain
respectability, competence, and usefulness. The tempta-
tions, which beoet a young man in the outset of his profes-
E sional life, especially if he is in absolute dependence upon
business for his subsistence, are very great. The strictest
principles of integrity and honour are his only safety. Let
him begin by swerving from truth or fairness, in small
particulars, he will find his character gone-whispered
F away, before he knows it. Such a one may not indeed be
irrecoverably lost; but it will be years before he will be
able to regain a firm foothold. There is no profession in
which moral character is so soon fixed as in that of the
law; there is none in which it is subjected to severer
scrutiny by the public. It is well that it is so. The things
G we hold dearest on earth, out fortunes, reputati?ns,
domestic peace, the future of those dearest to us, nay, our
liberty and life itself, we confide to the mtegrity of our
legal counsellors and advocates. Their character must be
not only without a stain, but without suspicion. From the
H very commencement of a lawyer's career, let him cultivate
y
'

J.S. JADHAV v. MUSTAFA HAJJ [MOHAN, J.) 1011

above all things, truth, simplicity and candor. They are A
cardinal virtues of a lawyer. Let him always seek to have
a clear understanding of his object: be sure it is honest
and right and then march directly to it. The covert, in-
direct and insidious way of doing anything, is always the
wrong way. It gradually hardens the moral faculties,
B
renders obtuse the perception of right and wrong in

- human actions, weighs everything in the balance of worldly
policy, and ends most generally, in the practical adoption
of the vile maxim, "that the end sanctifies the means."

Therefore an exacting standard is what is expected of an advocate. C
This court has taken the view in M. Veerabhadra Rao v. Tek Cha11d,
(1984] Supp. SCC 571 as to how in such a case professional misconduct
has to be dealt with. Jn that case, the advocate committed forgery by
attesting false affidavits which was held to be a serious misconduct. Thio
court pointed out the duties of the members of the bar in the following D
passage:-

"Legal profession is monopolistic in character and this
monopoly itself inheres certain high traditions which its
members are expected to upkeep and uphold. Members
of the profession claimed that they are the leaders of
E

- thought and society. Jn the words of Justice Krishna Iyer
in Bar Cou11cil of Maharashtra v. M.V. Dablwlkar, [1975]
2 SCC 702 the role of the members of the Bar can be
appreciated. He said at page 718:
F
The bar is not a private guild, like that of 'barbers,
butchers and candlestick-makers' but, by lfo}d. ~-.;~tra~t, a
public institution committed to public justice and pro
bona public service. The grant of a monopoly licence to
practice law is based on three assumptions: (1) There is
a socially useful function for the lawyer to perform, (2) G
The lawyer is a professional person who will perform that
function, and (3) His performance as a professional per-
son is regulated by himself and more formally, by the
profession as a whole. The central function that the legal
profession must perform is nothing less than the ad~ H
•'

1012 SUPREME COURT REPORTS [1993) 2 S.C.R.

A ministration of justice ('The Practice of Law is a Public
Utility'-'The Lawyer, the Public and Professional
Responsibility' by F. Raymond Marks et al-Chicago
American Bar Foundation, 1972, pp. 288-289). A glance
at the functions of the Bar Council, and it will be apparent
that a rainbow of public utility duties, including legal aid
B to the poor, is cast on these bodies in the national hope
that the members of this monopoly will serve society and
keep to <:anons of ethics befitting an honourable order. If
pathological cases of member misbehaviour occur, the
-
reputation and credibility of the Bar suffer a mayhem and
c who, but the Bar Council, is more concerned with and
sensitive to this potential disrepute the few black sheep
bring about? The official heads of the Bar, i.e. the Attor-
ney General and the Advocates-General too are dis-
tressed if a lawyer 'stoops to conquer' by resort to
soliciting, touting and other corrupt practices.
D
If these are the high expectations of what is describes as a noble
profession, its members must set an example of conduct worthy of emula-
tion. If any of them falls from that high expectation, the punishment has to
be commensurate with the degree and gravity of the misconduct".
E
Accordingly, the punishment was increased to one of suspension for
a period of five years, having regard to the gravity of the misconduct and
keeping in view the motto that the punishment must be commensurate with
the gravity of the misconduct.
F
. In the case on hand admittedly the complainant (respondent) does
not know English. It is equally admitted that the appellant had withdrawn
the money from the Court Receiver. None of the correspondence ad-
dressed to the respondent mentioned about the receipt dated 8th of
August, 1977. The plea taken by the appellant based on the receipt is
G clearly false.

The appellant has been withdra\ving the money over 14 years and he
has illegally retained the amount. Out of a sum of Rs. 50,379 which was
admittedly withdrawn from the court receiver only Rs. 18,000 was paid on
H different occasions. The said amount was also spread over and paid on
-,.. ..
J.S. JADHAV v. MUSTAFA HAJJ [MOHAN, J.] 1013

different occasions. On a direction of this court a sum of Rs: 10,000 had A
been deposited by the appellant which bas been withdrawn by the respon-
dent as per order dated 3rd September, 1991. Still a sum of Rs. '22,379 is
due.

In view of the established finding of misappropriation, we think the
proper punishment will be the name of the Advocate must be struck off
B
the rolls. We order accordingly. In addition to this the question arises,
- whether we can direct the refund of the sum of Rs. 22,379 which still is
pending for the appellant. Section 38 of the Advocates Act says as follows:-

"Appeal to the Supreme Court:- Any person aggrieved by c
an order made by the disciplinary committee of the Bar
Council of India under Section 36 or Section 37 [or the
Attorney-General of India or the Advocate-General of the
State concerned, as the case may be], may within sixty days
of the date on which the order is communicated to him,
prefer an appeal to the Supreme Court and the Supreme D
Court may pass such order [including an order varying the
punishment awarded by the disciplinary committee of the
Bar Council of India] thereon as it deems fit:

(Provided that no order of the disciplinary committee E
of the Bar Council of India shall be varied by the Supreme
-. Court so as to prejudicially affect the person aggrieved
without giving him a reasonable opportunity of being
heard]."

"when it says," deems fit, it must be construed as to meet the ends of F
justice. We feel the respondent should not be driven to a civil court for
recovery of this amount even when the appellant has been found guilty by
his own peers which we have also confirmed. Therefore, we direct that
there shall be a decree in favour of the respondent (complainant) for a
sum of Rs. 22,379 together with interest at 9% per annum from the date G
~ of the complaint till the date of payment.

The appeal is dismissed· in the above terms with costs of the respon-
dent which is quantified at Rs. 3000 (Rs. three thousand only).

Before we part with the case we may usefully quote Harry R. Blythe H
1014 SUPREME COURT REPORTS [1993] 2 S.C.R.
t
A (cited in 21 Green Bag, 224):-
"Great God! the hour has come when we must clear The
legal fields from poison and from fear; We must remould
our standards-build them higher, And clear the air as
though by cleansing fire, Weed out the damning traitors
B to the law, Restore her to her ancient place of awe."

V.P.R. Appeal dismissed.
-
t

(