CBI v. K. Narayana Rao, (2012) 9 SCC 512
A lawyer cannot be prosecuted for a criminal offence merely because he gave
wrong advice or his opinion was not acceptable - Supreme Court
In the present case, K. Narayana Rao, who was legal adviser to Vijaya Bank,
Hyderabad, and whose duty as a panel advocate was to verify documents and give
legal opinion on grant of loans, was included as an accused by the CBI, which
registered a criminal case under the provisions of the Prevention of Corruption
Act [Section 13(2) read with Section
13(1)(d)] and the Indian Penal Code [under Sections 120 B, 419, 420, 467, 468, 471 read with Section
109] against certain bank officials. The
allegation against him is that he gave false legal opinion in respect of 10
housing loans. It has been specifically alleged in the charge sheet that he has
failed to point out the actual ownership of the properties and to bring out the
ownership details and name of the apartments in their reports and also the
falsity in the permissions for construction issued by the Municipal
Authorities.
The Andhra Pradesh High Court quashed the charge
sheet against him. Being aggrieved, the CBI, Hyderabad filed appeal before
the Supreme Court.
Dismissing the CBI’s appeal, the Supreme Court said merely because his
opinion is not acceptable, the lawyer cannot be slapped with criminal
prosecution, “particularly in the absence of tangible evidence that he
associated with conspirators,”.
The Supreme Court said: “The liability against an opining advocate
arises only when the lawyer was an active participant in a plan to defraud the
bank. There is no evidence to prove that Mr. Rao was aiding or abetting the
original conspirators. At the most, he may be liable for gross negligence or
professional misconduct if it is established with acceptable evidence.
The Bench said, “The respondent was not named in the FIR. Though
statements of several witnesses have been enclosed with the charge sheet, they
speak volumes of others. However, there is no specific reference to Mr. Rao’s
role along with the main conspirators.”
" A lawyer does not tell his client that he shall win the case in all
circumstances. Likewise a physician would not assure the patient of full
recovery in every case. A surgeon cannot and does not guarantee that the result
of surgery would invariably be beneficial, much less to the extent of 100% for
the person operated on. "
" The only assurance which such a professional can give or can be given by
implication is that he is possessed of the requisite skill in that branch of
profession which he is practising and while undertaking the performance of the
task entrusted to him, he would be exercising his skill with reasonable
competence. This is what the person approaching the professional can
expect."
" Judged by this standard, a professional may be held liable for
negligence on one of the two findings, viz., either he was not possessed of the
requisite skill which he professed to have possessed, or, he did not exercise,
with reasonable competence in the given case, the skill which he did
possess." said the Bench of Justices P. Sathasivam and Ranjan Gogoi.
The Bench also said
" it is beyond doubt that a lawyer owes an “unremitting
loyalty” to the interests of the client and it is the lawyer’s responsibility
to act in a manner that would best advance the interest of the client. Merely
because his opinion may not be acceptable, he cannot be mulcted with the
criminal prosecution, particularly, in the absence of tangible evidence that he
associated with other conspirators. At the most, he may be liable for gross negligence
or professional misconduct if it is established by acceptable evidence and
cannot be charged for the offence under Sections
420 and 109 of IPC
along with other conspirators without proper and acceptable link between
them."
In this case the Supreme Court reiterated following of its previous decisions
1. Jacob Mathew vs. State of Punjab & Anr. (2005) 6
SCC 1 the Supreme Court laid down the standard to be applied for judging. To
determine whether the person charged has been negligent or not, he has to be
judged like an ordinary competent person exercising ordinary skill in that
profession. It is not necessary for every professional to possess the highest
level of expertise in that branch which he practices.
2. Pandurang Dattatraya Khandekar vs. Bar Council of Maharashtra
& Ors. (1984) 2 SCC 556, Supreme Court held that “…there is a world of
difference between the giving of improper legal advice and the giving of wrong
legal advice. Mere negligence unaccompanied by any moral delinquency on the
part of a legal practitioner in the exercise of his profession does not amount
to professional misconduct."
Accordingly, Supreme Court dismissed the appeal of CBI.
