'Lawyer Not Criminally Liable For Improper Legal Advice': Calcutta High Court Quashes Criminal Proceedings Against Lawyer

The Calcutta High Court has recently quashed criminal proceedings initiated against a lawyer for providing allegedly false and improper legal advice which was instrumental in sanction of a bank loan to a company which was later declared as Non Performing Asset (NPA) with an outstanding due of Rs. 2.57 crores. 

Justice Ananda Kumar Mukherjee observed that merely because the lawyer's opinion was not acceptable, criminal proceedings cannot be initiated against him especially in the absence of any tangible evidence that he was associated with other conspirators.

"..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 IPC along with other conspirators without proper and acceptable link between them", the Court observed. 

The Court further opined that if there is a link for evidence to connect him with the other conspirators for causing loss to the institution undoubtedly, the prosecuting authorities are entitled to proceed under criminal prosecution however such tangible evidence is absent in the instant case. 

In the instant case, the lawyer had been fastened with criminal liability under sections 420, 468, 471, 120B of the IPC. Thereafter, he had filed an application for quashing of the criminal proceedings initiated by the Central Bureau of Investigation, Enforcement Offences Wing, Kolkata before the concerned Metropolitan Magistrate. 

Upon perusal of the record, the Court noted that the petitioner had not been named in the FIR and that if the complaint is taken on its face value and accepted in their entirety, no offence is constituted against the petitioner to make out a case against him. It was further opined that no material has surfaced in course of investigation to establish any manner of connection and involvement of the petitioner with the principal accused in defrauding the bank to disburse the loan to the company.

It was also noted that there is no allegation or material in the charge sheet that the petitioner made any wrongful gain from the co-accused persons or he had any pecuniary benefit for preparing a wrong search report in favour of the company.

The Court further observed that it is undisputed that the loan was sanctioned in favour of the accused company and that the title deeds and other fabricated and forged documents relating to the property were handed over to the concerned bank on arrangement made by the principal accused person, including the directors of the company who had applied for the loan.

Opining that the petitioner should have been more careful in ascertaining the genuineness of the title deeds, the Court remarked, 

"The petitioner considered such false and forged documents and prepared his report. He should have been more cautious and careful to hold search at the A.D.S.R office to ascertain if the Title Deeds where entered in the Register to determine ownership of the property and the genuineness of the Deeds and also find out the genuineness of the record of rights from the Land Revenue Office to unearth the names of recorded owner and the nature of the land. The petitioner appears to have been negligent by not fulfilling his duties in proper manner."

However, the Court observed that the report prepared by the petitioner does not lead to any presumption that the petitioner had any connection with the actual beneficiaries for releasing of the loan. It was further stated that the allegations made in the complaint and the evidence collected against the petitioner in support of the same during investigation do not prima facie constitute commission of any offence of defrauding the bank by the petitioner.

Reliance was also placed on the Supreme Court decision in Central Bureau of Investigation, Hydrabad v. K. Narayana Rao wherein the Apex Court had inter alia observed that criminal prosecution on the basis of such bald and omnibus  allegations against the panel advocates of the Bank ought not to be allowed to proceed as the same constitutes an abuse of the process of the court and such prosecution may in all likelihood be abortive and futile.

Furthermore, the Delhi High Court judgment in A. Kumar Sharma v. CBI was also relied upon wherein the High Court had quashed the proceeding against an panel advocate who had submitted a false search report in alleged collusion with the principal accused, holding therein that mere negligence or want of greater professional care and competence on the part of an advocate would not make him liable for a criminal offence in absence of tangible evidence.

Accordingly, the Court set aside the criminal proceedings against the petitioner by observing, 

" I find and have no hesitation to hold that there is no tangible evidence to establish any connection or collusion between the petitioner and other co- accused persons for the purpose of defrauding the bank in sanction of the loan amount. Even there is no iota of evidence in the charge sheet where from it would indicate that the petitioner due to such act had made a wrongful gain from the other beneficiaries. Under such circumstances continuation of this proceeding against the petitioner would amount to an abuse of the process of court"

Case Title: Bhaskar Banerjee v. Central Bureau of Investigation & Anr

Case Citation: 2022 LiveLaw (Cal) 165

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