HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 28 Case :- U/S 482/378/407 No. - 3350 of 2014 Applicant :- [ENTITY] Opposite Party :- The State Of U.P Thru S.P., C.B.I / A.C.B Lucknow Counsel for Applicant :- [ENTITY] Counsel for Opposite Party :- [ENTITY], [ENTITY] Hon'ble [ENTITY],J.
1. This petition under [SECTION] [ACT] has been filed for quashing the order dated 1.8.2014 passed by the learned Special Judge Anti Corruption (Central) C.B.I., Lucknow on discharge application moved by the petitioner in [CASE NUMBER], [CASE NUMBER], under [SECTION], [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] [ACT] and under [SECTION] [ACT], Police Station CBI/ACB, Lucknow, by means of which the discharge application has been rejected.
2. The facts of the case, briefly stated, are that an FIR was lodged by the Central Bureau of Investigation on the complaint of the Zonal Manager of the Bank of India, Kanpur regarding conspiracy of cheating, forgery and criminal misconduct constituted by the named bank officials and some unknown persons for granting eight housing loans/mortgage, over draft and loans etc. and causing loss to the bank @ RS.1.17 Crore approximately. The petitioner was not named in the FIR. The Central Bureau of Investigation after investigating the case, had filed eight charge sheets against the officials of the bank as well as the customers, who were benefitted by the fraudulent transactions/loans, mortgage and over drafts. Out of eight charge sheets, the petitioner was named in respect of the charge sheet, subject matter of the present case as accused no.8 under [SECTION], [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] [ACT] and under [SECTION] [ACT].
3. Allegation against the petitioner is that he had entered into conspiracy with other accused persons and in furtherance of the conspiracy, he had fraudulently and dishonestly prepared a false Non Encumbrance Report in respect of the property at 117/197, Purani Basti, Kakadeo, Kanpur and stated in the report that one Mr. [ENTITY] had constructed a residential building (ground floor), without verifying the genuineness of title etc. and had submitted the false report intentionally to the bank with fraudulent intention to cheat the bank with the conspiracy of the bank officials and other accused persons, which has resulted into loss to the bank @ Rs.8,34,607/- and corresponding wrongful gain to the accused persons.
4. The petitioner is a practising Advocate for 33 years and he was on the panel of the bank for more than ten years when the alleged offence had taken place. The petitioner was asked to prepare a Non Encumbrance Report in respect of the property at 117/197, Purani Basti, Kakadeo, Kanpur. The petitioner was handed over photostat copies of the house tax demand receipt dated 10.7.2002 in favour of [ENTITY] and the photocopy of the title deed in order to examine the same and give his opinion. The petitioner had examined the documents handed over to him by the bank and inspected the record of the Sub-Registrar for 30 years in respect of the property and submitted his Non Encumbrance Report and opinion. It was specifically mentioned in the report that the report was prepared on the basis of two documents supplied by the bank itself. It was also specifically mentioned that the petitioner had always given the opinion in respect of the property on the basis of the documents supplied to him by the bank and he had never made spot inspection.
5. Thus, the allegation in the charge sheet against the petitioner is that he had prepared a false legal scrutiny report in respect of the property in criminal conspiracy with other accused, which has resulted into loss of Rs.8,34,604/- to the bank as mentioned above.
6. Heard Sri [ENTITY], learned counsel representing the petitioner and Sri [ENTITY], learned counsel representing the CBI.
7. Learned counsel for the petitioner submits that rendering legal opinion or legal scrutiny report on the basis of the documents supplied to the petitioner, cannot constitute an offence against the petitioner if it is found later on that the opinion in respect of the property in question, was not correct. He further submits that there is nothing on record which would indicate that the petitioner had connived with other accused to cheat the bank of the amount of Rs.8,34,607/-. It is submitted that the ingredients of the criminal conspiracy are not present in the present case. There was no prior meeting of mind or agreement between the petitioner and other accused to conspire for committing the offence as alleged. A Lawyer cannot be prosecuted for rendering a legal opinion or giving legal scrutiny report unless and until it is established that he had fraudulently given the false report in connivance with other accused to commit the offence as alleged otherwise.
8. In support of the aforesaid submissions, learned counsel representing the petitioner has placed reliance on the judgement of the Hon'ble Supreme Court in the case of [PRECEDENT] as well as the order passed by the Hon'ble Supreme Court in the case of [ENTITY] and others vs. State of Bihar and others, MANU/SC/1216/2015 passed in [CASE NUMBER] (Arising out of [CASE NUMBER]) decided on 3.8.2015.
9. On the other hand, Sri [ENTITY], learned counsel representing the Central Bureau of Investigation submits that the petitioner has an opportunity before the trial court itself to move a discharge application taking all contentions raised here and the trial court after examining the evidence available on record, would take the decision in respect of framing of charge or discharge of the petitioner. He also submits that at this stage, the High Court should not exercise its powers under [SECTION] [ACT] to quash the criminal proceedings when the offence has been, prima facie, found to have been committed by the petitioner. He, therefore, submits the present petition be dismissed.
10. I have considered the rival submissions of the parties carefully.
11. The sum and substance of the allegation against the petitioner, is that he had given a false legal scrutiny report in respect of the property at 117/197, Purani Basti, Kakadeo, Kanpur and on the basis of the aforesaid report, loan of Rs.8,34,607/- was sanctioned and later on it was found that the property was not free from incumbrance. There is nothing on record, which would indicate that the petitioner had deliberately given the aforesaid report in connivance with other accused to defraud the bank. It is another thing to say that the petitioner was not very careful while carrying the scrutiny in respect of the property and his services might have been professionally deficient, but to attract the criminal liability, there has to be mens rea and there has to be prior meeting of mind between the other accused and the petitioner to attract the offence of criminal conspiracy. There is nothing on record to suggest that the petitioner had entered into a criminal conspiracy with the other accused.
12. The Hon'ble Supreme Court somewhat in similar circumstances in the case of [PRECEDENT] (supra) in paragraphs 29 to 31 has held as under:-
"29. In [PRECEDENT] this Court held that: (SCC p. 562, para 8) "8. 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."
30. Therefore, the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank. In the given case, there is no evidence to prove that A-6 was abetting or aiding the original conspirators.
31. However, 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 [SECTION] and [SECTION] [ACT] along with other conspirators without proper and acceptable link between them. It is further made clear that if there is a link or 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. Such tangible materials are lacking in the case of the respondent herein."
13. Further, relying on the aforesaid judgment, the Hon'ble Supreme Court in the case of [ENTITY] and others (supra) in paragraphs 4 to 6 has held as under :-
"4. The High Court by the impugned judgment has refused to quash the First Information Report (FIR) on the ground that the same prima facie discloses commission of the offences alleged against the Appellants who are the panel advocates of the Bank. A reading of the FIR would go to show that the allegations levelled against the Appellants is that as panel advocates they had furnished false Search Report/NEC/legal opinion with regard to the properties/land documents in order to cheat the Bank and to facilitate obtaining of loan by the concerned persons. On investigation of the FIR, a charge-sheet has been submitted, a copy of which is enclosed to the present Appeal Paper Book. A reading of the charge-sheet does not refer to any specific finding of investigation.
5. Taking into account the contents of the FIR, we are left with the impression that the said allegations are bald and omnibus and do not make any specific reference to the role of the Appellants in any alleged conspiracy. In [PRECEDENT] to which one of us ([ENTITY], J.) was a party, it has been held by this Court that a criminal prosecution on the basis of such bald and omnibus statement/allegations against the panel advocates' of the Bank ought not to be allowed to proceed as the same constitute an abuse of the process of the Court and such prosecution may in all likelihood be abortive and futile. The following view expressed in [PRECEDENT] (supra) will be appropriate to be quoted:
30. Therefore, the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank. In the given case, there is no evidence to prove that A-6 was abetting or aiding the original conspirators.
31. However, 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 [SECTION] and [SECTION] of [ACT] along with other conspirators without proper and acceptable link between them. It is further made clear that if there is a link or 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. Such tangible materials are lacking in the case of the Respondent herein.
6. Taking into account the aforesaid facts and the ratio of the law laid down by this Court in [PRECEDENT] (supra), we are of the view that the High Court was plainly wrong in refusing to interdict the proceedings against the Appellants. We, therefore, set aside the order of the High Court and quash the proceedings in [CASE NUMBER] arising out of [CASE NUMBER] pending before the Chief Judicial Magistrate, Bhojpur, Ara insofar as the two Appellants [ENTITY] and [ENTITY] are concerned."
14. Considering the submissions advanced by the learned counsels representing the parties and the two judgments of the Hon'ble Supreme Court noted above, I am of the opinion that the criminal prosecution on the basis of allegation against the petitioner in the impugned charge sheet ought not to be allowed to be proceeded as the same would constitute the abuse of the process of the Court inasmuch as the prosecution in all likelihood would be a futile exercise.
15. The petition, thus, is allowed and the order dated 1.8.2014 passed by the learned Special Judge Anti Corruption (Central) C.B.I., Lucknow on discharge application moved by the petitioner in [CASE NUMBER], and the entire proceedings of [CASE NUMBER], under [SECTION], [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] [ACT] and under [SECTION] [ACT], Police Station CBI/ACB, Lucknow and the criminal proceedings in pursuance to the aforesaid court case number, so far it relates to the petitioner, are hereby quashed.
16. There shall be no order as to cost.
( [ENTITY], J.) Order Date :-April 11th , 2019 Rao/-