PROFESSIONAL ETHICS

CASE ANALYSIS
BAR COUNCIL OF ANDHRA PRADESH
v.
KURAPATI SATYANARAYANA

CASE RELATED TO THE PROFESSIONAL MISCONDUCT BY AN ADVOCOTE UNDER

THE ADVOCATES ACT, 1961

Submittted to: Prof. RAJKUMAR Submitted by,

Submitted on: 21/01/2019 Varsha S. Pillai

15BLB1044

VITSOL

VIT CHENNAI

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CASE: BAR COUNCIL OF ANDHRA PRADESH (PETITIONER) Versus
KURAPATI SATYANARAYANA (RESPONDENT)

DATE: 15TH November 2002

CITATION: AIR 2003 SC 175

COURT: SUPREME COURT OF INDIA

BENCH: V. N. Khare & Ashok Bhan

STATEMENT OF FACTS

1. The Bar Council of Andhra Pradesh has filed this appeal against the order of the Disciplinary
Committee of the Bar Council of India dated 28th March, 1999 by which the Bar Council of India
has set aside the order passed by the State Bar Council removing the name of the Kurapati
Satyanarayana from the roll of the State Bar Council as he was found guilty of grave professional
misconduct in discharge of his duties.
2. Initially, O.S. No 1624 of 1991 was filed by the Shri. Gutta Nagabhushanam on the file of the
Additional District Munsif Magistrate. The said suit was decreed and the Execution Petition No.
112 of 1995 was instituted for realization of the decretal amount Mr. K. Satyanarayana was
engaged as counsel by Shri. G. Nagabhushanam in the execution proceedings.
3. K. Satyanarayana received a total sum of Rs. 14600/- on various dates in the execution
proceedings but he did not make the payment of same to Shri. G. Nagabhushanam. Hence, on
18th October, 1996 Shri. G. Nagabhushanam filed a complaint with the Additional District
Munsif, who then transferred the matter to the Bar Council of Andhra Pradesh.
4. The complaint filed and important documents were forwarded to the state Bar Council and Mr.
K. Satyanarayana chose not to file a counter. Hence the matter went to its Disciplinary
Committee which after examining the witnesses produced came to the conclusion that Mr. K.
Satyanarayana received the total sum of Rs. 14600/- belonging to Shri. G. Nagabhushanam and
retained the same with him. Hence, the disciplinary committee of the State Bar Council
concluded that the advocate had retained the money with him and was thus guilty of
“professional misconduct.” He was directed to return the money to the complainant.
5. K. Satyanarayana asserted that he had informed Shri. G. Nagabhushanam through a post card
about the receipt of the decretal amount and that on 24th April, 1996 he paid Rs. 11000/- to Shri.

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 G. Nagabhushanam. However, these were not accepted by the Disciplinary Committee as Mr. K.
Satyanarayana failed to produce any evidence proving the payment of the sum of Rs. 11000/-.
6. K. Satyanarayana then filed an appeal before the Disciplinary Committee of the Bar Council of
India. The Disciplinary Committee of the BCI agreed with the finding of fact recorded by the
State Bar Council that Mr. K. Satyanarayana failed to pay the amount of Rs. 14600/- received by
him on the behalf of Shri. G. Nagabhushanam in the execution proceedings but came to the
conclusion that Mr. K. Satyanarayana did not commit any professional misconduct though there
might have been some negligence on his part.
7. The Disciplinary Committee of BCI observed that the conduct of the appellant shows that Mr.
K. Satyanarayana never refused to return the money the same and also he had made part
payment of the total amount. Perusal of the file shows that Mr. K. Satyanarayana could not make
the payment of the remaining amount because of his family circumstances as the remaining
amount was utilized by him in his treatment. The Committee concluded that Mr. K.
Satyanarayana never wanted to misappropriate the decretal amount and hence, the BCI set aside
the State Bar Council’s order holding that the delinquent had not committed any professional
misconduct though there might have been some negligence on his part, which did not involve
any moral turpitude.
8. The Bar Council of Andhra Pradesh filed this appeal against the aforesaid order of the
Disciplinary Committee of the Bar Council of India.

ISSUES RAISED

1. Whether or not retaining client’s money in this case amounts by an advocate amounts to
professional misconduct?
2. Whether or not in this case retaining client’s money is just negligence on the part of K.
Satyanarayana?
3. Whether or not K. Satyanarayana is guilty of professional misconduct?

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SUMMARY OF ARGUMENTS

 The appellant Bar Council of Andhra Pradesh filed appeal petition against the order of the Bar
Council of India which set aside its order of removing the name of K. Satyanarayana from the
State roll as it was of view that he committed one of the gravest professional misconduct as he
retained money belonging to Shri. G. Nagabhushanam.

 The point which was raised by the respondent that the appeal filed by the Bar Council of Andhra
Pradesh is not maintainable as it is not the person aggrieved so this appeal is not maintainable.
 The complaint filed by the de-facto complainant along with the reply filed by the Delinquent and
the connected documents were forwarded to the Bar Council of the Andhra Pradesh in the High
Court premises for appropriate action. The State Bar Council took notice of the complaint filed
and issued a notice to the Delinquent. The Delinquent in spite of the service of notice did not
choose to file a counter.
 The State Bar Council referred the matter to its Disciplinary Committee. The State Disciplinary
Committee after examining the witnesses produced by the complainant came to the conclusion
that the Delinquent had received a total sum of Rs. 14,600/- belonging and payable to the
de-facto complainant on different dates and retained the same with him.
 Assertion of the Delinquent that he had informed the complainant through a post-card about the
receipt of the decretal amount was not accepted. That in spite of an undertaking (Ex.C-1)dated
24th April, 1996 given in writing by the Delinquent to pay a sum of Rs. 11,000/- to the
complainant, the same was not paid. The story put-forth that he paid a sum of Rs. 11,000/- on 4th
September, 1996 was not accepted because the Delinquent failed to produce any receipt given
by the complainant evidencing the payment of the said amount to the complainant. It was noted
that only on 19th August, 1997 a demand draft No. 808327 of Rs. 3,600/- and a demand draft
No. 0142169 dated 17th October, 1997 for Rs. 2,900/- drawn on State Bank of Hyderabad in
favour of the complainant were sent. The Committee directed that the said two drafts be
forwarded to the complainant without prejudice to his any other right, if any. It was specifically
mentioned that the payment of the said two amounts would not obliterate the misconduct of the
Delinquent.
 The Delinquent preferred an appeal before the Disciplinary Committee of the Bar Council of
India. The Disciplinary Committee of the Bar Council of India agreed with the finding of fact

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 recorded by the Disciplinary Committee of the State Bar Council that the Delinquent had failed
to make the payment of Rs. 14,600/- received by the Delinquent on behalf of the complainant in
the execution proceedings, but came to the conclusion that the Delinquent had not committed
any professional misconduct though there might have been some negligence on his part which
did not involve any moral turpitude. For coming to this conclusion, the Disciplinary Committee
of the Bar Council of India recorded the following findings: "One thing is very clear from the
conduct of the appellant that no doubt, he had withdrawn the money on behalf of the
complainant being his counsel, but he never refused to return the same to the complainant. It has
also come in evidence that the appellant had made part payment of the total amount before filing
of the present complaint by the complainant before the Disciplinary Committee of Andhra
Pradesh. Perusal of the file shows that the appellant could not make the payment of the
remaining amount because of his family circumstances. There seems to be weight in the
arguments of the appellant to the effect that he could not make the payment of the remaining
amount to the complainant as the said amount was utilised by him on his treatment. This type of
events are very common when some body is in trouble. At this stage, we are to see as what was the
intention of the appellant with respect to utilisation of the said amount. We are to see whether he
had the intention of misappropriating the money of his client in order to defraud him or he was
compelled by the circumstances in not returning the said amount as and when demanded by the
complainant.
 During the course of arguments it was brought to the notice that the appellant had already
returned the total decretal amount with interest to de-facto complainant. He has further brought
to the notice that he was still suffering from serious heart ailment and he has also sought
appointment with a doctor for undergoing surgery in near future. The Committee is of the
considered view that the appellant from the very beginning never wanted to misappropriate the
decretal amount of the de-facto complainant and the lapse on his part to return the same was
because of his domestic circumstances, as explained

JUDGEMENT OF THE CASE

 The Supreme Court said that the pleading of the point raised by the respondent that the appeal
filed by the Bar Council of Andhra Pradesh is not maintainable need not be dilated as seven
Judge Constitution Bench of this Court held in Bar Council of Maharashtra v. M. V. Dabholkar

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 and others1, that the role of Bar Council is of dual capacity, one as the prosecutor through its
Executive Committee and the other quasi-judicial performed through its Disciplinary
Committee.
 The Supreme Court said that the finding of the BCI that there was no intention on the part of the
advocate to misappropriate the money of his client was not only “unfounded and perverse” but
also lacked the serious thought which was required to be given to the disciplinary committee of
the BCI in the discharge of quasi-judicial functions while probing into such grave instances.
 Further, it said that it was neither pleaded nor shown that Mr. K. Satyanarayana was in dire
financial difficulty which promoted him to utilize the decretal amount for his treatment which
was with him in trust. This is an act of breach of trust. It said that “we are firmly of the view that
such types of excuses cannot be entertained being frivolous and unsustainable”.
 Bench comprising Justice V. N. Khare and Justice Ashok Bhan said “adherence to correct
professional conduct in the discharge of one’s duties as an advocate is the backbone of legal
system. Any laxity while judging the misconduct which is not bona fide and dishonest advocate
would undermine the confidence of the litigant public resulting in the collapse of legal system.”
 The Supreme Court referred to the case of Harish Chandra Tiwari v. Baiju2, in which it was held
that “Amongst the various types of misconduct envisaged for a legal practitioner the
misappropriation of the client’s money must be regarded as one of the gravest.” In his
professional capacity, the legal practitioner has to collect money from the client towards expenses
of the litigation or withdraw money from the Court payable to the client or take money of the
Client to be deposited in Court. In all such cases, when the money of the client reaches his hand
it is a trust. If a public servant misappropriates money he is liable to be punished under the
present Prevention of Corruption Act, with imprisonment which shall not be less than one year.
He is certain to be dismissed from service. But if an advocate misappropriates money of the
client there is no justification in de-escalating the gravity of the misdemeanour. Perhaps the
gravity of such breach of trust would be mitigated when the misappropriation remained only for
temporary period. There may be a justification to award a lesser punishment in a case where the
delinquent advocate the money before commencing the disciplinary proceedings.”
 The finding of the Disciplinary Committee of the Bar Council of India that there was no
intention on the part of the Delinquent advocate to misappropriate the money of his client or to

1
1976 AIR 242, 1976 SCR (2) 48
2
(2002) 1 UPLBEC 313

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 de-fraud him is not only unfounded and perverse but also lacks the serious thought which was
required to be given by the Disciplinary Committee of the Bar Council of India in the discharge
of quasi-judicial function while probing into the grave charge of professional misconduct by an
advocate in the discharge of his duties as a counsel.
 Setting aside the BCI’s order, the Bench said that “the conduct of the delinquent, who is an
elderly gentleman, is reprehensible and is unbecoming of an advocate. It deeply pains us that the
delinquent who claimed to have practised for three decades and has worked as Government
advocate for four years should have been guilty of such serious misconduct.”
 Hence, the Supreme Court has upheld an order of the Andhra Pradesh Bar Council removing
the name of a lawyer from its rolls after he was found guilty of “grave professional misconduct” in
the discharge of his duties and also the appellant shall be entitled to the costs of this appeal,
which was assessed as Rs. 5000/-

STATUTORY LAW

 An advocate is the most accountable, privileged and erudite person of the society and his acts are
role model for the society, which are necessary to be regulated. Professional misconduct is the
behaviour outside the bounds of what is considered acceptable or worthy of its membership by
the governing body of a profession. Professional misconduct refers to disgraceful or
dishonourable conduct not befitting an advocate.
 The Advocates Act, 1961 as well Indian Bar Council are silent in providing exact definition for
profession misconduct because of its scope, though under Advocate Act, 1961 to take
disciplinary action punishment are prescribed when the credibility and reputation on the
profession comes under a clout on account of acts of omission and commission any member of
the profession.
 Chapter V of the Advocate Act, 1961, deals with the conduct of Advocates. It describes
provisions relating to punishment for professional and other misconducts. Section 35(1)3 of the

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Section 35(1) of The Advocates Act 1961 :
“Where on receipt of a complaint or otherwise a State Bar Council has reason to believe that any advocate on its roll
has been guilty of professional or other misconduct, it shall refer the case for disposal to its disciplinary committee.
1[(1A) The State Bar Council may, either of its own motion or on application made to it by any person interested,
withdraw a proceeding pending before its disciplinary committee and direct the inquiry to be made by any other
disciplinary committee of that State Bar Council.]”

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 Advocate Act, 1961, proviso says, is relevant in this context4. This proviso say, where on receipt
of a complain otherwise a State Bar Council has reason to believe that any advocate on its roll has
been guilty of professional or other misconduct, it shall refer the case for disposal to it
disciplinary committee.
 Under Section 35 of the Act, the State Bar Council is empowered to initiate proceedings against
an advocate for misconduct, either on a complaint or on its own. The Bar Council of India under
Section 36 can likewise initiate such proceeding and also has the power to withdraw such
proceedings pending before any State Bar Council and inquire into such cases on its own. If
misconduct is proved in such case before the Bar Council such action may be taken, such as
suspension of practice for a period, or in grave cases striking the name of such advocates of the
roll. In such cases the advocate can prefer an appeal to the Bar Council of India, and further to
the Supreme Court under section 37 and 38 respectively. It is noteworthy that the Act does not
provide for withdrawal of complaint. A complaint once filed cannot be withdrawn and the
process of inquiry once set in motion cannot be stopped.
 Part-VI, Chapter- II of the Bar Council of India Rules provide Standards of Professional
Conduct and Etiquette for advocates. Rule 24 of the aforesaid Chapter provides that an advocate
shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by
his client and then Rule 25 says that an advocate should keep accounts of the client’s money
entrusted to him. Further Rule 27 provides that where any amount is received or given to him on
behalf of his client, the fact of such receipt must be intimated to the client, as early as possible5.

POSITION OF LAW BEFORE THIS JUDGMENT

In the case of Smt. Siya Bai v. Sita Ram6, the advocate withdrew the decretal amounts paid and did
not make the payment to the client. He pleaded that the amount withdrawn was adjusted towards the
fee and other expenses but it was not found true and not accepted and therefore, found guilty of
professional misconduct for illegally retaining the amount. The Disciplinary Committee of the Bar
Council of India ordered the advocate to refund the money to the complainant along with the 10%
interest per annum and also ordered suspension of advocate for a period of one year.

5
Barcouncilofindia.org (2019),
http://www.barcouncilofindia.org/wp-content/uploads/2010/05/BCIRulesPartVonwards.pdf (last visited Jan 20,
2019).
6
BCI Trust, Selected Judgments on Professional Ethics, p.28

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Also, Kerala High Court In Re: An Advocate v. Unknown7, it was found that the Advocate had
withdrawn Rs. 270/- deposited by the judgment-debtor in the case for payment to the
complainant-decree-holder as per the Debt Relief Act, but has not paid the same to the complainant
in spite of repeated demands and a registered notice through counsel and it was held by the Court
that “It is the imperative duty of the counsel on receipt of the client’s money, to inform the client
thereof and pay him without any delay the amount under receipt. For non-fulfillment of this duty on
the part of the counter-petitioner we suspend him from practice for a period of six months with effect
from the date of service on him of a copy of this order by the learned Munsiff of Pathanamthitta in
whose court he is reported to be practising.”

Hence, from the above judgments, we can see that earlier also, retaining and misappropriation of
Client’s money by an advocate was held to be a professional misconduct by the Disciplinary
Committee of BCI and the Hon’ble High Court and now also, Supreme Court has held it to be one
of the gravest professional misconducts by an advocate. So, we can say that there is no significant
change in the position of law before the judgment was passed and after it.

SIGNIFICANCE OF THE JUDGMENT

 The Supreme Court in this case reiterated the observations made in Bar Council of Maharashtra
v. M.V. Dabholkar and others8 that the role of Bar Council is of dual capacity, one as the
prosecutor through its Executive Committee and the other quasi-judicial performed through its
Disciplinary Committee. Hence, being the prosecutor, the State Bar Council would be an
‘aggrieved person’ and therefore, the appeal under section 38 of the Advocates Act, 1961 would
be maintainable.
 The Supreme Court also reiterated the principle that Misappropriation of client’s money is an
act of grave misconduct.
 It was observed by the Hon’ble Supreme Court that this is an act of breach of trust. Advocate is
the backbone of legal system. Any laxity while judging the misconduct which is not bona fide and
dishonest advocate would undermine the confidence of the litigant public resulting in the
collapse of legal system.

7
AIR 1961 Ker 209
8
1976 AIR 242, 1976 SCR (2) 48

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CRITICAL APPRAISAL

The role of the lawyers in the society is of great importance. They being part of the system of
delivering justice holds great reverence and respect in the society. Each individual has a well-defined
code of conduct which needs to be followed by the person living in the society. A lawyer in
discharging his professional assignment has a duty to his client, a duty to his opponent, a duty to the
court, a duty to the society at large and a duty to himself. It needs a high degree of probity and poise
to strike a balance and arrive at the place of righteous stand, more so, when there are conflicting
claims. While discharging duty to the court, a lawyer should never knowingly be a party to any
deception, design or fraud. While placing the law before the court a lawyer is at liberty to put forth a
proposition and canvass the same to the best of his wits and ability so as to persuade an exposition
which would serve the interest of his client and the society.

Here, in the present case, the advocate found guilty of misconduct has been in the field for 30 years
and more, it is expected of him to be an example to the fresher’s. Mere reasons without substantial
evidence of using the client’s money for medical treatment is pure negligence and gross malpractice
unworthy of an advocate’s noble profession. Further as mentioned and insisted by the Supreme
Court, the BCI and the State Bar Councils should take utmost care while determining questions of
misconduct by the advocates in the roll and depend only on valid documents and proofs with
evidentiary value for the same. The actual conduct of the advocate matters and not the intention as
the advocates are understood to know clearly about their own profession and code of conduct. May
it be first-time offenders of misconduct or advocates having many years of experience in the Bar,
everyone should be treated equally and punished accordingly to set examples and restore the dignity
of the profession in the eyes of the public litigants.

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