Misconduct Towards the Client: Money, Papers and Changing Sides

Bar Council of Andhra Pradesh v. Kurapati Satyanarayana

Bar Council of Andhra Pradesh v. Kurapati Satyanarayana, AIR 2003 SC 175, (2003) 1 SCC 102, decided 15 November 2002 by V.N. Khare and Ashok Bhan JJ.

Facts. An advocate received money on his client's behalf and did not account for it or pay it over.

Held. Receiving a client's money and failing to account for it or return it is professional misconduct, and the disciplinary committee's finding to that effect was sustained.

Prahlad Saran Gupta v. Bar Council of India

Prahlad Saran Gupta v. Bar Council of India, AIR 1997 SC 1338, (1997) 3 SCC 585, decided 26 February 1997 by S.C. Agrawal J.

Facts. An advocate acting for a decree-holder retained a sum of Rs 1,500 received on the client's behalf in his own hands for a considerable period, instead of paying it over or depositing it in court.

Held. Retaining the client's money in his own hands for so long, without justification, was conduct not befitting an advocate. The Court substituted a reprimand for the suspension that had been imposed.

Why this case matters more than its facts. It shows that a failure of account can be misconduct even where dishonesty is not established. The advocate did not steal; he held on to money that was not his. That is enough, and it is why the accounts rules in Module IV are rules and not advice.

Pattern two: the client's papers

R.D. Saxena v. Balram Prasad Sharma, (2000) 7 SCC 264, is worked in full in chapter [Duty to the Client III: Fees, and What an Advocate May Not Charge], and the holding is that an advocate has no lien over the client's litigation papers for unpaid fees, because files are not goods within section 171 of the Contract Act.

For this chapter the point is the disciplinary one. The Bar Council of India had debarred him for eighteen months and fined him Rs 1,000, and directed the return of the files, before the lien question ever reached the Supreme Court. Withholding a client's file is a disciplinary matter first and a question of the law of lien second.

Pattern three: changing sides

Chandra Shekhar Soni v. Bar Council of Rajasthan, AIR 1983 SC 1012, (1983) 4 SCC 255, decided 20 July 1983 by A.P. Sen, E.S. Venkataramiah and R.B. Misra JJ.

Facts. Two charges. First, the advocate accepted the brief of the accused after having appeared for the complainant in the same criminal case. Second, he procured the complainant's brief in another case on a fee of Rs 300 on the representation that he would secure a favourable radiologist's report showing a fracture of the skull, and wrote the radiologist a letter saying "Your amount is lying with me... Please, do his work and it should be done positively in his favour", after which a second report recording a fracture was sent. His defence that the letter concerned a newspaper advertisement was disbelieved.

Held on the first charge. The State Bar Council had wrongly treated changing sides as merely unprofessional rather than as professional misconduct. Accepting the brief of the other side while retained by one party is clearly contrary to rule 33 of the Bar Council of India Rules; it is not in accordance with professional etiquette for an advocate retained by one party to accept the brief of the other; and it is unprofessional to represent conflicting interests except by express consent given by all concerned after a full disclosure of the facts.

Held on punishment. In an appeal under section 38 the Court will not as a general rule interfere with concurrent findings of fact unless they rest on no evidence or on conjecture. But taking a lenient view because he was an inexperienced junior and the incidents were of 1971, the Court reduced the suspension from three years to one year.

Note the pairing. Chandra Shekhar Soni reduced a punishment; Harish Chandra Tiwari enhanced one. Both are section 38 appeals, and read together they show that the Supreme Court's function on such an appeal is to fix the punishment the misconduct deserves, in either direction.

Pattern four: taking an interest in the client's matter

P.D. Gupta v. Ram Murti, AIR 1998 SC 283, decided 8 July 1997 by S.C. Agrawal and D.P. Wadhwa JJ.

Facts. An advocate purchased property from a client which was the subject matter of a dispute in which he was acting, and then sold it at a profit.

Held. An advocate must not purchase property that is the subject of litigation in which he is engaged. Doing so is professional misconduct, because it sets his own interest against his client's and against the administration of justice.

The rules behind it are rule 22, on property sold in execution, and rule 22A, which is wider and covers acquisition by any mode of transfer of property that is the subject matter of a proceeding in which the advocate is engaged.

Pattern five: neglect that becomes deceit

V.C. Rangadurai v. D. Gopalan, AIR 1979 SC 281, (1979) 1 SCC 308, decided 4 October 1978 by V.R. Krishna Iyer, D.A. Desai and A.P. Sen JJ.

Facts. An advocate was entrusted by an old deaf client and his wife with two promissory notes for the filing of suits. He allowed the period of limitation to expire and then deceived the clients about what had happened.

Held. He was guilty of professional misconduct. On punishment the Court took a reformative view, reducing the period of suspension while making clear that the profession's standards are those of a trustee, that the relation between advocate and client is one of trust, and that the legal profession is a partner in the administration of justice rather than a trade.

Why the case is cited so often. Not for the neglect, which is common, but for the deceit, which converted a limitation mistake into misconduct, and for Krishna Iyer J's treatment of punishment as capable of being reformative.

The pattern behind the patterns

Every case above is a breach of trust, and stating it that way is what turns a list into an answer.

• Money received on the client's behalf is the client's money, not the advocate's, whatever the fee position: Tiwari, Kurapati Satyanarayana, Prahlad Saran Gupta.
• The file is the client's file: R.D. Saxena.
• The confidence is the client's confidence, so it cannot be carried to the other side: Chandra Shekhar Soni.
• The subject matter of the litigation is the client's, not something to trade in: P.D. Gupta.
• The client's reliance is the thing that makes deceit worse than error: V.C. Rangadurai.

A worked example

Kavita is instructed by an elderly widow to recover Rs 3,00,000 from a tenant. She receives Rs 40,000 for expenses and a fee of Rs 25,000. Four things happen.

The tenant pays Rs 1,00,000 into court and Kavita withdraws it in November. She does not tell her client and does not pay it over. By March the client discovers it.

That is the Harish Chandra Tiwari pattern exactly: money withdrawn on the client's behalf, not paid over, the client not told. Rules 26 and 27 required her to intimate the receipt to the client as early as possible and to record it. The gravity does not depend on the sum.

Kavita says she was entitled to keep it because her fee was unpaid. That is no answer. Rule 28 allows appropriation towards a settled fee only after the termination of the proceeding, and only out of money sent for expenses. Prahlad Saran Gupta shows that merely retaining a client's money without justification is misconduct even without dishonesty.

The client asks for her file. Kavita refuses until she is paid. R.D. Saxena: there is no lien over litigation papers, and the Bar Council of India in that very case debarred the advocate for eighteen months for it.

Kavita then accepts a brief from the tenant in a connected matter. Rule 33 and Chandra Shekhar Soni: having acted for one party she may not act, appear or plead for the opposite party, and it is unprofessional to represent conflicting interests except by express consent of all concerned after full disclosure.

What punishment? That is chapter [Punishment for Misconduct: The Four Orders Under Section 35(3)]. The range in these cases runs from a reprimand (Prahlad Saran Gupta) through one year (Chandra Shekhar Soni, reduced) and eighteen months (R.D. Saxena) to removal from the roll (Harish Chandra Tiwari, enhanced).

What beginners get wrong

The size of the sum is not the measure. Rs 8,118 produced removal from the roll.

Dishonesty need not be proved. Retaining money without justification was enough in Prahlad Saran Gupta.

Repayment after discovery does not cure it. It may affect punishment; it does not answer the charge.

There is no lien, so withholding the file is itself misconduct.

Changing sides is misconduct, not merely bad manners. Chandra Shekhar Soni corrected a State Bar Council that had drawn exactly that distinction.

An appeal under section 38 can increase the punishment.

Quick revision

• Harish Chandra Tiwari v. Baiju, AIR 2002 SC 548: Rs 8,118 compensation withdrawn on 2 September 1987 for a poor illiterate client, not paid over, client not told. Bar Council of India suspended three years; the Supreme Court enhanced to removal from the roll.
• Bar Council of Andhra Pradesh v. Kurapati Satyanarayana, AIR 2003 SC 175: receiving a client's money and failing to account for it or return it is misconduct.
• Prahlad Saran Gupta v. Bar Council of India, AIR 1997 SC 1338: Rs 1,500 retained for a considerable period without justification; conduct not befitting an advocate; reprimand substituted for suspension. Dishonesty need not be shown.
• R.D. Saxena v. Balram Prasad Sharma, (2000) 7 SCC 264: no lien over the client's papers; the Bar Council of India had debarred him eighteen months and fined Rs 1,000.
• Chandra Shekhar Soni v. Bar Council of Rajasthan, AIR 1983 SC 1012: changing sides is clearly contrary to rule 33; unprofessional to represent conflicting interests except by express consent of all concerned after full disclosure; suspension reduced from three years to one for an inexperienced junior.
• P.D. Gupta v. Ram Murti, AIR 1998 SC 283: buying the property in dispute from a client and selling at a profit is misconduct.
• V.C. Rangadurai v. D. Gopalan, AIR 1979 SC 281: letting limitation expire on two promissory notes for an old deaf client and deceiving him about it; the relation is one of trust, and punishment may be reformative.

Test yourself

1. What did the Supreme Court do to the punishment in Harish Chandra Tiwari, and why? It enhanced it from three years' suspension to removal from the roll, holding that misappropriating the money of a poor and illiterate client is among the gravest professional misconducts and that the disciplinary committee had treated it too lightly.

2. Must dishonesty be proved before a failure to account is misconduct? No. In Prahlad Saran Gupta the advocate retained Rs 1,500 received on his client's behalf in his own hands for a considerable period without justification, and that alone was held to be conduct not befitting an advocate, a reprimand being substituted for the suspension.

3. On what footing did the Supreme Court hold that changing sides is misconduct? That accepting the brief of the other side while retained by one party is clearly contrary to rule 33 of the Bar Council of India Rules, that it is not in accordance with professional etiquette, and that it is unprofessional to represent conflicting interests except by express consent given by all concerned after a full disclosure of the facts.

4. Why did the Court reduce the punishment in Chandra Shekhar Soni? Because the advocate was an inexperienced junior member of the Bar and the incidents dated from 1971. The Court strongly deprecated the conduct but reduced the suspension from three years to one year.

5. An advocate buys, at a profit, the property his client is litigating about. Which case and which rules? P.D. Gupta v. Ram Murti, with rule 22 on property sold in execution and rule 22A, which is wider and covers acquisition by any mode of transfer of property that is the subject matter of a proceeding in which the advocate is engaged.

6. What converted the advocate's neglect into misconduct in V.C. Rangadurai? The deceit. He allowed limitation to expire on two promissory notes entrusted to him by an old deaf client and his wife, and then deceived them about what had happened. The Court treated the relation as one of trust and the profession's standard as a trustee's.