V. C. Rangadurai vs D. Gopalan And Ors

 

Vande Matram! Here a case regarding the professional misconduct of an advocate is discussed.

V. C. Rangadurai vs D. Gopalan And Ors

Equivalent citations: 1979 AIR 281, 1979 SCR (1)1054

Bench: Krishnaiyer, V.R.

Petitioner: V. C. Rangadurai

-Vs-

Respondent: D. Gopalan and others

Act: Advocates Act, 1961, Article 19 of Constitution of India.

Facts of the case:

1) Appellant is a middle-aged man and has grossly misconducted himself and deceived a common client. He had been suspended from practice for one year.

2) The appellant had duped the respondents who are an old-aged couple. Appellant had not filed the suits on two promissory notes of respondents which were executed by their land-lady who had borrowed money from them, by deposit of title deeds.

3) A plaint for recovery of the amount due on one promissory note with interest was returned for presentation to proper court along with the required court fee, but it was never represented. Again plaint for recovery of the amount of second promissory note was drafted by the appellant but no such suit was filed. Further appellant made a false representation to respondents that the suits had been filed and gave them the various dates fixed in those suits, and later on, falsely told them that the court had passed decrees based on the two promissory notes.

4) On the faith of such representation the complainants served a lawyer's notice to their land-lady and called upon the debtor to pay the amount due under the decrees.

5) In denial of the charge the appellant pleaded that in past the debtor landlady was his client so he advised the respondents to engage some other counsel and told them that he had handed over the matter to another advocate. The other advocate pleaded that he signed Vakalatnama as junior, he never met the respondents, he had not been instructed to file the suits. Respondents issued the notice to both the advocates.

6) Observations of Disciplinary Committee of State Bar Council: In the said matter that other advocate who signed the Vakalatnama had become a witness. As per the disciplinary committee,

a) There was no reason to reject the evidence of the junior advocate.

b) Appellant who is a senior advocate tried to throw up his client.

c) The record does not establish that respondents were introduced to junior advocate by the appellant and then he was accepted as counsel in charge of the case.

d) Appellant miserably failed in his duties towards his fellow advocate very much junior to him.

Observations of Supreme Court:

1) It is not per professional etiquette for one advocate to hand over his brief to another to take his place at a hearing (either for the whole or part of the hearing), and conduct the case as if the latter had himself been briefed unless the client consents to this course being taken.

2) A lawyer when entrusted with a brief, is expected to follow the norms of professional ethics and try to protect the interests of his clients, with whom he occupies a position of trust. The appellant completely betrayed the trust reposed in him by the respondents.

Punishment:

1) State Disciplinary Committee: suspended him from practice for six years.

2) Disciplinary Committee: taken a lenient view and reduced the period of suspension from six years to one year.

3) As per Supreme Court: Opined that taking too lenient a view, in this case, would not be conducive to the disciplinary control of the State Bar Councils. The court dismissed the appeal and maintained the punishment imposed on the appellant.

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Bar Council Of Maharashtra vs M. V. Dabholkar Etc. Etc

 

Vande Matram! Here a case regarding the professional misconduct of an advocate is discussed.

Bar Council Of Maharashtra vs M. V. Dabholkar Etc. Etc

Equivalent citations: 1976 AIR 242, 1976 SCR (2) 48

Bench: Krishnaiyer, V.R.

Act: Advocates Act, 1961

Facts of the case:

1) The respondents were lawyers practicing in criminal courts and they were charged with professional misconduct under Section 35(1) of the Advocates Act, 1961.

2) Respondents positioned themselves at the entrance to the Magistrates' Courts, watchful of the arrival of potential litigants, and at sight, rushed the clients in an ugly scrimmage to snatch the briefs. To lay claim to the engagements even by the physical fight to undercut fees, and by this unedifying exhibition sometimes carried even into the Bar Library, solicited and secured work for themselves.

3) The Bar Council of Maharashtra considered the complaint received from the High Court against the lawyers and referred the matter to its Disciplinary Committee for further probe.

4) The Disciplinary Committee of the State Bar Council held the respondents guilty of professional misconduct and suspended them from practicing as advocates for three years.

5) On appeal, the Disciplinary Committee of the Bar Council of India held that under R. 36 of the Rules framed under S. 49(c) of the Advocates Act to be amenable to the disciplinary jurisdiction the advocates must have (i) solicited work (ii) from a particular person and (iii) concerning a case. 

6) It held that unless the three elements were satisfied it could not be said that an advocate had acted beyond the standard of professional conduct and etiquette. It, therefore, absolved all the respondents of the charge of professional misconduct. The State Bar Council has come in appeal to this Court.

7) Disciplinary Committee of the state bar council had decided 8 matters separately and in each case, the concerned advocates were suspended from practice for three years. But the appellate disciplinary committee of the Bar Council of India had clubbed all matters.

Observations of Supreme Court:

1) The court upheld the competence to appeal under s.38 of the Advocates Act, 1961.

2) Justice cannot be attained without the stream being pellucid throughout its course and that is of great public concern, not merely professional care.

3) The profound regret of these cases lies not only in the appellate disciplinary tribunal's subversive view of the law of professional conduct that attempted solicitation by snatching briefs and catching clients is or no ethical moment, or contravention of the relevant provisions, but also in the naive innocence of fair and speedy procedure displayed by the State Disciplinary Tribunal in clubbing together various charges levelled against 16 advocates in one common trial, mixing up the evidence against many, recording omnibus testimony slipshodly, not maintaining a record of each day's proceedings, examining witnesses in the absence of some respondents, taking eight years to finish a trial involving depositions of four witnesses and the crowning piece, omission to consider the evidence against each alleged delinquent individually in the semi-penal proceedings.

4) As eight cases are clubbed together case-by-case disposal is desirable.

5) Dabholkar: The evidence against him is far from satisfactory and suffers from generalised imputation of misconduct against a group of guilty lawyers. He was a senior public prosecutor at age of 68 years. He had just four cases left with him which he desired to complete, having received fees. Also, he is willing to retire from the profession. On the evidence, we exonerate him from professional misconduct and otherwise we record his solemn statement to the Court.

6) Bhagtani: After examining the evidence, whatever was found extinguishes the charge against him. No need arises for punishing him.

7) Talati: He has been found 'not guilty' in appeal but, as we perused the evidence, it became fairly clear that some acts of misconduct had been made out, although the evidence suffered from omnibus implication. Further, he has given an undertaking expressing unqualified regret for his deviant behaviour and has prayed for the clemency of the Court, promising to turn a new leaf of proper professional conduct, if he were permitted to practice. In short, Court found him guilty and reluctantly restored the verdict of the original tribunal, but reduced the punishment to suspension from practice, as aforesaid.

8) Kelawala: Kelawala had become purblind and was ready to give an undertaking to the Court that he would no longer practice in the profession. In this view, Court did not disturb the finding of the Disciplinary Committee of the Bar Council of India.

9) Dixit: Evidence against this advocate was inadequate to bring him guilty of misconduct. Court readily hold him rightly absolved from professional misconduct.

10) Madalia: The evidence is so little that it is not possible or proper to pick out with precision and assurance any particular 'soliciting' act to infer guilt.

11) Doshi: He appears to have fair professional weather ahead in the City. Court holds him unblemished so far as the vice of solicitation is concerned, but caution him to refine himself in advocacy.

12) Raisinghani: Evidence shows that although he is 65 years old, the evidence shows that he has physically fought two rival advocates in the course of snatching the briefs from clients, entering the Esplanade criminal courts. He was a refugee from Pakistan. He has given an undertaking expressing remorse, praying to be shown clemency and assuring that, economic pressure notwithstanding, he will not go anywhere near professional pollution in the last years of his practice at the Bar. The court is inclined to take a sympathetic view of his septuagenarian situation, record his apology and assurance, restore the verdict of guilt by the State Disciplinary Committee but reduce the punitive part of it.

13) State Tribunal had taken 8 years for this enquiry.

14) As per the order of the Supreme Court all parties to the suit have to bear the cost.

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N.B. Mirzan vs The Disciplinary Committee Of The Bar Council of Maharashtra and another

Vande Matram! Here a case regarding the professional misconduct of an advocate is discussed.

N.B. Mirzan vs The Disciplinary Committee Of The Bar Council of Maharashtra and another

Equivalent citations: AIR 1972 SC 46, (1972) 4 SCC 412, 1972 (4) UJ 164 SC

Bench: S Sikri, D Palekar, A Ray

An appeal under Section 38 of the Advocates Act, 1961

Facts of the case:

1) The appellant, Mr. N. B. Mirzan, was an Advocate on the roll of the Bar Council of Maharashtra. Respondent no. 2 was the client of the appellant.

2) Respondent no. 2 made several allegations of professional misconduct against the appellant which were referred by the State Bar Council to its Disciplinary Committee.

3) Decision of State Disciplinary Committee: After a detailed inquiry into the allegations, the State Disciplinary Committee came to the conclusion that professional misconduct had been established on three counts which involved moral turpitude. The Committee, therefore, directed that the appellant should be suspended permanently and should not be allowed to appear before any Court, authority, or person in India.

4) Appeal was filed to the Bar Council of India by the appellant. The appeal was heard by the Disciplinary Committee of the Bar Council of India.

5) Decision of Disciplinary Committee: The Disciplinary Committee confirmed the findings of the State Disciplinary Committee but, as regards the punishment, it directed that the appellant be suspended from practice for five years and to pay to Respondent No. 2 a sum of Rs. 850/-within two months. If the amount was not paid, the punishment imposed by the State Disciplinary Committee striking out the appellant's name from the roll of Advocates would stand confirmed.

6) Appellant approached Supreme Court to challenge the decision of Disciplinary Committee of Bar Council of India.

7) Facts of the case of Respondent no. 2: Respondent no. 2 engaged appellant in case of obstructionist notice issued to him by the Presidency Small Cause Court, Bombay. The following transactions were done during the case:

a) Rs. 190/- for court-fee stamps, no formal receipt was issued. This is professional misconduct because no court fee stamps were necessary to be paid by respondent No 2 in an obstructionist notice and it was a false demand.

b) Rs. 975/- required for deposit in the above suit byway of rent and a receipt was issued by the appellant for this amount. This is professional misconduct because no order could possibly be passed by the Court asking an obstructionist to make a deposit in Court towards rent and it was a false demand.

c) Rs. 250/- necessary for payment to some Judge or officer for getting the rent bill transferred in the name of respondent No. 2 in respect of the premises which were the subject matter of the above suit and a receipt was issued by the appellant for this amount. This is professional misconduct because there could be no proceedings for transferring the rent bill in the name of respondent No. 2 in the absence of any negotiations with the landlord and it was a false demand.

All these transactions were done based on false demand of the appellant which is nothing but the misappropriation of the client’s money.

d) Further the landlord filed suit in the City Civil Court, Bombay against respondent No. 2 and his brother for ejectment and mesne profits. A written statement was filed admitting that no rent had been paid by respondent No. 2 to his landlord. City Civil Court passed an order directing respondent No. 2 to deposit in Court the amount due for arrears of rent. But an amount of Rs. 975/- given to appellant for deposit of rent which was more than sufficient for making the deposit by the order of the City Civil Court. Appellant gave notice to respondent No. 2 to come with the money for the purposes of deposit and the trouble started. No money transaction was incurred at this stage but respondent no. 2 came to know that his money has been misappropriated.

e) Before filing the complaint, a settlement was brought between appellant and Respondent no. 2 and the appellant undertook to pay to respondent No. 2 Rs. 1,000/-by installments of Rs. 150/-per month. The appellant sent the first installment of Rs. 150/-by money order.

Opinion of Supreme Court:

a) First transaction of Rs. 190/- was not having any receipt. Appellant impliedly denied the demand and receipt of Rs. 190/-since, admittedly, there was no formal receipt for it. But after examining witness Noor Mohammad who introduced Respondent no. 2 to the appellant, it was proved that Rs. 190/- were paid to the appellant for purchasing court fee stamps. This explanation has been rejected by both the Disciplinary Committees. Thus court opined that “We are, therefore, satisfied that the appellant had demanded and received Rs. 190/-for the purchase of court fee stamps in the beginning of his engagement as an Advocate, though, in fact, he did not have to purchase any court fee stamps.”

b) The amount of Rs. 975/- had been received by the appellant for making a deposit in Court against expenses or rent. It is further admitted by the appellant that no order had been made by the Court for the deposit of rent. The Court opined that “It is obvious that he obtained this amount on a false pretext and, when such a demand is made on a false pretext, the inference Would naturally follow that the demand had been made with a view to misappropriate the amount.”

c) Regarding Rs. 975/-, the appellant put forward the defence that this amount had been actually returned to respondent No. 2 in the court premises when the Obstructionist notice was discharged. In support of this, the appellant produced an alleged Receipt. Both the Disciplinary Committees were inclined to the view that this was a suspicious document if not a false document. Respondent No. 2, admitted that, when demanded by the appellant, he had put his thumb impression on a blank cartridge paper so that they could be used during his absence for the purpose of the litigation. After examining the witness regarding this receipt on ledger paper. Both the Disciplinary Committees have held that the receipt of payment given back to respondent no. 2 was not a genuine document and Supreme Court was also satisfied with this finding.

d) Money order of Rs. 150/- was the first installment of the settlement between appellant and respondent no. 2. For this appellant admitted that Respondent no. 2 requested him for a loan when respondent no. 2 visited him with a social worker. Out of pity, the appellant sent the money order for a loan. The explanation was regarded by both the Committee as false because under the circumstances of the case and because of the bitter disputes between the parties, it was extremely unlikely that the appellant would make any loan to respondent No 2. The story of the loan has been rejected by both the Committees. The court opined that “We, therefore, agree with the concurrent finding of both the Committees that the appellant had demanded and received Rs. 975/-from respondent No. 2 on a false representation that the amount was required to be deposited in Court and thereafter misappropriated the same.”

e) Amount of Rs. 250/- was demanded and received by the appellant from Respondent no. 2. For this appellant pleaded that he had been instructed by respondent No. 2 to file a declaratory suit for transferring rent bill in his name. The obstructionist proceedings were still pending and one does not know what kind of proceedings could be taken in a court of law for transferring the rent bill. Seeing that the story was unconvincing, the appellant changed his case later and started that this sum of Rs. 250/-was paid to him towards the court fees in respect of the intended declaratory suit, his fees, and other pocket expenses. The amount had been screwed out by the appellant on a false representation for the purposes of misappropriation.

Punishments:

The State Disciplinary Committee had permanently debarred the appellant from practising as an Advocate, but, in appeal, the Disciplinary Committee of the Bar Council of India has taken a more lenient view and suspended the appellant from practice for five years on condition that he pays respondent No. 2 Rs. 850/-within two months.

Order of Supreme Court:

As the result, the appeal fails and is dismissed with costs.

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P J Ratnam Vs D Kanikram, AIR 1964 SC 244

 

Vande Matram! Here a case regarding the professional misconduct of an advocate is discussed.

Appellant: P J Ratnam, Advocate

Vs

Respondent: D Kanikarma and other, Clients of P J Ratnam

Facts of the case:

Acts: Legal practitioners Act, 1879 (18 of 1879), Indian Bar Councils Act, 1926.

The respondents and one other Kagga Veeraiah, were plaintiffs in a suit for possession of certain lands and the appellant was their Advocate.  This suit was dismissed by the trial court and an appeal was preferred therefrom to the Subordinate Judge. Pending the disposal of the appeal, the court directed the sale proceeds of the standing crops on the suit land to be deposited into court, and a sum of Rs. 1,600/- was so deposited. The plaintiff's appeal was allowed and the defendants preferred a second appeal to the High Court. Pending disposal of the second appeal, the plaintiff's application for withdrawing the amount was allowed by the court on furnishing security of immovable property. A cheque petition was filed which was allowed and thereafter a cheque for Rs. 1,452/4/- was issued in favour of the appellant. The appellant an Advocate admitted that he had received and had cashed the cheque on behalf of his clients who were entitled to be paid this sum. The second appeal was allowed by the High Court and the plaintiff's suit was dismissed, as a result of which the plaintiffs had to refund the sum of the defendants in the suit. The plaintiffs made a written demand on the appellant for the proceeds of the cheque that had been cashed by him and not paid over to them. The appellant in reply claimed to have paid over the sum to them on their passing a receipt which happened to be in the bundle of case papers returned to them. The respondents filed a complaint under ss 12 and 13 of the Legal Practitioners Act. 

The explanation of the Advocate was called for and the District Judge was directed to hold an enquiry and forward his report to the High Court. His report was that the appellant’s case was not unbelievable and he was entitled to the benefit of doubt. The matter was heard by a Bench of three Judges of the High Court, who held him guilty of professional misconduct and suspended him for five years from practice. 

In this Court, the appellant contended,

(1)  That the Bar Council had not been consulted before the case was referred to the learned District Judge for inquiry and report and this vitiated the legality of the entire proceedings against the appellant. 

(2) That the complaint filed by the respondents on the basis of which action was taken against the appellant was not shown to have been signed by them, nor properly verified by them as required by the rules of the High Court.

(3) That as in substance the charge against the appellant was misappropriation of moneys belonging to the clients; the High Court should have left the complainants to their remedy of prosecuting the appellant and should not have proceeded to deal with him under s. 10 of the Bar Councils Act.

(4) That there was a procedural irregularity in the mode in which the case against the appellant was conducted.

(5) That one of the plaintiffs--Kagga Veeraiah had himself admitted in his evidence that he and others had received the proceeds of the cheque which the appellant had cashed and that in the face of this admission the High Court was clearly wrong in finding that the appellant had failed to pay over the money to his clients.

Held (1) that the fact that in the order of reference of the proceedings under s. 10(2) of the Bar Councils Act, to the District Judge, there is no explicit statement that the Bar Council had previously been consulted, is not decisive on the point. There would be a presumption of regularity in respect of official and judicial acts and it would be for the party who challenges such regularity to plead and prove his case.  Since, this objection was not raised in the High Court, even when the appellant applied for a certificate, this Court will not entertain this objection which rests wholly upon a question of fact.

(2) The complaint petition had been signed by the respondents and properly verified and even otherwise since the High Court was competent to initiate these proceedings suo motu under s. 10(2) of the Act, the point raised is wholly without substance.

(3) There is a clear distinction between cases where the misconduct is one in relation to the practitioner's duty to his client and other cases where it is not so. In the former class of cases, the court would be exercising its discretion properly if it proceeded to deal with the charge as a piece of professional misconduct without driving the complainant to seek his remedy in a criminal court far as the facts and circumstances of the present case are concerned, it must be held, that the High Court was fully justified in proceeding against the appellant under the provisions of s. 10 of the Bar Councils Act. Chandi Charan Mitter a Pleader, In re. (1920) I.L.R. 47 Cal.  1115 and Emperor v. Satish Chandra Singha, (1927) I,L.R. 54 Cal. 721, distinguished. Stephens v. Hills, [1842] 152 E.R. 368, referred to class.

(4) No complaint, that the appellant was prejudiced by the manner in which the inquiry was conducted in the matter of the order in which the evidence was adduced, was made either before the District Judge or before the High Court and there is nothing on the record to suggest that any prejudice had occurred to the appellant.

(5) The evidence of Kagga Veeraiah was correctly characterised by the High Court as devoid of truth and the appellant, therefore, cannot rely on any admission of this witness as evidence of the plaintiffs having received the sum.

Having regard to the gravity of the offence, there is no justification for reducing the period of suspension. The appeal, therefore, must be dismissed.

Opinions of Supreme Court:

1) Nature of jurisdiction of Court: “The jurisdiction exercised by the High Court in cases of professional misconduct is neither civil nor criminal as these expressions are used in Arts. 133 and 134 of the Constitution. In one aspect it is a jurisdiction over an officer of the Court and the Advocate owes a duty to the Court apart from his duty to his clients. In another aspect it is a statutory power and we would add a duty vested in the Court under s. 10 of the Bar Councils Act to ensure that the highest standards of professional rectitude are maintained, so that the Bar can render its expert service to the public in general and the litigants in particular and thus discharge its main function of co-operating with the judiciary in the administrance of justice according to law.”

2) “The object of a proceeding in respect of professional misconduct differs totally from the object of a proceeding in a criminal court.”

Punishments:

1) At High Court: High Court suspended Adv P for five years from practice.

2) Supreme Court: Supreme Court dismissed the appeal and Adv P was suspended for five years from practice for misappropriation of money of his clients.

Final Verdict of Supreme Court:

The appeal fails and is dismissed.

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In the matter of D, an Advocate AIR 1956 SC 102

Vande Matram! A judgment is discussed in this article.

In the matter of D, an Advocate AIR 1956 SC 102

Court: Supreme Court of India.

Facts of the matter:

1) Adv. D was an enrolled advocate of Bombay High Court. And thus he was having the right to practice in any court of the Union of India.

2) He was prosecuted before the Presidency Magistrate of Bombay for the charge under the Bombay Prohibition Act. He was convicted by the Presidency Magistrate. Also Presidency Magistrate in his report regarding the conduct of Adv D as an advocate.

3) Adv D went up on appeal to the High Court.

4) High Court on the report of Presidency Magistrate constituted a Bar Council Tribunal of Three Members. This tribunal called an inquiry regarding the conduct of Adv D as an advocate.

5) Adv D made an application under Article 227 to High Court for quashing the proceedings conducted by the bar council tribunal for want of jurisdiction. Adv D pleaded that Tribunal had no jurisdiction to enter upon the inquiry of the misconduct complained of was not committed by him in his capacity as an Advocate. But this application was rejected by High Court.

6) Adv. D forwarded an unconditional apology letter. In that letter, he admitted that statements in the report of the Presidency Magistrate are correct except for two of them. Tribunal held that the mere conviction of the respondent under the Prohibition Act did not amount to professional or other misconduct under Section 10 of the Indian Bar Councils Act and, therefore, found him not guilty of the charge of professional misconduct with a recommendation to take notice of the conduct of Adv. D. And report of this inquiry was submitted to the Bombay High Court.

7) In the final hearing of the appeal at High Court took the view that the misconduct of the respondent was so serious and so grave that a deterrent punishment must be imposed on him. High Court convicted Adv D for his unworthy conduct as an advocate during proceedings in front of Presidency Magistrate and Bar Council Tribunal.

8) Adv. D appealed in Supreme Court for the judgment of the High Court regarding his conduct as an advocate. Adv D in his petition in Supreme Court pleaded that the Report of Presidency Magistrate is a highly exaggerated, garbled, and manifestly incorrect version of the incidents that occurred during the trial of the case.

Observations of the Supreme Court:

“It is needless for us to emphasise that a person holding the responsible position of an Advocate of a High Court and of this Court cannot be permitted to play with the Court in the way this Advocate has done. He admitted the correctness of the report, confessed his guilt, and tendered an unconditional apology evidently in the hope that he would get away with it by merely tendering an apology. Finding that the tactics did not work with the High Court as he expected the same to do, he now wants to charge his tactics by asking for an inquiry which he had himself avoided by means of his admission and apology.”

Further, the court observed that “The conduct of the respondent in the criminal trial was, as pointed out by the High Court, entirely indefensible by any standard. It discloses a continuous and persistent attempt on the part of the respondent to be rude to and contemptuous of the Magistrate, to hold up the trial, and to do everything in his power to bring the administration of justice into contempt. Such conduct, in our opinion, merits severe condemnation.”

Thus the professional misconduct of Adv D was proved, which was vague and unethical as an advocate.

Punishments:

Adv D was sentenced at all the levels of the case

a) Presidency Magistrate: One month of rigorous imprisonment with a fine.

b) Bar Council Tribunal: No punishment pronounced but recommended to notice the behavior of Adv D.

c) High Court: Suspension of practice in High Court for one year.

d) Supreme Court: Suspension of practice in all Courts throughout the Union of India for one year.

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Elementary aspects of bookkeeping

Vande Matram! In this article, I am discussing, elementary aspects of bookkeeping in the legal profession.

Introduction:

Though the legal practice is not a money-oriented profession, there are a lot of transactions incurred by an advocate on daily basis regarding various cases he is looking after. Such transactions must be recorded efficiently and this recording is nothing but book-keeping. Book-keeping is a process of recording business transactions in the books of accounts in a very systematic manner. All the transactions are recorded date-wise. In India, this system of book-keeping was in Operation from the 23rd century ago at the time of Chandragupta Maurya. Chanakya was recording the accounting transactions. He wrote a famous book known as “Arthashastra”. Bookkeeping practices must be defined and tracked, so it does not distract Lawyers' billable time.

Meaning of bookkeeping:

Bookkeeping is the term used to record all business transactions in a law firm including financial transactions, sources of business revenue, profits, purchases, receipts, payments, reimbursements, and expenditures.

Many scholars have defined the term ‘book-keeping’ in their own way as follows:

1) J. R. Batliboi:  Book-keeping is an art of recording business dealing in a set of books".

2) R.N. Carter: "book-keeping is the science and art of correctly recording in the books of accounts, all those businesses transactions that result in a transfer of money's worth."

3) Spicer & Pegler: Book-keeping is the systematic recording of the transactions in a manner enabling the financial relationship of a business with other persons to be clearly disclosed and the cumulative effect of the transactions on the financial position of the business itself can be correctly ascertained.

4) Richard E. Strahelm: “The art of analyzing and recording business transactions, reporting the result of business operations through periodic statements and integrating such result for purposes of effective control of future operations."

5) Notch Cott - “Book-keeping is an art of recording in the books of accounts the monetary aspects of commercial or financial transaction."

Need of book-keeping by an advocate:

A businessman or a professional cannot remember each and every transaction without keeping account books regularly. He cannot also claim or recover any amount even though due from the other customer, client, or businessman. An advocate has to accurately manage the flow of money in and out and maintain a complete and precise record of all transactions.

This book can be used as a record for the settlement of fees with clients.

Having accurate monthly financial records helps advocate being aware of the balance of fees with a client, income, and expenses.

Also, in the matter of any professional misconduct, such a book can save the advocate as that book can show all the records of transactions.

Every advocate needs to keep a regular account which has certain evidentiary value also under the Indian Evidence Act, 1972.

The same book can be helpful in the income tax return as well as a professional tax return.

Principles of Book-Keeping

Tracking Every Activity: This includes tracking the hours devoted to clients, billing them for those hours, and keeping track of their payments when being received. The main point is to be accurate in tracking and simply not to let anything slip through.

Tracking Every Expense: Many transactions are incurred when an advocate is working for his client. Tracking all the expenses on such transactions is a must. These must be reported correctly.

Recording in Ledgers: Bookkeeping ledgers hold financial accounts and transactions. For every client, a separate page must be assigned in the ledger and all the transactions regarding expenses and fees received must be recorded in it. Ledger provides a summary of income and expenses, regularly and serves as the authoritative source of data for financial accounting reports.

Thus bookkeeping is necessary to fulfill duties towards the clients by an advocate. Also, bookkeeping helps in the easy assessment of accounts with clients at the time of settlement of fees and it is having an evidentiary value also.

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Accountancy for an advocate: Rules and need

 

Vande Matram! In this article, I am discussing, accountancy for an advocate which is in the light of the Bar Council of India rules, and the Advocates Act, 1961. Let’s begin.

Introduction:

The legal profession is ethical, and though it is not a money-making business still various transactions are encountered while dealing with a matter of a client. An advocate must keep a record of all the transactions related to a matter and disclose these transactions to the relevant client at the end of the case. Hence accountancy is necessary for an advocate. Advocates Act is silent on such account keeping but the Bar Council of India rules state the rules for accountancy for an advocate.

Bar Council of India rules for accountancy:

It is the duty of an advocate towards his client that he should maintain an account of his client. The rules of such accounting are dealt with in rules 25 to 32 of the Bar Council of India Rules 1975. The rules are as follows:

Rule 25: An advocate should keep the accounts of the client’s money entrusted to him. The accounts should show the amounts received from the client, the expenses incurred for him and the debits made on the account of Advocate fees with the respective dates and all other necessary particulars.

The account of a client will have entries regarding fees paid by the client, expenses done by the advocate regarding his case, and the date of all such transactions. These entries should be clear.

Rule 26: Where moneys are received from the client, it should be entered whether the amount have been received for the advocates fees or expenses. Amount received for the expenses shall not be diverted towards Advocates fees without the consent of the client in writing.

The client can give money on account of expenses to be done for his case or on account of the fees of the advocate. The money given by the client should be entered in the account book and each entry should have the purpose mentioned for such transaction.

Rule 27: Where any amount is received on behalf of his client the fact of such receipt must be intimated to the client as early as possible.

In any case, if an advocate receives any money on behalf of his client, then the advocate must inform about this transaction to his client as early as possible.

Rule 28: After the completion of the proceeding, the advocate shall be at the liberty to take the settled fee due to him to the unspent money in his hand.

After completion of the proceeding related to a case, if there is some unspent money with advocate given to him for expenses by the client, and also his fees are due with the client then the advocate can settle the account with the client by deducting unspent money from his fees with the consent of the client.

Rule 29: Where the fee has been left unsettled, the advocate shall take the fees which he is legally entitled from the moneys of the client remaining in his hands, after the completion of the proceeding. The balance shall be returned to the client.

After settling the fees with unspent money, the advocate has to return the surplus money given to him by the client on account of expenses at the end of the proceedings of the case.

Rule 30: A copy of the client account shall be furnished to him after getting the necessary copying charges from him.

Copy of account must be given to the client.

Rule 31: An advocate shall not make any agreements whereby client’s funds in his hands are converted into loans to the advocate.

An advocate cannot enter into an agreement by which either client’s funds in his hands become loans to him.

Rule 32: An Advocate shall not lend money to his client for the purpose of conducting the case.

The advocate cannot lend money to his client to conduct a matter which he is looking after.

Purpose of maintaining an account by an advocate:

The basic purpose of accounting is to present a complete financial picture of the Advocates profession. It is necessary to maintain proper accounts to calculate the following

(i) Annual Income: As accounts are maintained by an advocate, his annual income can be seen clearly for any purpose.

(ii) Income Tax: It is necessary for income tax payment and filing the tax record.

(iii) Professional Tax: As legal practice is a profession, professional tax shall be paid by an advocate. For this purpose, the record of his professional income and expenses must be kept.

(iv) Amount due to the client or amount due by the client: To settle the fees due with the client it is necessary to keep the separate account of each client as mentioned in BCI rules.

Client’s account:

Client’s Account: For each and every client separate pages shall be allotted in the ledger and a separate account shall be maintained for them. You ought to maintain a record of your engagements, containing the terms of your settlement with the client, his address, and any other special instructions he may have given.

In a case, in the Madras High Court, the learned Judges made the following observation. ’We think it necessary also to say that this case brings out very clearly the desirability of legal practitioners keeping separate accounts of their own money and their clients’ money and seeing that their clients’ money is deposited in a bank in a separate account. If that is done it will be easy for a pleader to refrain from spending his clients’ money for purposes other than his clients’ and, if his conduct is questioned, to show that he has not transgressed the limits of professional good conduct.’

Other accounts:

(i) Fees Account: In this account, the fees received from each and every client shall be entered separately. From this account, the total amount of fees received from all the clients in a financial year can be ascertained.

(ii) Rent Account: An account for rented office premises if any must be maintained. This can be treated as a professional expense.

(iii) Salary Account: An advocate having staff in his office maintain the salary account and details of salary, bonus, gifts, and hand loans given to staff must be entered. This is also a professional expense.

(iv) Library Account: An advocate has to keep his legal knowledge up to date and for this, he must access various law libraries which may be at court premises or maybe online. An advocate should maintain an account for membership of such libraries. This is treated as a professional expense of an advocate.

(v) Printing and Stationery Account: A lot of paperwork for pleadings and proceedings is to be done which require stationery and printing and Xeroxing – all such expenses are professional expense and such entries must be recorded.

(vi) Postage and Telegram Account: Communication is the backbone of the legal profession. Each transaction done for the communication by way of postage or telegram must be recorded. This is also a professional expense.

(vii) Electricity Charges, Conveyance Charges, Repairing, and Maintenance are other professional expenses done and entries of these transactions must be done in an account book.

Bar Council of India Rules

Note: Part in Red words is part of Bar Council of India Rules.

If you want to know about specific provisions of the Advocates Act, 1961 and the Bar Council Rules then let me know in the comments below.

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