DEVENDRA BHAI SHANKAR MEHTA Vs. RAMESHCHANDRA VITHALDAS SHETH

JUDGEMENT

(1.) This Civil Appeal is directed against the order dated June 30, 1990 passed by the Disciplinary Committee of the Bar Council of India under Section 36B of the Advocates Act, 1961 in BCI Tr. Case No. 127 of 1988 arising out of the complaint made before the Bar Council of Maharashtra in D. C. No. 22 of 1987. Shri Ramesh Chandra Vithaldas Sheth made a complaint on February 9, 1987 to the D. C. No. 21 of Bar Council of Maharashtra against the respondent Devendra Bhaishankar Mehta, an Advocate practising in Bombay inter alia alleging professional misconduct against the said advocate. It was alleged by the respondent complainant, that he carries on business of manufacturing at Jhalod and he owns a proprietary firm named as M/s. Ravi Dyechem Manufacturing Industries and M/s. Vithaldas Dye Stuff Manufacturing Company. The complainant was in need of financial accommodation and was in search of a reliable financier and one Mr. Balu Bhai Modi impressed the complainant that they would give financial accommodation on being satisfied about the documents of security. It was represented to the complainant that a firm of Solicitors run by the said Shri Devendra Bhaishankar Mehta would examine the papers for the purpose of financing and the said Shri Devendra Bhai Mehta was also an investor. The complainant on such representation agreed to get financial loan through the said Balu Bhai Modi. The complainant alleged that an inspection of factory and other premises at Jhalod was made by Shri Balu Bhai and he was informed that the said properties were in excellent condition and the estimated value was Rs. 12 lakhs. He was also assured that since the properties were valuable and in excellent condition a lower rate of interest would be considered and he was also told that a loan up to Rs.7 lakhs would be advanced to him provided the complainant would pay a draft or cash at the rate of 5 and 1/2% on the advance of the amount of loan towards legal and other expenses. He was also informed that a meeting of the financiers would be held including Mr. Devendra Bhai Mehta who was one of such financiers. Thereafter a meeting was arranged at the residence of the said Shri Devendra Bhaishankar Mehta and in such meeting Shri Devendra Bhaishankar Mehta falsely represented to the complainant that he was an advocate of the firm of Solicitors M/ s. Dayalji and Deepchand and he worked only for the genuine financiers and he would look to the interests of the loan seekers. Shri Devendra Bhaishankar Mehta also represented to the complainant that he was himself a member of the internal group of the financiers who would advance the loan and hence he was not only preparing the mortgage deed for the proposed loan but also scrutinising it for his own satisfaction. He also assured the complainant that once the mortgage deed was drafted by him the complainant would get loan'within ten days because thereafter only the formalities were required to be gone into.The said Shri Mehta induced the complainant to part with money for legal expenses and informed the complainant that out of 5 and 1/2% of the amount of loan required to be paid by the complainant by way of legal expenses, Shri Devendra Bhaishankar Mehta would keep 3 and 1/2% for the stamp duty avable to the Government and he also represented that the disbursement could be expedited only if the complainant would pay cash to Balulbhai Modi on April 10, 1986. Shri Devendra Mehta also promised that he would see that the loan proposal was passed in the internal group of meeting of the financiers of which he himself was one of the financiers and he would ensure that Shri Balu Bhai Modi would sanction the loan as early as possible. Thereafter Shri Devendra Mehta had inspected the documents and returned most of the original documents and assured the complainant that he would get loan in a few days. On April 10, 1986 the complainant went to the office of Shri Balu B. Modi and handed over to him a sum of Rs. 25,000/- for the loan of Rs. 7 lakhs @ 14%. Shri Balu B. Modi told the typist to prepare the stamp receipt and also informed the complainant to arrange for the payment of balance of Rs. 13,500/-. The complainant. informed him that he would pay the balance to Shri Devendra Mehta at the time of disbursement of loan. Shri Balu Bhai Modi told the complainant to pay to Shri Devendra Mehta within a week and he instructed the typist to put the date as April 17, 1986 by which date the complainant would pay the balance sum of Rs. 13,500/-

(2.) The complainant alleged that thereafter he had contacted Shri Devendra Bhaishankar Mehta who represented to the complainant that if the complainant could not pay the balance of Rs. 13,500/ - in a week, how internal group of financiers would believe that the complainant would repay the loan of Rs. 7 lakhs. He, therefore, advised the complainant that he should pay a balance of Rs. 13,500/- and the complainant accordingly paid the said balance sum. Shri Devendra Bhaishankar Mehta, thereafter, made all attempts to delay the advancement of loans by unending demands and the complainant had to forward about 200 documents to Shri Devendra Bhaishankar Mehta, but Shri Mehta ultimately conveyed to the complainant through Shri Balu Bhai Modi that as the clearance certificate under Section 230A(i) of he Income-tax Act had not reached the office of the concerned authorities and as the said advancement of loan was very heavy, he would neither advance his share of finance nor he would agree to the disbursement until a sum of Rs. 10,000/- would be handed to Shri Devendra Bhaishankar Mehta. The complainant caused an enquiry and came to know that the Certificate under Section 230 A(i) had reached the office on June 5, 1986. However, paid Rs. 10,000/- in July, 1986 to Shri Devendra Bhaishankar Mehta in the presence of Shri Balu Bhai Modi, when Shri Devendra Bhaishankar Mehta told the complainant that he would issue the receipt at the time of the disbursement of the loan and he should be trusted. The complainant further alleged that despite such payment and other steps taken by the Complainant, instead of disbursing the proposed loan, Shri Balu Bhai Modi lodged a false complaint against the complainant in Social Security Branch of Bombay Police on September 5, 1986.The complainant thereafter made an application to the C. I. D. Branch of Bombay Police on September 8, 1986. The Complainant alleged that because of the friendly relationship by the racketeers including the said Shri Balubhai Modi and Shri Devendra Bhaishankar Mehta with the police, nothing was heard about his complaint but ultimately on the personal intervention by the Commissioner of Police, Bombay, his application was duly registered and Shri Balubhai Modi was chargesheeted in Criminal Case No. 1110/ 86. The complainant was advised by the Police to make an application to the Bar Council against Shri Devendra Bhai Mehta. The complainant also alleged in his petition of complaint to the State Bar Council that Shri Devendra Bhai Mehta had indulged in fraudulent activities in respect of other persons and a list of witnesses was attached to the said letter of complaint. As the complainant case before the State Bar Council could not be disposed of within the statutory period, the complaint stood transferred to the Disciplinary Committee of the Bar Council of India and numbered as B.C.I. Tr. Case No. 127/ 88. As aforesaid, the judgment dated June 30, 1990 in the B.C.I. Tr. Case No. 127 of 1988 is the subject matter of Civil Appeal No. 4437 of 1990.

(3.) When the complaint case was pending before the Disciplinary Committee of the State Bar Council of Maharashtra, the said Disciplinary Committee called upon the appellant to file an affidavit. Pursuant to the direction of the State Bar Council of Maharashtra, the appellant filed an affidavit dated November 26, 1987 indicating therein the particulars of the documents drafted by the appellant at the instance of the said Shri Balubhai Modi for advancing loans to different persons intending to get loan accommodation. The complainant-respondent also deposed before the Disciplinary Committee of the State Bar Council and had applied for issuing summons to the witnesses namely to the deponents of the affidavits affirmed by Shri Munjibhai M. Shah and Shri Devendra Shashikant Dyanmhotre, who had stated in their affidavits that they had also become victim of fraudulent action and cheating by the said Shri Balubhai Modi in connivance with the appellant Devendra Mehta. The appellant opposed examination of such persons as witnesses in the proceedings inter alia on the ground that the said affidavits had disclosed independent grievances of the deponents and the said deponents had not complained before the Bar Council. It, however, appears that the State Bar Council of Maharashtra overruled such objections of the appellant. The appellant in an attempt to stall the proceeding before the State Bar Council moved a Writ Petition under Articles 226 and 227 of the Constitution of India being Writ Petition No. 1897 of 1988 in the High Court of Bombay inter alia challenging the legality and validity of the said complaint proceeding before the State Bar Council. Such Writ Petition, however, was rejected by the Bombay High Court on April 27, 1988 and the matter thereafter proceeded before the State Bar Council and then stood transferred to the Disciplinary Committee of the Bar Council of India. The Disciplinary Committee of Bar Council of India examined and recorded evidences of Prafulchandra Shah (CW 2), Munjibhai M. Shah (CW 3), Shashikant D. Dyanmhotre (CW 5), Bhawanji Bharot (CW 6) and Mahesh Ramanlal Shah (CW 4). It may be noted here that Mahesh R. Shah (CW 4) an advocate had acted for Prafulchandra Shah in Criminal Case. The appellant and complainant had also deposed in the said disciplinary proceeding before the Bar Council of India and their respective statements were also recorded.