DEVENDRA BHAI SHANKAR MEHTA versus RAMESHCHANDRA VITHALDAS SHETH AND ANR.

Citation: [1992] 2 S.C.R. 687 · Decided: 22-04-1992 · Supreme Court of India · Bench: N.M. KASLIWAL · Disposal: Dismissed

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Judgment (excerpt)

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DEVENDRA BHAI SHANKAR MEHTA 
A 
v. 
RAMESHCHANDRA VITHALDAS SHETH AND ANR. 
APRIL 22, 1992 
[N. M. KASLIWAL AND G. N. RAY, JJ.] 
B 
Advocates Act, 1961: 
Sections 35, 36, 36-B, 38-Advocate-f'rofessional misconduct-Al-
legations of defrauding and cheating aspirant loanees-Proceedings before 
C 
State Bar Council and Bar Council of India-Findings of Disciplinary Com-
mittee that concerned advocate and financier being parties to racket defrauded 
aspirant /oanee in receiving large sum of money on pretext of legal expenses 
and other incidental costs for advancing proposed loan-f>unish-
ment-R.emoval of name of advocate from Roll of State Bar Council-
Validity of. 
D 
Bar Council of India-Disciplinary Committee-Proceeding against ad-
vocate-+'indings based on facts-Standard of proof required to establish. 
The appellant was an Advocate practising in Bombay. Respondent 
No.I (the complainant) made a complaint to the Bar Council of 
Maharashtra alleging professional misconduct against the appellant. His 
case was that he was a proprietor of a firm engaged in a business of 
manufacturing. He was in need of financial accommodation and a finan-
E 
cier impressed upon him that on examination of his papers by a solicitors' 
firm run by the appellant, he would be given loan. He was also told that 
F 
the appellant was also one of the investors. The complainant on such 
representation agreed to get loan through the financier. On inspection of 
properties of the complainant the financier told him that a loan upto Rs.7 
lakh would be advanced to him provided he would pay at the rate of 5-1/2% 
on the advance of amount of loan towards legal and other expenses. In a 
meeting held at the residence of the appellant in connection with the G 
proposed loan the appellant told the complainant that he was an advocate 
of a certain firm and he worked only for the genuine financiers and would 
look to the interests of the loan seekers. He also told that he was himself 
a member of the internal group of the financiers. The appellant induced 
the complainant to part with certain· money for legal expenses ~nd in-
H 
687 
688 
SUPREME COURT REPORTS 
(1992) 2 S.C.R .. 
A 
formed him that out of 5-1/2% of the amount of loan required to be paid 
by him by way of legal expenses. the appellant would keep 3-1/2% for the 
stamp duty payable to the Government. He also told that the disbursement 
could be expedited only ifthe complainant paid cash to the financier before 
certain date. On the stipulated date the complainant paid Rs.25,000 to the 
B 
c 
financier. He also paid the balance of Rs.13,500 to the appellant. There· 
after the appellant made all attempts to delay the disbursement and asked 
the complainant to pay Rs.10,000 more which the latter paid. However, the 
proposed loan was not disbursed and instead of it, the financier m"ade a 
complaint· against the complainant in the Social Security Branch. 
The complainant made a complaint to the CID Branch of Bombay 
Police against the financier and the appellant. The financier was charge-
sheeted. On the advice of the police the complainant made an application 
to the Maharashtra Bar Council. He also alleged that the appellant had 
indulged in fraudulent activities in respect of other persons and attached 
D a list of witnesses to the complaint. The appellant challenged the proceed· 
ings before the High Court, but the Writ Petition was dismissed and the 
proceedings before the State Bar Council continued. 
E 
F 
The complaint before the State Bar Council could not be disposed 
of within the statutory period and the case stood transferred to the 
Disciplinary Committee of the Bar Council of India. Meanwhile the finan· 
cier died. The Disciplinary Committee analysing the evidences dispas-
sionately and considering the affidavits filed on behalf of both the parties 
as also the affidavits filed by some witnesses alleging that they had also 
become the victim of fraudulent action and cheating by the financier and 
the appellant, held that there was a racket for defrauding and/or cheating 
to aspirant loanees, and the financier and the appellant-advocate. were. 
parties to such racket; that the appellant in connivance with the financier 
defrauded the complainant in r:e~eiving large sum of money on the pretext 
G 
of legal expenses and other incidental. costs for advancing the proposed 
loan to the complainant, but such loan was never advanced to him; that 
the appellant had received Rs.10,000 from th

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