‘Conclusion must have reasons to stand on’: Supreme Court sets aside unreasoned BCI order dismissing revision petition on Advocates’ professional misconduct

Supreme Court: In an appeal filed against the order passed by the Bar Council of India (‘BCI’) wherein it upheld the order passed by the Bar Council of Delhi (‘BCD’) dismissing appellant’s complaint alleging professional misconduct committed by the respondent-advocates, the division bench of Dipankar Datta and Manmohan, JJ. set aside the impugned order by noting that BCI order merely has six lines for dismissing the revision without recording any reason at all.

Background

The present dispute arises from the appellant’s engagement of the respondents as legal counsel for their companies, Madras Petrochem and Mahavir Plantations. The appellant alleges that the respondents violated their fiduciary duty by representing the appellant while having a conflict of interest. In 2006, the respondents formed a company, Dhir & Dhir Asset Reconstruction and Securitization Company Ltd. (‘D&D ARC’), which became entangled with the appellant’s businesses, causing a direct conflict of interest.

The respondents acquired sensitive financial information under the guise of providing legal advice, only to use it for their personal benefit by purchasing the debts of the appellant’s companies at a discounted rate. The respondents continued to act as legal advisors while pursuing their personal financial interests, thereby breaching their professional obligations.

When the conflict became apparent, the appellant filed a complaint before the Bar Council of Delhi (‘BCD’) in 2013 for professional misconduct. However, the BCD dismissed the complaint based on a No Objection Certificate (‘NOC’) provided by the appellant, and BCI upheld this decision in a brief order. The appellant now appeals this decision, asserting that the respondents’ actions constitute professional misconduct and a clear breach of fiduciary duty.

Analysis and Decision

The Court noted that the impugned BCI order merely spares six lines for dismissing the revision without recording any reason at all.

After referring to Rani Lakshmi Bai Kshtriya Gramin Bank v. Jagdish Sharan Varshney, (2009) 4 SCC 240, the Court reiterated that that an order of affirmation may not require elaborate reasons as required in the case of an order of reversal but it does not mean that such order of affirmation need not contain any reason at all. Whether or not there was application of mind can only be disclosed by reason, howsoever briefly alluded to.

The Court highlighted that what follows from the above is that the ‘what’, i.e., the conclusion, must have the ‘why’, i.e., the reasons (at least in brief), to stand on, which is conspicuous by its absence in the impugned order of affirmation.

Therefore, the Court set aside the revisional order of the BCI.

The Court directed BCI to re-consider the revision petition and pass a fresh order after hearing the parties, in accordance with law, within six months from date of this order.

The Court clarified that no opinion is expressed on merits and all points are left open for being agitated by the parties before the BCI.