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EXTENT OF LIABILITY OF DOCTORS AND LAWYERS REGARDING ADVICE TO CLIENTS

2017-06-27 11:04:59
EXTENT OF LIABILITY OF DOCTORS AND LAWYERS REGARDING ADVICE TO CLIENTS

CBI, Hyderabad v Narayana Rao[i]

The CBI had registered a case under Sections 120-B, 419, 420 of IPC against the Branch manager and Asst. Manager of Vijaya Bank at Hyderabad for abusing their official position and defrauding the bank by sanctioning housing loans to 22 borrowers in violation of the Bank’s rules and guidelines and thereby causing wrongful loss of Rs. 1.27 Crores to the Bank, and also included the Respondent (who was a Panel Advocate of the Bank) in the Charge-sheet submitted to the Court. The allegation against him is that he gave false legal opinion in respect of 10 housing loans. He subsequently filed a petition under Section 482 of the Code before the High Court of Andhra Pradesh at Hyderabad for quashing of the criminal proceedings. The High Court granted the same, and the CBI appealed to the Supreme Court. The Supreme Court observed that the only allegation against him is that he submitted false legal opinion about the genuineness of the properties in question.  The Supreme Court upheld the HC decision, and the Respondent was absolved of the liability. The case also laid dawn certain principles of immunity to lawyers and doctors, which provide some advantage to professionals in respect of the advice rendered to clients in good faith.

The Decision of the Court

The Court stated that “A lawyer does not tell his client that he shall win the case in all circumstances. Likewise a physician would not assure the patient of full recovery in every case. A surgeon cannot and does not guarantee that the result of surgery would invariably be beneficial, much less to the extent of 100% for the person operated on. The only assurance which such a professional can give or can be given by implication is that he is possessed of the requisite skill in that branch of profession which he is practising and while undertaking the performance of the task entrusted to him, he would be exercising his skill with reasonable competence.”

Under these circumstances, the Court went on to state that “ A professional may be held liable for negligence on one of the two findings, viz., either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess.”

The Court elaborated that “merely because his opinion may not be acceptable, he cannot be mulcted with the criminal prosecution, particularly, in the absence of tangible evidence that he associated with other conspirators.”

However, the Court also pointed out that a lawyer owes an “unremitting loyalty” to the interests of the client and it is the lawyer’s responsibility to act in a manner that would best advance the interest of the client.

 

 



INDIAN KANOON

[i] CRIMINAL APPEAL NO.  1460  OF 2012, Supreme Court of India

 

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