BCI can conduct full-fledged inquiry into misconduct by State Bar Council members: Kerala HC in 7 crore welfare fund misappropriation case

The Kerala High Court yesterday held that the Bar CounciI of India (BCI) is empowered to make a full-fledged inquiry into the affairs of the Kerala Advocates Welfare Fund Trustee Committee with respect to the misappropriation of Rs. 7 crore detected between 2007 and 2015. (Kerala HC - BCI order).The order passed by Chief Justice S Manikumar and Justice Shaji P Chaly reads, ."...if a member of the Bar Council or members of the Trustee Committee, who are members of the Bar Council, have committed any irregularity, misappropriation and misconduct, it would be only just and proper that, the enquiry is conducted by the Bar Council of India, which is an independent body, which alone would be in a position to conduct impartial enquiry against the members of the Council."Kerala High Court .The Division Bench additionally noted that the amount from the Welfare Fund is a solace to the Advocates and their family in the 'Hey day' in life and it shall be released as and when applied for it by the beneficiary. Therefore, the Bench pointed out that if any fraudulent acts like the case at hand are permitted, it will cause fetter to the rights of the advocates..Factual BackgroundDuring the year 2017, certain irregularities were detected with respect to the Kerala Advocates Welfare Fund constituted as per the provisions of the Kerala Advocates Welfare Fund, 1980. Consequently, in connection with the above, an employee of the Bar Council of Kerala, who was also discharging the functions of the Welfare Fund Trustee Committee, was arrested, and a case was registered by the Vigilance and Anti-Corruption Bureau. .In addition to this, it so happened that on October 3, 2018, at a felicitation function organised by the Supreme Court Bar Association (SCBA), Attorney General for India KK Venugopal pointed out the issue of misappropriation of about Rs 7 crores by the trustees of the Bar Council of Kerala..Taking serious note of this, the BCI proceeded to constitute a four-member committee comprising retired High Court judges, to enquire into the aforesaid allegations. On October 6 of that year, the BCI forwarded a resolution to the Bar Council of Kerala naming the appellant in the present cases as one among those responsible for the misappropriation of funds..This move of BCI was challenged by certain advocates before the High Court. The Single Judge of the Court, however, went on to hold that the BCI is empowered to conduct inquiry into any irregularity of the Welfare Fund Trust Committee. Agrrieved by the order, an appeal was filed before the Division Bench..Aruguments of Parties.The appellants mainly contended that except the vague and general statement about the information conveyed by some lawyers of Kerala, no tangible material or complaint in writing regarding the misappropriation of funds was before the BCI, when it passed the October 2018 resolution..It was further argued that the BCI did not have the power to pass a resolution to institute an inquiry into the alleged irregularities and misappropriation of funds managed by the Kerala Advocates Welfare Fund Trustee Committee. .What the Court held.The Court firstly observed that as per Section 7(1)(d) of the Advocates Act, 1961, the BCI is conferred with a duty to safeguard the rights, privileges and interests of advocates. Further, according to clause 7(1)(g), BCI further has powers of general supervision and control over the State Bar Councils as well, the Court observed. .Adding on, the Court noted that the fund was constituted in accordance with the provisions of the Advocates Act.."Therefore, whatever rules made by the Bar Council of Kerala is by virtue of the powers conferred under the Act, 1961, and whereby the supervisory powers of the Bar Council of India conferred under section 7 of Act, 1961 enables the Bar Council to conduct necessary enquiry if and when it receives any information or complaint with respect to the misappropriation of funds constituted as per the provisions of Act, 1961, Act, 1980 and the Rules framed thereunder."Kerala High Court .Further, after a thorough perusal of all the relevant sections of the 1961 Act, the Court proceeded to state, ."Therefore, on an appreciation of the said provisions also, it is clear and convincing that, the Bar Council of India is conferred with power coupled with duty for ensuring the functioning of the State Bar Council and the committees constituted effectively and properly, and ensuring that no manner of prejudice is caused to the welfare and well being of the advocates.".On perusing the provisions of the Kerala Advocates Welfare Fund Act, 1980, the Court came to the conclusion that the Trustee Committee is not an independent committee detached from the State Bar Council..In view of the above, the Court rejected the appellant's contention that the Trustee Committee constituted as per the 1980 Act is carrying out its functions without any control of the State Bar Council. ."Therefore, on a harmonious and conjoint reading of the provisions of Act, 1961 and Act, 1980, it is clear that the Bar Council of India is having power for controlling the members of the State Bar Council and in turn certain of the members of the Trustee Committee since the Trustee Committee includes members of the State Bar Council, nominated by the State Bar Council, and that apart the Treasurer and the Secretary of the State Bar Council are the Treasurer and Secretary of the Trustee Committee."Kerala High Court.This apart, the Court further added that,"Moreover, the members of the Bar Council are all practising Advocates, and if any misconduct is detected, the Bar Council of Kerala is vested with powers to take appropriate action irrespective of the fact that they are members of the Bar Council.".The Court thus dismissed the appeal, hoping that a full-fledged inquiry into into the entire affairs of the Welfare Fund Trustee Committee in relation to the pilferage of Rs. 7 crore would be conducted by the BCI-appointed committee..Read order here