Raipur: The Chhattisgarh High Court ruled that financial losses resulting from a lawyer’s opinion alone cannot justify prosecution and do not constitute active participation in fraud cases. A division bench comprising Chief Justice Ramesh Sinha and Justice Amitendra Kishore Prasad stressed that evidence of intentional fraud and active conspiracy are essential, while quashing charges against a 70-year-old senior lawyer affiliated with the Bank of State of India.
The case involved Ramkinkar Singh, a senior lawyer with 38 years of practice, who challenged the orders of the Judicial Magistrate First Class and the Additional Sessions Judge of Bemetara. As an advocate of the SBI, the petitioner provided a certificate of non-encumbrance for land mortgaged by Hariram Chandrakar under the Kisan credit card scheme.
The borrower allegedly obtained the loan using falsified documents for non-existent assets, using the petitioner’s search report in the process. An FIR dated August 2, 2018 initially named the borrower as the main accused. Subsequently, an additional indictment included the petitioner for allegedly negligently issuing a search report, leading to charges under sections 420, 467, 468 and 471 of the Act. Indian Penal Code1860.
The petitioner’s defense cited CBI v. K. Narayana Rao (2012), arguing that accountability advocate requires active participation in fraud. They argued that the petitioner had simply provided a professional opinion based on the available documentation. The state representation pointed out inconsistencies in land documents and highlighted the bank’s financial losses resulting from the petitioner’s audit.
SBI counsel noted that petitioner continued to be a member of the panel, reflecting continued confidence in his professional abilities. The court noted the absence of the petitioner in the initial FIR and found no evidence of collaboration between him and the borrower. His continued engagement with SBI has demonstrated the bank’s trust. The court referred to the K. Narayana Rao judgment requiring proof of negligence or active participation in fraud for professional liability.
The court found that there was insufficient prima facie evidence for the charges under sections 420, 467, 468 and 471 of the IPC relating to active participation or negligence. SC recognized that the petitioner’s actions were consistent with normal professional practices.