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TMI Blog2022 (11) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... owing the Application I.A (IBC)/43/2021 filed by the Respondent No.1- a member of the Suspended Board of the Corporate Debtor, certain observations have been made against the Appellant. Challenging the same, this Appeal has been filed. In the Appeal, the Appellant has prayed for following reliefs:- "RELIEFS SOUGHT i. Expunge the remarks made against the Appellant in the impugned final order dated 08.04.2022 passed by the Hon'ble Adjudicating Authority, Guwahati Bench in I.A. No. 43/2021 in CP (IB) No. 09/GB/2019. ii. Allow the present appeal in terms of prayer (i). iii. That this Hon'ble Appellate Tribunal may pass any other or further orders as are required in the facts and circumstances of the present matter and in the interests of justice." 2. We need to notice only relevant facts of the case which are necessary for deciding the present Appeal. 2.1. On an Application filed by Financial Creditor- 'Stressed Assets Stabilization Fund (SASF)' under Section 7, the Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor- 'National Plywood Industries Ltd.' by order dated 26.08.2019. The Resolution Professional published Form-G dated 09.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air, biased, motivated and lacking in transparency. 7.3 An order be made removing the respondent no. 3 in the matter. 7.4 An order be made disqualifying the respondent no. 4 as a Resolution Applicant in this matter. 7.5 Such further or other order or orders be made and/or direction or directions be given as to this Hon'ble Court may seem fit and proper. 7.6 To grant any further relief that this Hon'ble Court may deem fit and proper for the ends of justice." 2.2. The Adjudicating Authority heard I.A. No. 43/2021 and by order dated 08.04.2022 disposed of I.A and issued various directions. The Appellant aggrieved by the prejudicial observations made by the Adjudicating Authority against him has come up in this Appeal and as noted above, in the Appeal, the only prayer is to expunge the remarks made against the Appellant in the order dated 08.04.2022. 3. We have heard Counsel for the Appellant as well as Counsel for the Respondent No.1 and 4. Both the parties have also filed their brief notes of arguments. 4. The order passed by the Adjudicating Authority notices submissions made by the Petitioner (Respondent No.1 before us) in detail. In paragraph 16 of the order, submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the matters of Insolvency where time, confidentiality and balancing act matter." 5. Learned Counsel for the Appellant submits that from the observations made in paragraph 17.3, it is clear that the Adjudicating Authority has observed that the Appellant has appeared for the Resolution Professional in the CIRP of the Corporate Debtor and has also appeared on behalf of the Resolution Applicant (Respondent No.4- 'PLBB Products Pvt. Ltd.'). The very basis of observations by the Adjudicating Authority that Appellant has appeared for Respondent Nos.2 and 4 is unfounded. Appellant was not representing Respondent No.4 in the CIRP of the Corporate Debtor. The Appellant had filed an Application under Section 7 on behalf of 'Damayanti Tea Industries' a separate company and on the basis of factum of the Appellant filing Section 7 Application on behalf of 'Damayanti Tea Industries', the Adjudicating Authority has jumped to the conclusion that the Appellant has appeared both for Respondent Nos.2 and 4 which observation is factually incorrect. There was no breach of any transparency nor there was any conflict of interest in appearing of the Appellant for Respondent No.2 in the CIRP of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 7 Application filed by 'Damayanti Tea Industries' has no concern with the subject matter of CIRP of the Corporate Debtor. No prohibition can be read in the statutory provision governing appearance of an Advocate in representing a different company in separate proceedings filed under Section 7. The present is not a case that Appellant has appeared for Resolution Professional and Resolution Applicant i.e. Respondent No.4 in the CIRP of the Corporate Debtor. 10. Learned Counsel for the Appellant has referred to Part- VI of the 'Bar Council of India Rules, 1975' ("Rules, 1975" for short) which contains the Rules governing Advocates. Chapter II of the Rules, 1975 deals with 'Standards of Professional Conduct and Etiquette'. Rule 33 of the Rules, 1975 provides:- "33. An advocate who has, at any time, advised in connection with the institution of a suit, appeal or other matter or has drawn pleadings, or acted for a party, shall not act, appear or plead for the opposite party." 11. Rule 14 of the Rules 1975 may be also relevant which is to the following effect:- "14. An advocate shall at the commencement of his engagement and during the continuance thereof, make all such full and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is professional colleagues but may also adversely impact his professional career. If the comments remain unexpunged in the court judgments, it will be a cross that the Appellant will have to bear, all his life. To allow him to suffer thus, would in our view be prejudicial and unjust. 18. In view of the forgoing, we are of the considered opinion that the offending remarks recorded by the learned judge against the appellant should not have been recorded in the manner it was done. The appellant whose professional conduct was questioned, was not provided any opportunity to explain his conduct or defend himself. The comments were also unnecessary for the decision of the Court. It is accordingly held that the offending remarks should be recalled to avoid any future harm to the appellant's reputation or his work as a member of the Bar. We therefore order expunction of the extracted remarks in paragraphs 4,5,6, and 7 of this judgement. The appeals are accordingly disposed of with this order." 14. We are of the view that the observations made by the Adjudicating Authority in paragraph 17.3 and other part of the judgment were not necessary for deciding the issues which had come up for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and confidence which cannot be delegated without consent. A lawyer when entrusted with a brief, is expected to follow the norms of professional ethics and try to protect the interests of his clients, in relation to whom he occupies a position of trust. The appellant completely betrayed the trust reposed in him by the complainants. 32. It is needless to stress that in a case like this the punishment has to be deterrent. There was in this case complete lack of candour on the part of the appellant, in that he in a frantic effort to save himself, threw the entire blame on his junior, K. S. Lakshmi Kumaran. The evidence on record clearly shows that it was the appellant who had been engaged by the complainants to file suits on the two promissory notes for recovery of a large sum of Rs. 20,000/- with interest due thereon. There was also complete lack of probity on the part of the appellant because it appears that he knew the debtor, Smt. Maragathammal for 7/8 years and had, indeed, been appearing for her in succession certificate proceedings. If there was any conflict of interest and duty, he should have declined to accept the brief. What is reprehensible is that he not only accepted th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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