CENTRAL BUREAU OF INVESTIGATION,

HYDERABAD. VS. K. NARAYANA RAO

Vinod yadav
B.A.LL.B(2020-2025)
Professional Ethics
 INTRODUCTION:
This case was filed against a lawyer. The following allegations put on him were, he
conspired against the bank by not discharging his duty. The Court by considering the
prima facie evidences held that unless there are sufficient evidences against the
respondent the Court won’t hear the case in the first place. The lack of facts was held
due to the fact that there was no prior meeting of minds, which is the basic essential of
conspiracy and it was not satisfied. Hence it was clearly held that there was no
conspiracy on the part of the lawyer.
Secondly, it was held that the lawyer didn’t discharge his duty properly. While
considering whether a professional is negligent or not, the courts consider whether the
services provided by him are of a reasonable standard. Not everybody practicing a
profession be an expert but should possess the requisite skills that the profession
demands. The documents which were submitted to the lawyer were forged. Had he been
asked to check the veracity of the document, and failure to do so will amount to
negligence? But he was asked to submit a legal opinion on it for which he did. Thus,
there is no negligence on his side.
 FACTS OR HISTORY OF THE CASE:
On 30.11.2005, the CBI, Hyderabad registered an FIR against (A-1) and (A-2) , the then
[2] [3]

Branch Manager and the Assistant Manager, respectively of the Vijaya Bank, Narayanaguda
Branch, Hyderabad, for committing offences punishable Under Sections 120B, 419, 420,
467, 468, 471 read with Section 109 of the Indian Penal Code, 1860 and Section 13(2) read
with Section 13(1)(d) of the Prevention of Corruption Act, 1988 for abusing their official
position as public servants and for having conspired with private individuals, viz.,(A-3) and
[4]

(A-4) and other unknown persons for defrauding the bank by sanctioning and disbursement
[5]

of housing loans to 22 borrowers in violation of the Bank’s rules and guidelines and thereby
caused wrongful loss of Rs. 1.27 crores to the Bank and corresponding gain for themselves.
After completion of the investigation, the CBI filed charge sheet along with the list of
witnesses and the list of documents against all the accused persons. In the said charge sheet,
Shri K. Narayana Rao, the Respondent, who is a legal practitioner and a panel advocate for
the Vijaya Bank, was arrayed as (A-6) . The duty of the Respondent as a panel advocate was
[6]

to verify the documents and to give legal opinion. The allegation against him is that he gave
false legal opinion in respect of 10 housing loans.
 ISSUES:
1.) Whether the respondent failed to discharge his duty by giving
false legal opinion?
a) Whether the A-6 failed to point out the ownership of the
properties?
b) Whether the A-6 failed to point out the forgery in the
construction permission issued by the municipal authorities by
means of their legal opinion?
2) Whether the respondent conspired against the bank, which
resulted a considerable loss to the bank?
a) Whether there was any agreement among the parties in looting
the bank?
ARGUMENTS AND COUNTER- ARGUMENTS:
1. ARGUMENT: The main duty of the A-6 was to provide legal
opinion on the submitted relevant documents. Failure in
discharge of duty of the A-6 has resulted in the approval of loans
which in turn resulted in loss for the bank (about 1.27 crores).
COUNTER-ARGUMENT: Investigation has revealed that
the construction permission procured from the municipal
weren’t genuine. The allegations on A-6 were not substantiated
with concrete evidence. It was also pointed out that a panel
advocate is not capable of investigating the genuineness of the
documents. It is to be noted that no one out of the 78 witnesses
pointed out the involvement of A- 6 in the conspiracy.
1. ARGUMENT: A-6 conspired against the bank by giving false legal
opinion. Thus, his name was included in the charge sheet.
COUNTER-ARGUMENT: Criminal conspiracy can be conceived only if
there’s an agreement among the parties to deceive. But in this case there is
no evidence that such an agreement existed between the respondent and the
other accused. An act is said to be criminal if there’s a criminal intent but
in this case the ingredient of intention is absent. It is to be noted that the
FIR didn’t bear the name of the respondent but the charge sheet did.
2. ARGUMENT: The A- 6 was negligent in discharging his duty which
resulted in loss for the bank.
COUNTER-ARGUMENT: It is not necessary for every professional to be
experts in their position. A professional is to be judged based on comparing
the professional’s action with that of an ordinary man. In this case, the A-6
had possessed the requisite skills. Hence, he was not negligent.
 HOLDING:
1. It was held that until or unless there’s sufficient evidence against a
person to prove his guilt, there’s no use in hearing the case in the
first place. The Court has the power to quash an FIR filed against a
person if there’s no sufficient ground to prove their guilt.
[7]

2. A strong suspicion is a necessary ingredient to proceed forward with

a forgery case.
3. If there are no prima facie evidence against the accused the
magistrate has the power to dismiss the case.
4. If there are two possible views, and one of it gives rise to suspicion
only but not grave suspicion, the judge is empowered to discharge
the accused. He is not obliged to see whether the trial will end in
acquittal or conviction.
 JUDGMENT:
Since there was no prima facie evidence against the respondent, there is no
need in proceeding with the case further. Hence, the Supreme Court agreed
with the High Court’s judgment in quashing the criminal allegations against
the respondent. Thus, the appeal was dismissed.
The accused Involved in the case:
[2] (A-1) Shri P. Radha Gopal Reddy.
(A-2) Shri Udaya Sankar.
[3]

(A-3) Shri P.Y. Kondala Rao – the builder.

[4]

(A-4) Shri N.S. Sanjeeva Rao.

[5]

(A-6) Sri K. Narayana Rao.

[6]

State of Haryana v. Bhajan Lal MANU/S.C./0115/1992: 1992 Supp (1)

[7]

S.C.C. 335 (India).