Jurisprudence of ‘face value’ – High Court of Kerala is an exception



                               – By Mathews J. Nedumpara

I enrolled as an Advocate with the Bar Council of Kerala in the year 1984.  By sheer providence, I was briefed by a partnership firm engaged in the business of banking, in the year 1986 in the Kerala High Court.  That was the time when many individuals, either styled as a Partnership or a Company, used to take huge deposits, particularly from NRIs, offering astronomical rates of interest.  They functioned quite similar to regular banking institutions.  The only difference is that they received  deposits at the rate of 24 % to 36 %  and used to lend money at 120%.  Apart from so lending the money, they used to divert the funds for their own private business, particularly in real estate.  There were hundreds of complaints against my client.  In one set of complaints, the allegation was that my client who had accepted deposit failed to repay the same when demanded in terms of the agreement/contract and thereby committed the offence of cheating.  The allegation in the other set of complaints was that the depositor had entrusted the money with my client and by failing to repay the same he has committed criminal breach of trust.

I filed a petition under Section 482 of the Criminal Procedure Code for quashing the complaints.  My contention was that no offence of cheating was made out because the sole allegation is that the depositor had made the deposit of his own volition and free will; that my client failed to repay the same when demanded and, therefore, it does not amount to cheating, but a mere civil breach of contract.  My further plea was that in order to constitute an offence of cheating, the depositor ought to have been induced to make the deposit, he being deceived by my client, and no such deception being alleged against my client and the complaint being that my client had failed to repay the money deposited, no offence of cheating is made out.  My client’s plea was that no offence of criminal breach of trust is also constituted, for, there was no entrustment because the money which was deposited with my client’s Bank is not money over which the depositor had any dominion.  Relying on Foley v Hill, (1848) 2 HLC 28, 9 ER 1002, my plea was that the moment the money has reached the teller of the Bank it becomes the banker’s money who is free to utilize the same in whatever manner he likes with an obligation to repay the same when demanded and the failure to do so will only amount to a civil breach of contract. 

 I then was a lawyer of just two years’ standing, but the learned Single Judge before whom the matter was placed for hearing heard my contentions with all the seriousness they deserved, allowed me to argue to my full satisfaction and referred the matter to a Division Bench.  Not only my client, but there were many individuals who were running private banking business, not governed by any law and under no one’s supervision.  These parallel Banks were, probably, even more important than the mainstream Banks in terms of the investments they could attract.  A run of one private Bank had meant, otherwise known as blade Bank, a devastating chain reaction.  The depositor public was the NRIs who had invested their life savings in these Banks offering 24% to 36% rate of interest.  These private Banks collapsed like a pack of cards one after another unable to bear the brunt of the run, for, these Banks, who had lent money at 60% to 120% without any security, could not have recovered the money lent in short notice.  The entire public opinion was against the blade Banks.  Not only the learned Single Judge but even the Division Bench which heard the matter upon reference by the former gave me such a dignified treatment, almost 33 years ago, which I cannot dream today, even after having crossed the age of 60 years, from the Bombay High Court, the Delhi High Court or the Supreme Court or any High Court in North India where I had occasion to appear.  The case thereafter came to be listed before another Division Bench, which was not that kind to the cause which I represented, and dismissed the case.

 What prompted/provoked me to pen these few lines is the experience I had on 28.06. 2019 before the Bench presided over by the Chief Justice of the Bombay High Court when I sought to represent the commonman from the suburbs who have lost their sleep over the coastal road, their long-cherished dream being put to jeopardy, by means of PILs.  The Bench headed by the Chief Justice, without affording a fair hearing, dismissed our plea for intervention, observing that we can take the matter in appeal.  I thought of penning these few lines because I consider it as my duty, leading a campaign for transparency and accountability in judiciary, demanding, in particular, video-recording of proceedings of all Courts and Tribunals in the country, open selection and appointment of Judges by inviting applications, abolition of the system of designation of lawyers as Senior Advocates, which is discriminatory of lawyers and results in denial of justice to the poor litigants who cannot afford a senior lawyer.

 I practised in High Court of Kerala for 15 years continuously till 1999.  I had a fair amount of practice, besides being a Standing Counsel for the Central Government, the Railways, many banking institutions and a fair amount of private briefs, as well.  I was quite a successful first generation lawyer.  Till 1999 I have never ever heard the words ‘face value’.  I have never ever seen lawyers being designated as Senior Advocates and treated differently based on their standing.  In the High Court of Kerala, my first appearance was before Justice Chandrasekhara Menon.  His Lordship treated me, for that matter every junior lawyers who had appeared before him, the way Shri Fali S. Nariman is treated in the Supreme Court.  I am not sure whether the High Court of Kerala observes the same standards today in terms of impartiality, objectivity and independence for which it was known when I started my practice 35 years ago.  The Kerala High Court did not even think of designating any lawyer as a Senior Advocate till 1994.  It was Justice U.P. Singh, an Advocate-On-Record of the Supreme Court-turned Judge, when transferred as Chief Justice of the Kerala High Court, who introduced the system of designation of lawyers as Senior Advocates, the most pernicious one, so far as the just and fair system of administration of justice is concerned; so too the dignity of lawyers qua lawyers.  If I could rely on my memory, when Chief Justice U.P. Singh offered designation as Senior Advocate, most of the senior lawyers, whom he had recommended, were uncomfortable with the idea, for, they felt what useful purpose would be served by the same, will it not amount to division of the Bar?  It was after quite an amount of persuasion that the Chief Justice could make many of them agree to be designated as Senior Advocates.

 To my mind, the system/practice of designation of lawyers as Senior Advocates and the collegium system of appointment of Judges are the two things which are most pernicious to the institution of judiciary.  Enormous damage has already been caused, for, the said two pernicious factors make many common people think that Judges belong to the elite class who cannot sense the pain, sorry and agony of the commonman, that Judges treat lawyers and litigants differently and that justice is only for the rich.  I may be forgiven for saying that there is a great divide between the South and the North.  I happened to appear for the first time in the Bombay High Court after being at the Bar for 20 years.  I expected the Bar and the Bench in Mumbai to be far superior in quality and standards than in the Kerala High Court, for, lawyers there in comparison have less exposure.  However, what I could see with my own eyes, feel, hear and sense here came as a rude shock.  In the Bombay High Court, a lawyer of my age and standing would have to stand behind a practising son of a Judge or a senior lawyer and brief him.  Why? Because the sons and daughters of Judges and senior lawyers designated as Senior Advocates enjoy ‘face value’.  The other lawyers are shooed away; they are ridiculed, insulted, no matter what is their age and standing.