Legum Baccalaureus (LLB) -PAPER-V: Professional Ethics and Professional Accounting System 5th Semester Syllabus Short Notes
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PAPER-V
SYLLABUS
SHORT NOTES
UNIT – 1
DEVELOPMENT OF LEGAL PROFESSION IN INDIA
Pre-Independence
Era:
-
Ancient India: No formal
legal profession; scholars and local rulers handled legal matters.
-
British Influence: The
British established formal courts, starting with the Supreme Court of Calcutta
(1774) and later the Indian High Courts (1861), where advocates started
practicing law under British regulations.
Post-Independence
Reforms:
-
Advocates Act, 1961: The key legislation regulating
the legal profession, which created the Bar Council of India (BCI), State Bar
Councils, and defined the eligibility, discipline, and conduct of advocates.
-
The Act provides for the right to practice law as a
right under Article 19(1)(g) of the Constitution, but subject to reasonable
restrictions.
Key
Developments:
-
Legal Education: Law
schools like National Law Universities (NLUs) were established, and All India
Bar Examination (AIBE) was introduced in 2010.
-
Globalization: Indian
lawyers now engage in international law, corporate practice, and legal process
outsourcing (LPO).
Challenges:
-
Issues like access to justice, delayed court
processes, and ethical concerns remain.
In
essence, India’s legal profession evolved from a colonial system to a regulated
and globalized entity, with ongoing reforms aimed at improving access and
efficiency.
THE ADVOCATES ACT, 1961
The
Advocates Act, 1961 is the primary legislation that governs the legal
profession in India. It establishes the framework for regulating and
controlling legal education, the practice of law, and the role of the Bar
Council of India (BCI) and the State Bar Councils.
Key
Provisions:
-
Section 3:
Establishment of the Bar Council of India.
-
Section 17:
Establishment of State Bar Councils in every state.
-
Section 24:
Eligibility criteria for enrolment as an advocate.
-
Section 49: Power of
the BCI to make rules regarding legal education, professional conduct, and
practice.
RIGHT TO PRACTICE: A RIGHT OR PRIVILEGE?
The
right to practice law in India is considered both a right and a privilege:
Right:
It is a fundamental right under Article 19(1)(g) of the Indian Constitution,
which guarantees all citizens the right to practice any profession or carry on
any occupation, trade, or business.
Privilege:
Although it is a right, the right to practice law is also a privilege that is
subject to the regulations and standards established by the Bar Council of
India. For example, only those who fulfill the qualifications (law degree,
AIBE) and are enrolled with a State Bar Council are allowed to practice law.
CONSTITUTIONAL GUARANTEE UNDER ARTICLE 19(1) (G) AND ITS SCOPE
Article
19(1)(g) of the Indian Constitution provides that all citizens have the right
to practice any profession or carry on any occupation, trade, or business. This
includes the right to practice law, which is an essential part of the legal
profession.
However,
this right is subject to reasonable restrictions under Article 19(6). For
example:
-
The Advocates Act regulates the eligibility to
practice law and requires enrollment with a Bar Council.
-
The Bar Council of India and State Bar Councils have
the power to discipline advocates for professional misconduct, thereby limiting
their practice in cases of violations.
Case Law: T.K.
Rangarajan v. The State of Tamil Nadu (2003): The Supreme Court held that while
the right to practice law is a fundamental right under Article 19(1)(g), it can
be regulated by the Advocates Act, 1961, and other reasonable restrictions in
the interest of public welfare.
ENROLMENT AND PRACTICE
To practice
law in India, an individual must fulfill the following conditions:
Eligibility:
A law degree from a recognized university, and passing the All India Bar
Examination (AIBE).
Enrolment:
An advocate must enroll with a State Bar Council before they can practice law.
The enrollment process includes verification of qualifications and other
criteria set by the State Bar Council.
Once
enrolled, the advocate is entitled to practice in any Indian court, tribunal,
or authority.
REGULATION GOVERNING ENROLMENT AND PRACTICE
The
Advocates Act, 1961 and the rules framed by the Bar Council of India regulate
the enrolment and practice of law in India. Key regulations include:
Eligibility:
Advocates must hold a law degree from a recognized institution, and some State
Bar Councils may require an advocate to pass an All-India Bar Examination
(AIBE).
Professional
Conduct: The BCI Rules of Legal Ethics set the standard for
professional behavior, confidentiality, and advocacy practices.
Disciplinary
Action: The BCI and State Bar Councils have the authority to
take disciplinary action against advocates for violations of professional
conduct, which may include suspension or removal from the roll of advocates.
LATEST BCI RULES
The Bar
Council of India (BCI) has established various rules to regulate the practice
of law in India. These rules ensure that the legal profession maintains high
standards of education, ethics, and conduct. Some of the important and latest
rules include:
The Bar
Council of India Rules:
The BCI
rules govern several aspects, including:
-
Legal Education: Ensuring
that law schools provide quality education and training.
-
Professional Conduct and Etiquette:
Advocates must adhere to ethical practices, ensuring that they do not mislead
clients, courts, or engage in corrupt practices.
-
Enrollment Rules: Advocates
must enroll with a State Bar Council to practice law, as per the qualifications
set under the Advocates Act, 1961.
BCI's Code
of Conduct:
-
The Bar Council of India’s Code of Ethics provides
guidelines on the professional conduct of lawyers, including duties towards
clients, courts, and other lawyers.
-
It emphasizes the duty of an advocate to act in a
manner that maintains the dignity of the profession and the judiciary.
Recent
Revisions:
-
Lawyers' Fees: The BCI has occasionally issued
recommendations regarding reasonable fee structures for legal services to
ensure fairness and prevent exploitation.
-
Online Practice: In light of technological
advancements, the BCI has also updated rules to facilitate the use of
technology in legal practice, including the e-filing of cases and virtual
hearings.
PRACTICE OF LAW
The
practice of law refers to providing legal services and representing clients in
legal matters. To practice law in India, an individual must:
-
Obtain a law degree from a recognized university.
-
Clear the All India Bar Examination (AIBE).
-
Enroll with a State Bar Council.
Once
enrolled, an advocate can practice in any Indian court, tribunal, or authority.
The practice of law encompasses:
-
Representation: Advocates
represent clients in civil, criminal, and other cases.
-
Legal Advice: Providing
legal opinions, drafting contracts, and offering counsel on legal matters.
-
Litigation: Filing
petitions, appearing before courts, and arguing cases.
ALL INDIA BAR EXAMINATION (AIBE)
The All
India Bar Examination (AIBE) is a mandatory exam for law graduates who wish to
practice law in India. It was introduced by the Bar Council of India (BCI) in
2010.
Purpose:
The AIBE tests the competence of law graduates to practice law in Indian
courts.
Eligibility:
To appear for the AIBE, a candidate must have completed a law degree (LLB) from
a recognized institution and enrolled with a State Bar Council.
Content:
The exam consists of multiple-choice questions covering subjects like:
-
Constitutional Law
-
Civil Procedure Code (CPC)
-
Criminal Procedure Code (CRPC)
-
Law of Evidence
-
Professional Ethics
-
Other relevant areas of law.
Passing the
AIBE: A candidate must pass the AIBE to receive a
Certificate of Practice that allows them to appear in court as an advocate.
ADVOCATES AND SOLICITORS’ FIRM
In India,
the practice of law is often done by individual advocates or through Advocates'
Firms or Solicitors' Firms.
Advocates'
Firms: These are typically formed by advocates who come
together to handle cases in specific areas of law, such as corporate law,
intellectual property, or civil litigation.
The
Advocates Act, 1961 allows lawyers to form partnerships and firms, but they are
bound by the rules laid down by the Bar Council of India, especially the restrictions
on sharing legal fees.
Solicitors'
Firms: While solicitors' firms are more common in
jurisdictions like the UK, they are not traditionally common in India. However,
they can exist in India, provided they adhere to the regulations under the
Advocates Act. In India, solicitors are generally governed by the Solicitors'
Act, 1949.
Solicitors’
firms often deal with corporate law, conveyancing, and legal advisory services.
ELEMENTS OF ADVOCACY
Advocacy is
the art and practice of representing clients in legal matters. The elements of
advocacy are the qualities and skills that every advocate should possess to
effectively represent clients and uphold the integrity of the legal profession.
Knowledge
of the Law:
-
A thorough understanding of legal principles,
statutes, case laws, and procedural law is fundamental for effective advocacy.
-
An advocate must stay updated on legal developments
and judicial pronouncements.
Skill in
Legal Research:
-
Successful advocacy relies on the ability to research
and analyze legal precedents, statutes, and case law.
Communication
Skills:
-
Effective advocacy requires strong oral and written
communication skills. An advocate must be able to present arguments clearly and
persuasively in court.
Advocate's
Duties:
-
Duty to the Client: Advocates
must act in the best interest of their clients, providing honest and competent
legal representation.
-
Duty to the Court: Advocates
must maintain respect for the judicial system, ensuring that the court is
treated with dignity and that no false statements are made.
-
Duty to the Public: Advocates
have an ethical duty to maintain the honor and integrity of the legal
profession and uphold justice.
Preparation:
-
Effective advocacy is based on thorough case
preparation, including the study of facts, law, and evidence. Preparation helps
in crafting strong arguments and anticipating counterarguments.
Advocacy
Styles:
-
Trial Advocacy:
Representing clients in court, including conducting cross-examinations, direct
examinations, and presenting arguments.
-
Negotiation and Settlement:
In many cases, an advocate may seek to resolve disputes through negotiations
and settlement rather than litigation.
Professional
Ethics:
-
Advocates must adhere to ethical standards laid down
by the Bar Council of India. These include the Code of Ethics for advocates,
which guides their professional conduct in relation to clients, courts, and
colleagues.
UNIT – 2
SEVEN LAMPS OF ADVOCACY
The
"Seven Lamps of Advocacy" symbolize the core qualities and virtues
that every advocate must possess to excel in the profession and maintain the
dignity of law. These principles were articulated by Edward Abbott Parry and
are as follows:
1.
Honesty: An advocate must be truthful to
the court, clients, and opponents, avoiding misrepresentation of facts or law.
Case
Law: V.C. Rangadurai v. D. Gopalan (1979) - Advocates must maintain integrity
and honesty in all professional dealings.
2.
Courage: Advocacy requires moral and
physical courage to present the client’s case fearlessly and stand firm against
undue influence or intimidation.
3.
Industry: Diligence and hard work are
essential in preparing cases, researching laws, and presenting arguments
effectively.
4.
Wit: Advocates must possess sharpness
of mind to handle unexpected situations and counterarguments in court
effectively.
5.
Eloquence: Clear and persuasive
communication, both oral and written, is critical for effective advocacy.
6.
Judgment: Good judgment enables an advocate
to assess the strengths and weaknesses of a case and make sound legal
decisions.
7.
Fellowship: Advocates must maintain cordial
relationships with fellow advocates, treating them with respect and
professionalism.
ADVOCATE’S DUTIES TOWARDS PUBLIC,
CLIENTS, COURT, AND OTHER ADVOCATES
Towards
the Public:
-
Promote
justice, respect the Constitution, and ensure public welfare.
-
Act
as a responsible citizen, avoiding activities that harm the reputation of the
legal profession.
-
Support
legal awareness and legal aid to enhance access to justice.
Towards
Clients:
-
Confidentiality: Maintain client-attorney
privilege and avoid disclosing information without consent.
-
Loyalty: Act in the client’s best
interest, avoiding conflicts of interest.
-
Competence: Provide competent legal advice
and representation, staying updated with laws.
-
Honesty: Avoid misleading clients
regarding case outcomes or legal expenses.
Case Law:
P.D. Khandekar v. Bar Council of Maharashtra (1984) – Advocates must not
indulge in actions that compromise client interests.
Towards
the Court:
-
Respect: Treat the judiciary with respect
and uphold its dignity.
-
Candor: Be truthful and transparent,
avoiding the suppression of material facts.
-
Professional
Decorum:
Refrain from using harsh language or showing contempt.
Case Law:
R.D. Saxena v. Balram Prasad Sharma (2000) – Advocates must act responsibly,
ensuring their conduct doesn’t undermine the court’s authority.
Towards
Other Advocates:
-
Maintain
mutual respect and avoid personal attacks or unprofessional behavior.
-
Assist
junior advocates in learning and adhering to ethical standards.
LEGAL AID
Legal
aid is a constitutional right under Article 39A, which ensures access to
justice for all, regardless of financial or social status. Advocates have a
duty to:
-
Provide
free legal services to the needy, as mandated by Section 12 of the Legal
Services Authorities Act, 1987.
-
Act
as empaneled lawyers for Legal Services Authorities, representing indigent
individuals in courts.
Case Law:
Hussainara Khatoon v. State of Bihar (1979) – Emphasized the importance of
providing free legal aid to underprivileged individuals.
BAR COUNCIL OF INDIA’S CODE OF ETHICS
The
Bar Council of India’s Code of Ethics sets out the professional standards and
conduct for advocates under the Advocates Act, 1961. Key principles include:
Upholding
Dignity:
Advocates
must uphold the honor and dignity of the profession, ensuring fairness and
impartiality.
Duty
to the Client:
-
Avoid
fee-related exploitation and act in the client’s best interest.
-
Avoid
representing conflicting parties without informed consent.
Duty
to the Court:
Assist
the court in the administration of justice, avoiding actions that mislead the
court or delay proceedings.
Duty
to Opponents:
Treat
opposing parties and advocates with respect and professionalism.
Avoid
unnecessary litigation or procedural delays.
Prohibition
of Advertising:
Advocates
are prohibited from soliciting work or advertising their services under BCI
Rules.
UNIT - 3
DISCIPLINARY PROCEEDINGS
Disciplinary
proceedings are initiated when an advocate is alleged to have engaged in
professional misconduct. The Bar Council of India and State Bar Councils handle
these proceedings through their Disciplinary Committees, as per the provisions
of the Advocates Act, 1961.
Relevant
Sections:
-
Section 35: Deals with complaints and disciplinary proceedings
for professional misconduct.
-
Section 36: Confers appellate jurisdiction to the BCI over
decisions of the State Bar Councils.
-
Section 37: Provides for appeals to the BCI from decisions of the
Disciplinary Committees of State Bar Councils.
PROFESSIONAL MISCONDUCT
Professional
misconduct refers to actions by an advocate that violate professional ethics,
statutory provisions, or established rules of conduct. Examples include:
1.
Breach of
Confidentiality: Disclosing
client information without consent.
2.
Misrepresentation: Misleading the court or client.
3.
Overcharging
Fees: Charging exorbitant or
unfair fees.
4.
Conflict of
Interest: Representing opposing
parties in the same case.
5.
Criminal
Activities: Conviction for
offenses involving moral turpitude.
6.
Neglect of
Duty: Failing to appear in court
or prepare adequately for cases.
Case Law:
-
P.D. Khandekar v.
Bar Council of Maharashtra (1984): Advocates must maintain professional
integrity and refrain from conduct that tarnishes the profession’s reputation.
-
Noratanmal
Chouraria v. M.R. Murali (2004): Advocates must not misuse their position to
intimidate or exploit others.
DISQUALIFICATIONS
An advocate may
face disqualification from practicing law for:
-
Conviction
for a Serious Offense: Crimes
involving moral turpitude lead to automatic disqualification.
-
Financial
Insolvency: Being declared
insolvent affects an advocate's eligibility to practice.
-
Unsound
Mind: Advocates declared of
unsound mind by a competent court are disqualified.
Case Law: In Re: ‘A’ (1962) – The court disqualified an
advocate who was convicted of forgery and misappropriation.
FUNCTIONS OF BAR COUNCIL OF INDIA/STATE BAR COUNCILS
IN DEALING WITH THE DISCIPLINARY PROCEEDINGS
Regulation of
Professional Conduct:
-
BCI frames rules
governing professional conduct and etiquette under the Advocates Act, 1961.
-
State Bar
Councils handle grievances related to misconduct.
Disciplinary
Jurisdiction:
-
State Bar
Councils investigate complaints of misconduct and take disciplinary action.
-
Appeals against
State Bar Council decisions can be made to the Bar Council of India.
Oversight of
Disciplinary Committees:
Both BCI and State
Bar Councils constitute Disciplinary Committees to adjudicate misconduct cases.
Legal Education
and Training:
The BCI ensures
proper training and education for advocates, ensuring ethical awareness from
the outset.
DISCIPLINARY COMMITTEES: POWERS AND FUNCTIONS
Each State Bar
Council and the Bar Council of India has a Disciplinary Committee to address
complaints of professional misconduct.
Constitution:
Each committee
comprises three members, including one who is a senior advocate.
Powers:
1.
Summon
Witnesses: The committee can
summon witnesses and examine evidence.
2.
Enforce
Attendance: It can compel the
attendance of advocates and parties involved.
3.
Issue
Orders: It can pass orders for
suspension, removal, or warnings based on findings.
Procedure:
1.
A complaint is
submitted to the State Bar Council.
2.
After preliminary
scrutiny, the Disciplinary Committee investigates the matter.
3.
Evidence is
recorded, and parties are heard.
4.
Orders are
passed, which may be appealed to the BCI or Supreme Court.
DISQUALIFICATION AND REMOVAL FROM ROLLS.
Grounds for
Removal:
-
Conviction for a
criminal offense involving moral turpitude.
-
Proven
professional misconduct, such as fraud or gross negligence.
-
Violation of
ethical rules, such as advertising legal services (prohibited under BCI rules).
Procedure:
-
Complaints are
filed with the State Bar Council.
-
The Disciplinary
Committee conducts an inquiry and, upon finding misconduct, can recommend
removal from the rolls.
Appeals:
Appeals against
removal orders can be made to the Bar Council of India under Section 37, and
subsequently, to the Supreme Court under Section 38.
Case Law: D. P. Chadha v. Triyugi Narain Mishra (2001) –
Advocates must adhere to ethical norms, and gross violations warrant removal
from the rolls.
UNIT – 4
PROFESSIONAL ACCOUNTING
Professional
accounting refers to maintaining financial records and transactions
systematically, ensuring accuracy, accountability, and compliance with legal
standards. For lawyers, understanding basic accounting is essential for
handling client funds, managing legal fees, and maintaining ethical practices.
ACCOUNTANCY FOR LAWYERS
Lawyers
must manage:
1. Client Accounts: Maintaining separate accounts for
client funds, as mixing personal and client funds is unethical and may lead to
disciplinary action.
2. Office Accounts: Tracking income, expenses, and
liabilities for the law firm or practice.
3. Tax Compliance: Filing income tax, GST, and other
statutory dues accurately.
Relevant
Ethical Rule: Rule
25, Bar Council of India Rules, emphasizes proper maintenance of client
accounts.
NATURE AND FUNCTIONS OF ACCOUNTING
Nature:
-
Accounting
is the process of recording, classifying, summarizing, and analyzing financial
transactions.
-
It
provides a clear financial picture, aiding decision-making and regulatory
compliance.
Functions:
-
Recording
Transactions:
Ensuring every financial activity is documented systematically.
-
Providing
Financial Statements:
Generating balance sheets, income statements, and cash flow reports for legal
practices.
-
Ensuring
Transparency:
Promoting trust between lawyers and clients by maintaining detailed records of
financial dealings.
-
Aiding
in Decision-Making:
Helping legal practitioners make informed decisions regarding resource
allocation and expenditure.
IMPORTANT BRANCHES OF ACCOUNTING
1.
Financial
Accounting:
-
Focuses
on preparing financial statements to reflect the business's profitability and
financial position.
-
Lawyers
use it to manage firm accounts and comply with tax laws.
2.
Management
Accounting:
Provides data for internal decision-making, such as budgeting and cost
analysis.
3.
Cost
Accounting: Tracks
the costs of delivering legal services to ensure profitability and efficiency.
4.
Forensic
Accounting: Used
in legal disputes, fraud investigations, and expert testimony in financial
matters.
5.
Tax
Accounting:
Focuses on compliance with tax regulations, including income tax and GST
filings for legal professionals.
ACCOUNTING AND LAW
Relationship
Between Accounting and Law:
-
Accounting
aids in adhering to legal obligations, such as maintaining client trust
accounts.
-
Legal
compliance in taxation, payroll, and reporting relies heavily on accurate
accounting.
Significance
for Lawyers:
-
Helps
ensure transparency and avoid allegations of financial mismanagement.
-
Lawyers
often use accounting principles to analyze financial evidence in cases
involving fraud, bankruptcy, or corporate disputes.
Case
Example: In
corporate law practice, lawyers analyze financial statements to detect
irregularities or validate claims in shareholder disputes.
BAR BENCH RELATIONS
Bar-Bench
Relations refer to the professional interaction and mutual respect between the
judiciary (Bench) and advocates (Bar).
Importance:
-
Ensures
the smooth functioning of the judicial system.
-
Builds
trust and cooperation, upholding the dignity of the legal profession.
Duties
of Advocates:
-
Respect
judicial officers and avoid any conduct that undermines the court’s authority.
-
Present
arguments with civility and professionalism, refraining from personal attacks
or disruptive behavior.
Duties
of Judges:
Treat
advocates with courtesy and fairness, allowing them a reasonable opportunity to
present their cases.
Ethical
Mandates:
Advocates
are guided by the Bar Council of India’s Rules of Professional Conduct,
ensuring respect for the court and adherence to decorum.
Case
Law: Salil Dutta
v. T.M. and M.C. Pvt. Ltd. (1993) – Advocates must maintain decorum and respect
towards the judiciary to ensure effective justice delivery.
------------------------------ XXX-----------------------------------
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P-II: Public International Law
P-III: Interpretation of Statutes
P-V: Intellectual Property Law
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P-III: Law of Banking and Negotiable Instruments
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Note: Some of the short notes are intended for a basic understanding of the subject topics. For a more in-depth understanding, please refer to the textbooks.
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