Professional Ethics & Professional Accounting System

Brief “Professional Ethics & Professional Accounting System

Professional Ethics

Unit I: Background to Legal Profession

  • Historical Development:
    Trace the evolution of the legal profession in India from colonial times to post-independence reforms.
  • Professional Ethics:
    Definition and necessity of ethical norms in the legal profession to ensure justice, integrity, and public confidence.
  • Standards of Conduct:
    Standards of professional behavior and courtroom etiquette as per the Bar Council of India Rules.
  • Key Case – Re Vinay Chandra Mishra:
    A landmark judgment that shaped disciplinary actions and set a precedent for maintaining ethics in the profession.
  • Trust in the Profession:
    How adherence to ethical values maintains the dignity of the legal system and earns public trust.
  • Professional Misconduct – SCBA v. Union of India:
    Discusses the boundaries and repercussions of misconduct, reinforcing the need for discipline.
  • Importance of Ethics:
    Ethical behavior safeguards the legal system’s credibility and client interest.
  • Challenges:
    External pressures, corruption, commercialization, and conflicting interests that make ethical adherence difficult.

Unit II: Status and Duties of Advocates

  • Qualities of a Good Advocate:
    Integrity, legal acumen, communication skills, and empathy as traits contributing to success.
  • Eligibility Criteria:
    Qualifications and disqualifications for enrolment as per the Advocates Act, 1961.
  • Rights and Duties:
    Right to practice, duties to the court, client, and society under Sections of the Advocates Act.
  • Bench-Bar Relations – Smt. Harbans Kaur v. P.C. Chaturvedi:
    Emphasizes mutual respect and cooperation for smooth judicial functioning.
  • Role in Rule of Law – Charan Lal Sahu v. Union of India:
    Advocates act as defenders of constitutional values and fundamental rights.
  • Client Responsibility:
    Confidentiality, competence, honesty, and avoidance of conflict of interest.
  • Duties to Court and Opponent:
    Decorum, fairness, and non-interference with justice delivery.
  • Unethical Practices:
    Consequences like declining trust, loss of respect, and legal penalties.

Unit III: Bar Councils

  • Establishment and Functions:
    Formation and mandate of Bar Council of India (BCI) and State Bar Councils under the Advocates Act.
  • Regulatory Powers of BCI:
    Rule-making, professional conduct, legal education regulation, and disciplinary control.
  • Functions of State Bar Councils:
    Enrolment of advocates, managing professional conduct, and organizing welfare schemes.
  • Key Case – Harish Chandra Tiwari v. Baiju:
    Discusses the jurisdiction and duties of Bar Councils.
  • Disciplinary Role – Bhupendra Kumar Sharma v. Bar Council, Pathankot:
    Clarifies disciplinary proceedings and authority of Bar Councils.
  • Promotion of Legal Education:
    Oversight of law schools, curriculum, and standards in legal academia.
  • Relationship Between BCI & State Councils:
    Coordination and delegation of responsibilities for regulation and governance.
  • Critical Analysis:
    Examine issues like politicization, inefficiency, and delay in disciplinary actions.

Unit IV: Professional Misconduct and Contempt

  • Definition and Consequences:
    Misconduct under Section 35 of the Advocates Act and the consequences such as suspension or disbarment.
  • Types of Contempt:
    Civil and criminal contempt, especially when committed by legal professionals.
  • Powers of Bar Councils:
    Authority to investigate and penalize misconduct through disciplinary committees.
  • High Court’s Power – D.C. Saxena v. Chief Justice of India:
    Clarifies the contempt jurisdiction and limits of acceptable criticism.
  • Contempt and M.B. Sanghi v. Punjab & Haryana HC:
    Reiterates that personal attacks on judges by lawyers amount to contempt.
  • Contempt Procedure:
    Initiation, investigation, and trial of contempt proceedings against advocates.
  • Freedom of Speech vs. Contempt:
    Balance between free expression and the integrity of the judicial process.
  • Evaluation of Disciplinary Committees:
    Effectiveness, transparency, and need for reforms in handling complaints and misconduct.

History of Professional Ethics and Professional Accounting System (with reference to the legal profession in India)

I. Professional Ethics: Historical Overview

1. Ancient and Medieval Roots

  • Dharma-based Systems:
    In ancient India, legal responsibility was rooted in Dharma (moral duty), where Brahmins and Kshatriyas acted as judges or arbitrators guided by scriptures like the Manusmriti, Arthashastra, and Dharmashastras.
  • No Separate Legal Profession:
    Law was not a separate profession; individuals appeared on behalf of others out of moral obligation.

2. British Colonial Period (18th – 20th Century)

  • Creation of Legal Profession:
    With the establishment of Supreme Courts in Calcutta, Bombay, and Madras (1774 onwards), British laws formalized the legal profession in India.
  • Legal Practitioners Act, 1846:
    Allowed Indians to enroll as legal practitioners but provided no clear ethical framework.
  • Indian Bar Councils Act, 1926:
    Introduced statutory bodies to regulate advocates. However, regulation of professional ethics remained fragmented and inconsistent.

3. Post-Independence Reforms

  • Advocates Act, 1961:
    A landmark legislation that unified the legal profession and established the Bar Council of India (BCI) and State Bar Councils.
  • Introduced Rules on Standards of Professional Conduct and Etiquette (under Section 49(1)(c) of the Advocates Act).
  • Ethical Codification:
    BCI created a comprehensive code of conduct for advocates, covering:
  • Duties towards court, client, and public.
  • Prohibition on advertising, fee sharing, and misconduct.

4. Landmark Cases

  • Re: Vinay Chandra Mishra (1995):
    Upheld the need for strict enforcement of professional ethics. The Supreme Court suspended an advocate for contempt.
  • Supreme Court Bar Association v. Union of India (1998):
    Reinforced that only Bar Councils can discipline lawyers, and not the judiciary.

II. Professional Accounting System: Historical Development

1. Early Systems

  • Traditional Record-Keeping:
    Indian merchants and service providers, including early lawyers, used simple ledgers and bahi-khatas to track income and expenditure.
  • Lack of Regulation:
    Before independence, there was minimal regulation of financial records in legal practice.

2. Emergence of Formal Systems

  • Post-1961 Framework:
    After the Advocates Act, lawyers were expected to maintain trust accounts, client accounts, and professional accounts separately.
  • Bar Council Rules:
    Advocates must keep:
  • Separate accounts for client funds.
  • Records of fees, case expenses, and retainers.

3. Integration with Tax and Audit Laws

  • Income Tax Act (1961):
    Legal professionals required to maintain books of accounts if income exceeds prescribed limits.
  • GST and Modern Compliance (Post-2017):
    Advocates providing services above a threshold limit must comply with GST registration and invoicing.

4. Contemporary Relevance

  • Digital Accounting Tools:
    Increasing use of tools like Tally, Zoho Books, and legal-specific software for accounting and time tracking.
  • Ethics and Accounting Overlap:
    Misappropriation of client funds or financial malpractice is not only a financial wrong but also professional misconduct under Bar Council rules.

Conclusion

The history of professional ethics in India reflects a journey from moral-based duties in ancient India to codified conduct under modern legal frameworks. The professional accounting system evolved from informal methods to a structured system aligned with ethical and legal obligations.

Both are vital pillars that ensure:

  • Integrity of the legal profession
  • Transparency in client relationships
  • Public confidence in justice delivery

Scroll to Top