Why Did the Supreme Court Set Aside the BCI's Dismissal of Professional Misconduct Allegations Against Dhir & Dhir Associates?

In a significant ruling, the Supreme Court of India has set aside the Bar Council of India's (BCI) decision to dismiss a revision petition filed by Sailesh Bhansali, who had accused Advocates Alok Dhir and Maneesha Dhir, partners of the prestigious law firm Dhir & Dhir Associates, of professional misconduct. The bench, comprising Justice Dipankar Datta and Justice Manmohan, pointed out a crucial flaw in the BCI’s order—the failure to provide any reasons for affirming the decision of the Bar Council of Delhi, which had originally dismissed Bhansali’s complaint.

The Supreme Court underlined the principle that any order, particularly one affirming a previous decision, must be accompanied by an explanation, however brief, outlining the rationale behind it. The Court observed that it is not sufficient to simply issue a conclusion without a detailed explanation for the decision. Justice Datta, in his remarks, emphasized that the "what" (the decision) cannot stand without the "why" (the reasons), and in this case, the absence of any reasoning rendered the BCI’s revisional order legally untenable. As a result, the Court directed the Bar Council to reconsider Bhansali’s revision petition and pass a fresh order after hearing all parties involved, ensuring that due process and transparency are followed. The Court gave the BCI six months to comply with its directive.

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The complaint against Dhir & Dhir Associates arose from Bhansali’s allegations of a conflict of interest concerning the law firm’s concurrent operations with an Asset Reconstruction Company (Dhir & Dhir ARC), which, according to Bhansali, resulted in a breach of confidentiality and a questionable financial arrangement. Bhansali, a client of Dhir & Dhir Associates, had engaged the firm to handle a matter involving his company, Madras Petrochem, in the Debt Recovery Tribunal (DRT). However, Bhansali alleged that the law firm had a dual interest in the outcome of the matter, as the Dhir & Dhir ARC, which is affiliated with the law firm, used confidential information to acquire loans from Madras Petrochem, eventually becoming its largest creditor.

Bhansali claimed that he had not been fully informed about the nature of the relationship between Dhir & Dhir Associates and the Asset Reconstruction Company. He alleged that he was misled into signing a "no-objection" letter, which he argued cleared the law firm of any allegations of conflict of interest and unethical conduct. Bhansali further contended that had he been made aware of the connection between the law firm and the ARC, he would not have engaged the firm for representation in the DRT matter.

The Bar Council of Delhi, however, dismissed Bhansali’s complaint on the grounds that the issuance of the "no-objection" letter by the litigant effectively absolved the law firm of any wrongdoing. The Delhi Bar Council’s dismissal was appealed by Bhansali, leading to the revision petition before the Bar Council of India.

In its ruling, the Supreme Court questioned the BCI’s failure to provide reasons for affirming the dismissal. While the BCI had the discretion to dismiss the revision petition, the Court emphasized the importance of transparency in its decision-making process. It reiterated that even when an order merely affirms a prior ruling, the reasons behind such affirmation must be explicitly recorded, ensuring accountability and clarity.

The Court's ruling serves as a reminder to regulatory bodies, such as the BCI, of their obligation to adhere to the principles of fairness, transparency, and accountability in disciplinary matters. The judgment also underscores the importance of clear communication of reasons behind decisions, especially in legal and disciplinary proceedings, where the consequences can have a profound impact on individuals and institutions alike.

Bhansali’s legal team was led by Senior Advocate Gopal Sankaranarayan, with Advocate Aditya N. Mehta, assisted by A. Karthik, AOR. The respondents, Dhir & Dhir Associates, were represented by Senior Advocate Gourab Banerji, assisted by Ashu Kansal, Dipanshu Krishnan, and Karan Batura, AOR.

Case Reference: Sailesh Bhansali vs. Alok Dhir and Others | CIVIL APPEAL Diary No. 36274/2024