Plea Challenging the State Sanctioned Fund Being Used as Loans Against Fixed Interests

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Advocate Syed Ziauddin challenged the circular issued by the Bar Council of Andhra Pradesh as illegal and arbitrary.

Brief facts

On 8 July 2020, the Andhra Pradesh government had released Rs. 25,00,00,000 towards the Trust for welfare of lawyers. This was to be utilized for the welfare of the lawyers. The Bar Council of Andhra Pradesh issued a circular stating that the advocates in need of monetary assistance will be provided loans. The circular stated utilization of the state sanctioned fund in form of loans for assistance of advocates amid the pandemic and continuous lockdown. The petitioner has challenged the issue of this circular as arbitrary and against the principle of natural justice. 

Submissions of the petitioner

  • On 11 August, the petitioner submitted that the circular was arbitrary and against the principles of natural justice. 
  • the Bar Council was providing the load at a chargeable interest rate and hence it was completely in derogation of the stipulation.
  •  He submits that as can be seen from the GO issued by the 2nd respondent, there is no scope and jurisdiction for the 1st respondent to issue the circular towards loan and imposing interest and also repayment. 
  • He also contended that wording of the GO is clear that a Committee is to be formed by the Advocate General. And therefore the committee Constituted under the Advocate General shall do such exercise of distribution of amounts to the Advocates. The amounts released is towards Assistance of Advocates and not towards trading the money as if it’s a commercial Bank. 
  • Further, the section 6(2) of the Advocates Act, 1961 states that the advocates should be provided assistance. Whereas the impugned circular provides loan at chargeable interest i.e. Rs. 10,000 @ 5% and Rs. 20,000 at 9%. Therefore, this repayment of loan along with interest is contrary to the said section because in case of Assistance, there cannot be any repayment.

Petitioners prayer

The petitioner therefore seeks to declare circular providing Loans to the needy advocates, out of the amount released by the Government of Andhra Pradesh, with repayment and interest clause, as illegal, irregular, arbitrary, without jurisdiction, violative of principles of natural justice and Articles 14 and 21 of Constitution of India. And to consequently suspend the impugned circular. The petitioner has also prayed to issue directions to constitute a Welfare Trust for the purpose of Andhra Pradesh Advocates Welfare.


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