1. Mr. K. Venkata Rao, 1st grade pleader in the District Court of Bellary has been called upon to show cause why he should not be dealt with under Section 13(b) and (f) of the Legal Practitioners Act for having advised one Hulkiyal Hanumappa who had applied to be appointed guardian of his minor daughter called Nilavva alias Thimmava, to enter into an agreement with two persons, namely, Hanumantha Reddi and Sunkunna to the effect that in return for their services in standing as sureties they should receive a certain portion of the minor's income, namely, one-half of the interest accruing on all Government bonds and Rangoon Debenture loans Rs. 16,000, the property of the minor, during her minority, knowing that such arrangement was highly detrimental to the interests of the said minor and that he further presented the security bond drawn up in accordance with the above-mentioned agreement to the District Court of Bellary and obtained there for the said Court's sanction.
2. The facts shortly are these: The minor, a Hindu widow, inherited considerable property consisting of moveables and immoveables, the moveable property mainly consisting of 3 1/2 per cent Government securities and Rangoon Debentures of the nominal value of Rs. 16,000. Hanumappa the father and natural guardian applied to be appointed by the Court. He apparently was a poor man and was unable to find the required sureties to the extent of Rs. 32,500 as demanded by the District Judge. He consulted Mr. Venkata Rao who was well known to him and he advised him to apply to the two persons, namely, Hanumantha Reddi and Sunkunna through a common friend of both. They agreed to become sureties on the guardian entering into the agreement mentioned in the charge. The result of the arrangement was that half the income derived from the property of the minor would go to the sureties for four years amounting to about Rs. 1,200.
3. The question is in the first place whether such an agreement is illegal or detrimental to the interests of the minor, and in the second place, whether Mr. Venkata Rao acted properly in the matter in not advising Hulkiyal Hanumappa not to enter into such an agreement, or whether he believed, as he himself asserts, that the arrangement, was to the advantage of the minor. He says that the father of the minor would not have been able to find proper sureties unless he agreed to the terms in question, and the only alternative open to the Court would then have been to appoint a guardian on a salary. That he says would have caused greater loss to the minor's estate than the arrangement in question. On the question whether a guardian is justified in entering into an arrangement by which the sureties are paid a certain portion of the income from the minor's property in consideration of executing a bond, we have been referred to a ruling of the Irish Court on the subject in Re Lucas : Pan v. Blair (1800) 1 Ir. Rep. 292 to the following effect: 'Where a person who is entitled as of right to a grant of administration, but is otherwise unable to give justifying security, procures a surety bond from an insurance company, and pays a premium thereon, it is within the discretion of the court to allow the amount of such premium out of the general personal estate, where the circumstances of the case show that reliable security could not otherwise be obtained and that the course adopted was reasonable and proper and for the interest of all parties entitled to the assets.' The learned Vice-Chancellor says in the course of the judgment: 'Private individuals hate suretyship as a rule; but insurance companies of undoubted solvency can generally be found to guarantee against such losses, for a sum not by any means exorbitant. In cases, where reliable security cannot otherwise be procured, I consider it to be for the interest of all parties entitled to the assets, whether as creditors or beneficiaries that the security of an insurance company, or some equally solvent surety, should be procured at the expense of the estate.' He allowed the amount which was agreed to be paid to the insurance company to be paid out of the estate. He says, ' of course, when the administrator comes to be allowed this credit, he must satisfy the court that it was a proper and reasonable thing for him to have done; and if it should appear to have been done unnecessarily or improperly, it should be disallowed.' There is no Indian ruling on this point excepting a case, Fateh Singh v. Sanwal Singh I.L.R. (1878) A. 751, But there the man who stood surety for a person charged with a crime did so on receiving from the accused the amount for which he became surety and the court held that that was illegal inasmuch as an arrangement like this would defeat the purposes for which the law requires bonds in such cases. But that is very different from the case here and the principle laid down in the Irish case seems to have a closer bearing on the facts of the present case. Besides we are informed that it is not by any means unusual for a person required to give security to obtain the services of sureties under an agreement to give therein some compensation for the risk. It may be that in certain circumstances, such as in the case in Fateh Singh v. Sanwal Singh I.L.R. (1878) A. 751 an agreement of this character could be invalid and illegal. But it does not follow that it would not be valid in any case. Whether particular agreement in this case was injurious to the interests of the minor or not, is not very clear upon the facts as we have them on the re cord. At any rate those facts would not justify us in saying that the agreement under which the guardian consented to part with a portion of the income of the minor's property in consideration of those two sureties consenting to act in the matter must have been detrimental to the interests of the minor. Further we are not in a position to hold that it is made out that Mr. K. Venkata Rao might not have honestly believed that the agreement which the guardian entered into was not a proper one. We have the fact that although the agreement was not brought to the notice of the Court, it was attested by a number of persons of respectable position in life, and there is nothing to show that any attempt was made to keep it a secret arrangement with the consciousness that it was not a proper agreement. We think it would have been better if Mr. Venkata Rao had advised his client to bring the matter to the notice of the Court but in the absence of any evidence to show that he must have thought that the agreement was detrimental to the interests of the minor, we are unable to say that in not advising the guardian to bring the matter to the notice of the Court he was guilty of professional misconduct or was guilty of conduct which would bring him within the purview of Clause (f) of Section 13 of the Legal Practitioners Act.
4. The learned Advocate-General who placed the whole matter very fairly before us, drew our attention to that portion of the agreement (Karar) Exhibit B, by which the sureties are given the power to sell and dispose of the securities and to invest the sale-proceeds in other securities and to appropriate any additional income that might have derived from such an investment and suggested that that might amount to a technical breach of trust on the part of the guardian and therefore it was also the duty of Mr. K. Venkata Rao to have advised him accordingly. But this matter is not specified in the charge and we do not therefore propose to deal with it.
5. In the above view of the facts it is unnecessary for us to consider the scope of Clause (f) of Section 13 of the Legal Practitioner's Act, or the rulings in cases cited before us on the subject.