Advocates Act, 1961 - Chapter II: Bar Councils
Section 12 of the Advocates Act, 1961: Accounts and Audit
Section 12 of the Advocates Act, 1961 establishes the accounting, audit, reporting and publication duties of State Bar Councils and the Bar Council of India.
In brief: Every Bar Council must maintain prescribed books of account, have its accounts audited by a qualified auditor, and complete the required annual reporting and Gazette publication within the statutory time limit.
Text of Section 12
Section 12 - Accounts and audit
(1) Every Bar Council shall cause to be maintained such books of accounts and other books in such form and in such manner as may be prescribed.
(2) The accounts of a Bar Council shall be audited by auditors duly qualified to act as auditors of companies under the Companies Act, 1956 (1 of 1956), at such times and in such manner as may be prescribed.
(3) As soon as may be practicable at the end of each financial year, but not later than the 31st day of December of the year next following, a State Bar Council shall send a copy of its accounts together with a copy of the report of the auditors thereon to the Bar Council of India and shall cause the same to be published in the Official Gazette.
(4) As soon as may be practicable at the end of each financial year, but not later than the 31st day of December of the year next following, the Bar Council of India shall send a copy of its accounts together with a copy of the report of the auditors thereon to the Central Government and shall cause the same to be published in the Gazette of India.
Meaning and explanation of Section 12
1. Maintenance of books of account
Section 12(1) requires every Bar Council to maintain books of account and other prescribed records. The form and manner of maintenance are governed by applicable rules made under the Advocates Act.
2. Mandatory audit
Section 12(2) requires the accounts of every Bar Council to be audited by a person qualified to act as an auditor of companies. The time and manner of audit are also subject to applicable rules.
Current statutory context: The enacted text of Section 12(2) still refers to the Companies Act, 1956. That Act has since been replaced by the Companies Act, 2013. Section 8 of the General Clauses Act, 1897 provides that, unless a different intention appears, a statutory reference to a repealed and re-enacted provision is construed as a reference to the re-enacted provision. Auditor eligibility and qualifications under the Companies Act, 2013 are now principally governed by Section 141.
3. Reporting duty of State Bar Councils
Under Section 12(3), each State Bar Council must, after the close of every financial year and no later than 31 December of the following year, send its accounts and the auditor's report to the Bar Council of India. The accounts and audit report must also be published in the Official Gazette.
4. Reporting duty of the Bar Council of India
Section 12(4) imposes a corresponding obligation on the Bar Council of India. It must send its accounts and auditor's report to the Central Government within the same outer time limit and cause them to be published in the Gazette of India.
Section 12 compliance at a glance
| Requirement | State Bar Council | Bar Council of India |
|---|---|---|
| Maintain prescribed books | Yes | Yes |
| Annual audit | Yes | Yes |
| Recipient of accounts and audit report | Bar Council of India | Central Government |
| Latest statutory date | 31 December of the following year | 31 December of the following year |
| Publication | Official Gazette | Gazette of India |
Related provisions
- Section 5 gives every Bar Council corporate status.
- Section 6 sets out functions of State Bar Councils.
- Section 7 sets out functions of the Bar Council of India.
- Section 11 deals with Bar Council staff, including appointment of an accountant where considered necessary.
- Section 15 provides rule-making powers relevant to the form and manner of accounts and audit procedure.
Official legal sources
- India Code - Advocates Act, 1961
- India Code - General Clauses Act, 1897
- India Code - Companies Act, 2013
Legal note: Section 12 states the statutory accounting and reporting framework. Detailed accounting formats, audit procedure and other compliance requirements may also be governed by applicable Bar Council rules and validly issued directions.