SUPREME COURT OF INDIA
27th May, 1954
B.K. MUKHERJEA, S.R. DAS, BOSE, GHULAM HASAN AND JAGANNADHA DAS, JJ.
In the matter of Mr. G a Senior Advocate of the SC.
Advocates appeared
Mr. G in person; Mr. M.C. Setalvad, Attorney-General for India (Messrs. G.N. Joshi and P.G. Gokhale, Advocate, with him), for the Hon ble 558 Chief Justice and other Hon ble Judges of the Bombay High Court.
Legal Practitioners (Fees) Act, 1926, S. 3-Agreement by Advocate to share the result of litigation-Professional misconduct. - Contract Act (1872) S. 23.-Agreement by Advocate to share the result of litigation-Professional misconduct-Supreme Court Rules (1950), O. 4, R. 30-Bar Councils Act, 1926, S. 12 (3)-Legal Practitioners (Fees) Act (1926). S. 3.
1. Reversing A.I.R. 1952 Pat. 393. - Indian Bar Councils Act (1926), 8. 12 (3)-Supre:me Court Rules (1950) 0•4, R. 30-Agree:ment by Advocate to share the result of litigation- Professional :misconduct-Legal Practitioners (Fees) Act (1926),8.3- Contract Act (1872), 8.23.
G an Advocate of the Supreme Court, entered into an agreement with his client which was embodied in his clients letter as ynder : "I hereby engage you with regard to my claim against the Baroda Theatres Ltd. for a sum of Rs. 9,4001- (balance due to me). Out of the recoveries you may take 50 per cent. of the amount recovered. I will by Wednesday deposit Rs. 2001- in your account or give personally towards expenses."
Held: (1) A contract of this kind would be legally unobjectionable if no lawyer was involved. The rigid English rules of champerty and maintenance do not apply in India, so if this agreement had been between what may be termed third parties, it would have been legally enforceable and good. But the conduct of G, who was an Advocate, amounts to professional misconduct calling for disciplinary action.
(2) An Advocate of the Supreme Court is bound to conduct himself in a manner befitting the high and honourable profession to whose privileges he has so long been admitted; and if he departs from the high standards which that profession has set for itself and demands of him in professional matters, he is liable to disciplinary action.
(3) It is highly reprehensible for an Advocate to stipulate for, or receive, a remuneration proportioned to the results of litigation or a claim whether in the form of a share in the subject matter, a percentage or otherwise. He will, by so acting offend the rules of his profession and so render himself liable to the disciplinary jurisdiction of the Court. The rule applies to all Advocates, whether Barristers or otherwise.
(4) Section 3 of the Legal Practitioners (Fees) Act, 1926 does not make any change in the above rule as that Act is not concerned with professional misconduct, which is dealt with by the Indian Bar Councils Act. The latter Act makes no modification in the disciplinary jurisdiction of the High Court or of the sense in which professional misconduct had been understood throughout India lip to that time . - Supreme Court Rules (1950) O.4, R. 30-Agreement by Advocate to share the result of litigation-Professional mix conduct-Legal Practitioners (Fees) Act (1926) S. 3-Contract Act (1872) S. 23-Indian Bar Councils Act (1926) S. 12(3).
>Judgment
BOSE, J.: This matter arises out of a summons issued to Mr. G, a Senior Advocate of this Court, under Order IV, Rule 30, of the SC Rules, to show cause why disciplinary action should not be taken against him.
2. Mr. G was called to the Bar in England and was later enrolled as an Advocate of the Bombay High Court. He is also an Advocate of this Court. On 20-12-1952 he entered into an agreement with a client whereby the client undertook to pay him 50 per cent, of any recoveries he might make in the legal proceedings in respect of which he was engaged. On this being reported to the High Court the matter was referred to the Bombay Bar Council and was investigated by three of its members under section 11 (1) of the Bar Council Act. They recorded their opinion that this amounted to professional misconduct.
The High Court agreed and suspended Mr. G from practice as an Advocate of the Bombay High Court for six months. The learned Judges considered that they had no power to affect his position as an Advocate of this Court, so directed that a copy of their judgment be submitted to this Court to enable this Court to take such action on it as it thought fit. Acting on this report this Court issued notice to the petitioner under Order IV, Rule 30 to show cause why disciplinary action should not be taken against him. About the same time Mr. G filled a petition for a writ under Art. 32 of the Constitution. We are confining ourselves in this order to the matter raised in the summons.
3. There is no dispute about the facts. They are set out in Mr. G s petition under Article 32 and are as follows :
On the 23 rd of July 1951 Mr. G s client is said to have entered into an agreement with the Baroda Theatres Ltd., for work on a picture which they intended to produce. The remuneration agreed on was Rs. 15,000. Of this Rs. 3,000 was paid at once and the balance, Rs. 12,000 was to be paid on the completion of the picture. It is said that at the date of the dispute the Baroda Theatres admitted that Rs. 9,4000 was due, but as they did not pay up, the client consulted Mr. G about the best way to recover his money and wanted to know what the expenses and fees would be. After examining the matter in detail and talking it over with his client, Mr. G advised him that two courses were open to him.
4. First, there was a civil suit. He said the cost of this would be about Rs. 500 for court-fees and expenses and about Rs. 1,250 for fees. The other alternative was winding up proceedings. The client was told that in these the court-fees would be lower but Mr. G s fees would have to be higher as winding up proceedings as usually protracted.
5. The client preferred the latter course but said that he could not pay more than Rs. 200 towards expenses and as regards the fees he said he was too poor to pay and so made a proposal which he reduced to writing. It is embodied in the following letter dated 20-12-1952 addressed to Mr. G :
"I hereby engage you with regard to my claim against the Baroda Theatres Ltd., for sum of Rs. 9,400 (balance due to me).
Out of the recoveries you may take 50 per cent, of the amount recovered. I will by Wednesday deposit Rs. 200 in your account or give personally towards expenses."
6. Mr. G said that he was unwilling to work on these terms but when he was pressed to do so and when he realised that unless he agreed the client would probably lose a just claim he reluctantly agreed.
7. Rs. 200 was thereupon paid towards expenses and Mr. G at once entered into correspondence with the solicitors of the Baroda Theatres Ltd. A winding up petitioner was drawn up and declared but was not filed because the matter was compromised at that stage. The Baroda Theatres undertook to pay Mr. G s client Rs. 6,400 in full satisfaction of his claim.
8. The client then paid Mr. G a further Rs. 800 (He had already paid Rs. 200, part of which was spent for expenses). Mr. G s claimed the balance which was roughly Rs. 2,200.
9. We are not concerned with the proceedings i
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