1. Suo moto Public Interest Litigation concerning non-payment of professional fees to empanelled advocates by insurance companies and its impact on the administration of justice. (Para 2 , 3 , 8 )
Back
Next 
2018 Supreme(SC) 685
SUPREME COURT OF INDIA
A.K. SIKRI, ASHOK BHUSHAN, JJ.
UNITED INDIA INSURANCE CO. LTD. – APPELLANT
VERSUS
. - RESPONDENTS
CIVIL APPEAL NO. OF 2018, (Arising out of SLP (C) No. 15500 of 2017)
CIVIL APPEAL NO. OF 2018 (Arising out of SLP (C) No. 15971 of 2017)
CIVIL APPEAL NO. OF 2018 (Arising out of SLP (C) No. 15755 of 2017)
CIVIL APPEAL NO. OF 2018 (Arising out of SLP (C) Diary No. 28109 of 2017)
Decided on : 02-07-2018
Important Points
IMPORTANT POINT
Writ petition cannot be suo motu converted into PIL to adjudicate old disputes which cannot be held to be affecting the case of the “poor litigants”.
Writ petition cannot be suo motu converted into PIL to adjudicate old disputes which cannot be held to be affecting the case of the “poor litigants”.
Subject
Public Interest Litigation - SUO MOTO
Act Referred
Headnote
Constitution of India – Article 226 – Suo motu PIL – Issue of payment of fee raised in 2014 when GIPSA circular dated 18.03.2014 was in force and being adhered – Dispute regarding GIPSA circular dated 21.02.2005 – Circular modified by inter-companies meeting decision dated 16.03.2005 – Rates further modified vide circulars dated 09.01.2009 and 18.03.2014 – No dispute regarding circulars or payment of fees according to circulars of 2009 or 2014 – adjudicating issue of 2005 circular cannot be held to be affecting the case of the “poor litigants”, reason given by High Court to suo motu convert writ petition into PIL – Converting writ petition into PIL and adjudicating fee structure relating to circular dated 21.02.2005 and decision 16.03.2005 – Held wholly uncalled for. (Para 13, 14)
Facts of the case:
The appellants, four insurance companies are aggrieved by the judgment dated 09.12.2016 of the Punjab & Haryana High Court passed in a Public Interest Litigation Petition CWP No. 6626 of 2015, issuing certain directions regarding payment of fee to its empanelled advocates.
A FAO – Rajesh Vs. Parmod was filed by an injured of a motor accident, claiming compensation. While hearing the FAO, the learned Single Judge noticed that in spite of issue of notice of motion, none had appeared on behalf of the insurance company, i.e. United India Insurance Co. Ltd. Learned Single Judge in the aforesaid FAO passed an order for treating the issue as of vital public importance and registering a separate writ petition in that regard.
The Division Bench issued notice on 28.04.2015 to all four insurance companies, i.e., United India Insurance Company Ltd., Oriental Insurance Co. Ltd., New India Assurance Co. Ltd. and National Insurance Co. Ltd. Before the Division Bench, all the four insurance companies (who are appellants before us) have filed a joint reply dated 01.09.2015 and further a joint reply for placing on record the fees schedule dated 05.05.2016. Before the Division Bench, Shri Akshay Bhan, learned senior counsel appearing for the advocates, whose fee are due and payable by the four insurance companies submitted that the New India Assurance Co. Ltd. has committed to pay all the fee in terms of its affidavit and they are in the process of doing so. It was further submitted by the learned senior counsel appearing on behalf of the advocates before the High Court that the advocates representing the Insurance Companies were never apprised of the Schedule relating to payment of fee to the advocates. Division Bench of the High Court after hearing the learned senior counsel appearing for the advocates as well as learned counsel appearing for the insurance companies disposed of the writ petition directing the Insurance Companies to adhere to the three schedules framed by GIPSA i.e. 01.11.2004, 01.01.2009 and 01.04.2014 and pay the full fee wherever payable. In case the same is not paid, the amount payable shall entail payment of simple interest at 7 per cent per annum from 01.07.2017 onwards from 08.04.2015, when the Court issued notices to the Insurance Companies.
Finding of the Court:
The direction of High Court directing insurance companies to adhere to fees schedule issued by GIPSA dated 21.02.2005 w.e.f. 01.11.2004 is set aside.
Any payment of fee made as per said Circular dated 21.02.2005 shall be treated as final and not to be re-opened.
Result: Appeals partly allowed.
Legal Category Hierarchy
Table of Contents
2. Whether professional fee disputes are purely contractual or subject to writ jurisdiction, and whether recommendations of a non-statutory body are legally binding. (Para 5 , 6 )
3. While non-appearance of counsel involves a public element, disputes over historical fee schedules are contractual and do not justify relief under Public Interest Litigation. (Para 10 , 13 )
4. Contractual disputes regarding professional fees, which do not affect the administration of justice or public interest, cannot be adjudicated through suo moto Public Interest Litigation. (Para 13 , 14 )
5. Directions regarding the 2004 fee schedule and interest are set aside; adherence to 2009 and 2014 fee schedules is upheld. (Para 16 )
6. Can a fee dispute between a client and an advocate be adjudicated via a Public Interest Litigation (PIL)?
Generally, payment of professional fees is a contractual matter. While non-appearance of counsel may involve a public element affecting the administration of justice, specific disputes over fee schedules do not typically justify the exercise of PIL jurisdiction. (Para 10 , 13 , 14 )
7. Does the non-appearance of empanelled advocates in court justify the registration of a suo moto PIL?
Yes, when the non-appearance of counsel is perceived to circumvent the administration of justice and affect the rights of litigants, it introduces a public law element that may justify the High Court's extraordinary jurisdiction under Article 226. (Para 10 )
8. Are the recommendations of a non-statutory body automatically binding on its member companies?
The court left the question of whether recommendations of a non-statutory body are enforceable in a court of law open for consideration in an appropriate case, focusing instead on the nature of the PIL jurisdiction. (Para 15 )
JUDGMENT :
ASHOK BHUSHAN, J.
Leave granted.
2. The appellants, four insurance companies are aggrieved by the judgment dated 09.12.2016 of the Punjab & Haryana High Court passed in a Public Interest Litigation being Writ Petition CWP No. 6626 of 2015, issuing certain directions regarding payment of fee to its empanelled advocates.
3. Brief facts of the case resulting into the judgment of the Division Bench are:-
A FAO No. 2604 of 2013 – Rajesh Vs. Parmod & Anr. was filed by an injured of a motor accident, claiming compensation. While hearing the FAO, the learned Single Judge noticed that in spite of issue of notice of motion, none had appeared on behalf of the insurance company, i.e. United India Insurance Co. Ltd. Learned Single Judge in the aforesaid FAO passed an order for treating the issue as of vital public importance and registering a separate writ petition in that regard. It is useful to extract the order dated 12.09.2014 passed by the learned Single Judge:-
“……………………………….26 Standing Counsel representing four Insurance Companies (1. United India Insurance Co. Ltd.; 2. Oriental Insurance Co. Ltd.; 3. New India Assurance Co. Ltd. and 4. National Insurance Co. Ltd.) appeared before the Court and brought their plight to the notice of the Court of how the officers and officials of these Companies were circumventing the administration of justice for their personal ends and gains. It has been highlighted during the course of hearing that these General Insurance Companies are for obvious reasons manipulating the guidelines/fee structures approved by GIPSA and under that undue exercise the Counsel were being not properly assisted and thus, intentionally causing delay in the disposal of these matters before the Court and invariably were causing loss to the exchequer of these Companies which mostly are public undertakings. It has been highlighted with much emphasis how the fees and bills of the advocates, who had been representing the Companies in the matters, were not being paid since decades. This unholy nexus and trend assumes greater importance as people in general, who repose faith in promises of financial security made by these Companies in times of their sufferings and injury, were left high and dry. Thus, what was invented as a social welfare has become a tool of exploitation in the hands of these officers of the Companies who are out and out also trying to harm the advocates who are the officers of the Court. It has often been seen that the Counsel who do not tow the line are changed in between the hearings. Thus, the sufferings are increased manifold by the inordinate intentional delay of these Companies and lack of assistance to their Counsel. Since these issues of vital public importance are being faced by almost all the Advocates present before the Court for these Insurance Companies, is an impediment and delaying process in the dispensation of justice.
Thus, this Court is pleased to treat this issue as a writ petition and refer it to the Hon'ble Acting Chief Justice for constituting an appropriate Bench to look into the matter so that much relief could come about to the poor litigants."
The above reference made by learned Single Judge in the matter was placed before a Division Bench treating it to be a Public Interest Litigation being CWP No. 6626 of 2015. The Division Bench issued notice on 28.04.2015 to all four insurance companies, i.e., United India Insurance Company Ltd., Oriental Insurance Co. Ltd., New India Assurance Co. Ltd. and National Insurance Co. Ltd. Before the Division Bench, all the four insurance companies (who are appellants before us) have filed a joint reply dated 01.09.2015 and further a joint reply for placing on record the fees schedule dated 05.05.2016. Before the Division Bench, Shri Akshay Bhan, learned senior counsel appearing for the advocates, whose fee are due and payable by the four insurance companies submitted that the New India Assurance Co. Ltd. has committed to pay all the fee in terms of
