IN THE HIGH COURT OF BOMBAY
Gajendragadkar P.B. and Vyas D.V. , JJ.
Appellants: In Re: K.L. Gauba
Vs.
Respondent:
Civil Appln. No. 88 of 1954
Decided On: 23.04.1954
Counsels:
H.M. Choksi, Govt. Pleader, For the State of Bombay, Party in person and A.A. Adarkar, Adv. for the Bar Council
An agreement between a lawyer and his client which creates in the lawyer a financial interest in the subject-matter of the cause, that too on a successful determination of the suit, has always been condemned as unworthy of the legal profession.
Fact of the Case:
The respondent, an advocate, had entered into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous. The Tribunal appointed under S. 11 of the Bar Councils Act found that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct.
Finding of the Court:
The Court held that the agreement between the respondent and his client was opposed to public policy and amounted to professional misconduct. The Court observed that such agreements are bound to affect the detachment of the lawyer and to impair his status as an officer of the Court, to a very large extent.
Issues: Whether the agreement between the respondent and his client was champertous and amounted to professional misconduct.
Ratio Decidendi: The Court held that the agreement between the respondent and his client was opposed to public policy and amounted to professional misconduct. The Court observed that such agreements are bound to affect the detachment of the lawyer and to impair his status as an officer of the Court, to a very large extent.
Final Decision: The Court held that the respondent was guilty of professional misconduct and directed that appropriate action be taken against him.
1. This is an application under our disciplinary jurisdiction against Mr. K.L. Gauba. It came to the notice of this Court that Mr. Gauba, who is an advocate of this Court, had entered Into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous and this Court took the view that the circumstances under which the said agreement had been entered into and the terms of the agreement itself called for an investigation under the disciplinary jurisdiction, and so it was decided to refer this case to the Bar Council.
Accordingly, on May 1, 1953, the learned Chief Justice appointed three members of the Bar Council to constitute a Tribunal under S. 11 of the Bar Councils Act for inquiring into this case. Notice of the intended inquiry was served on Mr. Gauba in due course. He appeared before the Bar Council Tribunal, gave his explanation on July 10 and filed an additional statement on August 6, 1953. The matter was then heard by the Members of the Tribunal and they made the report on December 16, 1953. The Tribunal has held that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct. After this report was received, notice of the hearing of the present application was served on Mr. Gauba and the matter has thus come before us for final disposal.
2. The agreement which has given rise to these proceedings was entered into between the respondent and his client Amarnath on December 20, 1952. This is what the client wrote to the respondent:
"Dear, Mr. Gauba,
I hereby engage you with regard to my claim against the Baroda Theatres Ltd. for a sum of Rs. 9,400 (the balance due to me),
Out of 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.
(Sd.) Amar Nath
20-12-1952."
3. It may be convenient to mention a few facts relevant to this agreement. It appears that on July 23, 1951, Mr. Amarnath, the client, had entered into an agreement with the Baroda Theatres, Ltd., to work in their production for a remuneration of Rs. 15,000. Out of this amount of agreed remuneration the client had received only Rs. 3,000 and the balance of Rs. 12,000 still remained to be paid. The client demanded this balance from the Baroda Theatres, Ltd. The claim of the client to the extent of Rs. 9,400 was admitted and in fact a cheque for Rs. 2,000 towards part-payment was issued by the Baroda Theatres, Ltd., on October 15, 1952, but it was dishonoured on December 15, 1952. A notice was then served on the company by the clients attorneys, Messrs. Nandlal and Co., on December 17, 1952.
It was at this stage that the client approached the respondent on December 20, 1952. He was accompanied by Mr. Kavish, who happened to be acquainted with the respondent. The client explained his case to the respondent and pleaded that he was keen on taking immediate action against the company because he was apprehensive that the company might recover amounts due to them from their distributors and may eventually refuse to pay his balance to him. He was, therefore, anxious to take immediate action in order to safeguard his rights and he inquired what the respondents fees would be for a suit in the City Civil Court for Rs. 9,400. The respondent told him that the out of pocket expenses for the suit and for a motion for attachment before judgment would be about Rs. 750 to Rs. 800, and that he would charge all-told Rs. 1,250 as his professional remuneration.
The client pleaded his inability to pay the respondent his fees at that time, but urged that he was very keen on engaging the respondents services. He gave the respondent a graphic account of his financial difficulties and urged that it was utterly impossible for him to pay the fees or the expenses of the civil suit as mentioned by the r
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.