IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
DEEPA BHURE AND OTHERS - Appellant
Vs.
JAI KISHAN & ANR - Respondent
Civil Suit (Os) No. 3324 of 2014
Decided On : 15-02-2019
Professional Misconduct - Legal Fees - Negotiable Instruments Act - [Professional Misconduct] - [Legal Fees] - [Negotiable Instruments Act, 1881, Section 138] - The court addressed the issue of professional misconduct by a lawyer in encashing blank signed cheques given as security for legal fees without the client's permission. The lawyer filed complaints under Section 138 of the Negotiable Instruments Act against the client for stop payment instructions on the cheques. The court emphasized the need for guidelines on charging professional fees and the creation of a resolution mechanism for complaints from litigants.
Fact of the Case:
The Plaintiff filed a suit for partition and engaged a lawyer who encashed blank signed cheques given as security for legal fees without the Plaintiff's permission. The lawyer filed complaints under Section 138 of the Negotiable Instruments Act against the Plaintiff for stop payment instructions on the cheques.
Finding of the Court:
The court found that the lawyer's conduct constituted professional misconduct and emphasized the need for guidelines on charging professional fees and the creation of a resolution mechanism for complaints from litigants.
Issues: Professional misconduct, encashment of blank signed cheques, complaints under Section 138 of the Negotiable Instruments Act, need for guidelines on charging professional fees, creation of a resolution mechanism for complaints from litigants.
Ratio Decidendi: The court held that encashing blank signed cheques without the client's permission constitutes professional misconduct. It emphasized the need for guidelines on charging professional fees and the creation of a resolution mechanism for complaints from litigants.
Final Decision: The court directed the lawyer to withdraw all complaints filed against the Plaintiff and tendered an unconditional apology. The disputes in the suit were settled, and the settlement terms formed part of the decree. The court also directed the Bar Council of India to consider framing guidelines on charging professional fees and creating a resolution mechanism for complaints from litigants.
Prathiba M. Singh, J.
The present suit for partition has been filed by Smt. Deepa Bhure wife of Late Sh. Jagveer Singh and her two minor sons. Late Sh. Rattan Singh, who died on 31st March, 2014 had two sons, namely, Sh. Jagveer Singh and Sh. Jai Kishan- Defendant No.1. Sh. Jagveer Singh passed away and the Plaintiff has sought partition, rendition of accounts and recovery from her brother in law - Sh. Jai Kishan and her mother-in-law Smt. Bala Devi.
2. The suit was initially listed on 7th November, 2014 on which date an ad interim order was granted directing the Defendants to maintain status quo.
3. The Plaintiff had engaged Mr. P.K. Chauhan, Advocate as her counsel. Preliminary decree was passed in the suit on 7th September, 2018. On 15th January, 2019, an application was moved by the Plaintiff being I.A.404/2019 in which she made the following averments:
That she had engaged Mr. P.K. Chauhan as her counsel;
That she withdrew his services and requested him not to appear in any of her cases;
That he had with him various blank signed cheques which he had taken as security for his professional fee;
Despite instructing Mr. Chauhan not to appear in her cases, he appeared before the Mediation Centre;
Though, she had paid the agreed fee and requested him to return the blank signed cheques, she apprehended that Mr. Chauhan may misappropriate the said blank signed cheques lying with him;
That the counsel applied for certified copies of an order and also filed an I.A. without the consent of the Plaintiff.
4. Considering the nature of allegations, notice was issued to Mr. P.K. Chauhan, Advocate on 15th January, 2019. On 13th February, 2019 the statements of Mr. P.K. Chauhan and the Plaintiff were recorded. The same read as under:
"Statement of Mr. P. K. Chauhan (Advocate), S/o Shri Kailash Singh Chauhan, aged 43 years R/o 17E/716, Konark Enclave, Vasundhara, Ghaziabad and also at Chamber No.555, Saket Court, New Delhi. (M:9811106422)
On S.A.
I met the Plaintiff - Ms. Deepa Bhure in August, 2017. She was introduced to me by my earlier clients Mr. Jayant Nagpal and Mr. Nitish, one of whom is a friend of the Plaintiff. She wanted to file 4-5 cases and the total agreed fee was Rs.41 lakhs. I have handled various cases for her including two criminal cases filed in Saket Court, the present suit for partition, one dispute relating to the Gurgaon property and several matters for recovery of rental amounts of more than Rs.2 crores for the period 2014 to 2017. Excluding the expenses of Rs.2.5 lakhs, I have received a fee of Rs.11 to Rs.12 lakhs entirely through cheques. She gave a total of 14-15 cheques to me and all of them were filled up by Plaintiff herself. All the cheques were encashed in September and December, 2017 after requisite permission of the Plaintiff. She represented to me that she did not have the financial capacity to pay and on receiving the rental amounts, she will pay my fee. The amount of fee was settled in the presence of Mr. Jayant Nagpal and Mr. Nitish. The Plaintiff had to pay a total fee of Rs.41 lakhs to me. On 3rd November, 2018, the Plaintiff had visited my chamber and she informed me that she is agreeable to the draft settlement and she asked me to pursue the same with the Defendants. The Defendants paid me a sum of Rs.2.5 lakhs at the time of entering into the settlement which I accepted with the Plaintiff's permission. On 12th December, 2018, the settlement was entered into between the parties. The draft Settlement agreement was sent to the Plaintiff and to the Defendants' counsel. Both parties were ready to enter into the settlement including the payment of my outstanding fee i.e. Rs.32 lakhs. On 15th December, 2018, the Plaintiff informed me that she wishes to change the counsel. She did not pay my outstanding fee of Rs.32 lakhs. I had seven cheques with me i.e. five cheques of Rs.5 lakhs each, one cheque for
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