High Court of Kerala
K.J. Mathew, K. Narayana Kurup, JJ.
State Bank Of India - Appellant
Versus
Viswanatha Niryath P Ltd - Respondent
C.M.P. No. 3060 of 1993
Decided On : 28-02-1994
fees payable to an Advocate - Termination of Engagement - Legal Practitioners Act 1879, Legal Practitioners (Fees) Act 21 of 1926, Advocates Act 25 of 1961, Bar Council of India Rules 1961, Madras High Court rulings, Bombay High Court rulings, Calcutta High Court rulings, Mysore High Court rulings, Karnataka High Court rulings, Nagpur High Court rulings, Andhra Pradesh High Court rulings, Patna High Court rulings - The court held that a legal practitioner is entitled to a lien on the records and property recovered by his efforts to protect his right to recover his fees and costs from his client. If the engagement of a legal practitioner is terminated before the disposal of the litigation, the court may fix the fees payable to the Advocate based on the nature of work done and the presence of special circumstances. The court also emphasized the importance of fair treatment by the State Bank of India, being an instrumentality of the State, and highlighted the legal rights of Advocates engaged by scheduled banks.
Fact of the Case:
The State Bank of India engaged an Advocate for conducting suits and other proceedings relating to the dealings of the Bank of Cochin Ltd. After the Bank decided to engage other Advocates, the Advocate demanded fees, leading to a dispute over the termination of engagement and the payment of fees.
Finding of the Court:
The court found that the Advocate was entitled to full fees in the appeals, granted leave to the Bank to determine the Advocate's appointment on condition of paying full fees as per the Advocates' Fees Rules, and emphasized the Advocate's legitimate expectation to receive full fees in every matter entrusted to him.
Issues: The main issue was the determination of the fees payable to an Advocate whose engagement was terminated by the client before the disposal of the litigation.
Ratio Decidendi: The court held that a legal practitioner is entitled to a lien on the records and property recovered by his efforts to protect his right to recover his fees and costs from his client. The court may fix the fees payable to the Advocate based on the nature of work done and the presence of special circumstances. The court also emphasized the importance of fair treatment by the State Bank of India, being an instrumentality of the State, and highlighted the legal rights of Advocates engaged by scheduled banks.
Final Decision: The Advocate was granted full fees in the appeals, and the Bank was granted leave to determine the Advocate's appointment on condition of paying full fees as per the Advocates' Fees Rules.
Key Points: - A legal practitioner is entitled to a lien on records and property recovered by his efforts to protect his right to recover fees and costs from his client. (!) (!) - The court may fix the fees payable to the Advocate based on the nature of work done and the presence of special circumstances when engagement is terminated before disposal of litigation. (!) (!) - Advocates engaged by scheduled banks have legal rights under Advocate Fees Rules and are entitled to fair treatment; banks must act fairly. (!) (!) - The fees rules outline that an advocate shall ordinarily be paid according to prescribed rules, with potential adjustments based on context like execution petitions, appeals, and stage of proceedings (e.g., one-third, one-half, or full fees depending on case stage). (!) (!) - When an engagement is terminated by the client, the court examines whether the advocate discharged the client or the client discharged the advocate, and may grant fees accordingly, considering special circumstances. (!) - The relationship between lawyer and client in India involves trust; the lawyer may retain papers and seek fees, and changes of counsel require safeguards to ensure payment of dues. (!) (!) (!) - State banks, as instrumentality of the State, are expected to act fairly in matters involving advocate fees and engagement changes. (!)
John Mathew, J. -
1. The Judgment of the Court was delivered by John Mathew, J.- What is the fees payable to an Advocate whose engagement is terminated by the client before the disposal of the litigation? This question arises in these petitions filed by the 1st respondent in these appeals. These appeals arise from two suits filed by the 1st respondent, namely, State Bank of India. The erstwhile Bank of Cochin Ltd. was amalgamated with the State Bank of India in 1985. Even so the State Bank of India continued to engage the standing counsel for the Bank of Cochin Ltd. for conducting the suits and other proceedings relating to the dealings of the Bank of Cochin Ltd. The suits from which these appeals arose were two such proceedings. It is said that there are other suits, execution, etc., in which the Advocate of the erstwhile Bank of Cochin Ltd. is being engaged. These two suits, namely, O.S. No. 118 of 1984 and O.S.No. 153 of 1984 of the Sub Court, Cochin, in which the State Bank of India was the plaintiff were decreed by the Trial Court. A.S. No. 523 of 1991 is the appeal filed by defendants 5 and 6 in O.S. No. 153 of 1984 and A.S. No. 545 of 1991 is the appeal filed by defendants 4, 6 and 1 in O.S. No. 118 of 1984. In these appeals also the State Bank of India engaged the same Advocate. In both the appeals the State Bank of India is the 1st respondent. During the pendency of the appeals the 1st respondent, State Bank of India, which institution is hereinafter referred to as 'the Bank' filed C.M.P. No. 3060 of 1993 in A.S. No. 523 of 1991 to grant leave to the Bank to determine the appointment of its counsel and to allow the Bank to engage some other counsel to conduct the appeal. In A.S. No. 545 of 1991 the Bank filed a similar petition which is C.M.P. No. 3061 of 1993. For the sake of convenience the Bank's present counsel is hereinafter referred to as 'the Advocate'. In view of general importance of the question to be decided we issued notice to the Bar Council and to the Advocates Association. Their learned counsel were also heard.
2. In the affidavit in support of these petitions the Branch Manager of the Willingdon Island branch of the Bank stated that 'following a comprehensive review of all the suits filed by erstwhile Bank of Cochin Ltd., a decision had been taken by the Controlling Authorities of the Bank to withdraw all briefs from the Advocate and to engage other Advocates in its panel for the conduct of all appeals, execution petitions, etc. Accordingly Ext. R-1 letter was sent by the bank to the Advocate on 2nd June 1993 intimating him that the engagement stood terminated and requesting him to hand over the files. It is also stated that the Advocate is demanding 1/3rd of the fees allowable under the Advocate Fee rules. According to the affidavit, the Advocate is not entitled to the fees and So he was intimated that the fees cannot be paid. The affidavit further states that the Advocate was paid his fees in the Trial Court. The Advocate is only entitled to reasonable remuneration. 'Even this he is not entitled to as it is found that he had only filed a vakkalath'. Since the claim for fees being 'unreasonable and unfair' these petitions are filed for leave - to determine the appointment of the Advocate in these appeals. Notice of these petitions was given to the Advocate. He has filed an affidavit in A. S. No. 523 of 1991 in reply to the averments in the petitions.
3. Along with the affidavit the Advocate has also produced Exts. R-1 to R-10. Ext. R-1 is the copy of the letter dated 2nd June 1993 from the Deputy General Manager of the Bank who wanted the return of the case files on the ground that the bank wanted the case to be conducted by an Advocate from their panel of Advocates. In reply to this letter the Advocate sent a letter dated 25th June 1993 addressed to the Deputy General Manager in his official address. Copy of that letter is marked as Ext. R-2. In that letter it was stated as follows:
"The Branch M
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