R.D. Saxena v. Balram Prasad Sharma (2000) 7 SCC 264
Civil Appeal No. 1938 of 2000** with Contempt Petn. No. 147 of 2000 decided on 02/08/2000
Headnote
(A) Contract Act (9 of 1872) , S.171— Bar Council of India Rules (1961) , R.28, R.29— Advocates Act (25 of 1961) , S.15— Attorney’s lien – Advocate has no lien over litigation files for his unpaid fees files entrusted to Advocate by client – Are not ‘goods bailed’ or ‘saleable goods’.
Words and Phrases – ‘Goods’.
An advocate has no lien on the files entrusted to him by the client. Files containing copies of the records, perhaps some original documents also cannot be equated with the “goods” referred to in the Section 171. The advocate keeping the files cannot amount to ‘goods bailed’. The “bailment” is defined in S. 148 of the Contract Ac as the delivery of goods by one person to another for some purpose, upon a contract that they shall be returned or otherwise disposed of according to the directions of the person delivering them, when the purpose is accomplished. In the case of litigation papers in the hands of the advocate there is neither delivery of goods nor any contract that they shall be returned or otherwise disposed of.That apart, the word “goods” mentioned in Section 171 is to be understood in the sense in which that word is defined in the Sale of Goods Act. It must be remembered that Chapter-VII of the Contract Act, comprising Sections 76 to 123, had been wholly replaced by the Sale of Goods Act, 1930. The word “goods” is defined in S. 2(7) of the Sale of Goods Act. Thus understood “goods” to fall within the purview of S. 171 of the Contract Act should have marketability and the person to whom it is bailed should be in a position to dispose it of in consideration of money. In other words the goods referred to in S. 171 of the Contract Act are saleable goods. There is no scope for converting the case files into money, nor can they be sold to any third party.(Para 7 8 41)
Bar Council of India Rules contain provision specifically prohibiting an advocate from adjusting the fees payable to him by a client against his own personal liability to the client. As a rule an Advocate shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by his client, vide R. 24. Even after providing a right for an advocate to deduct the fees out of any money of the client remaining in his hand at the termination of the proceeding for which the advocate was engaged, it is important to notice that vide R. 29 no lien is provided on the litigation files kept with him. In the conditions prevailing in India with lots of illiterate people among the litigant public it may not be advisable also to permit the counsel to retain the case bundle for the fees claimed by him.
Any such lien if permitted would become susceptible to great abuses and exploitation. That apart, the cause in a Court/tribunal is far more important for all concerned than the right of the legal practitioner for his remuneration in respect of the services rendered for espousing the cause on behalf of the litigant. If a need arises for the litigant to change his counsel pendente lite, that which is more important should have its even course flowed unimpeded. Retention of records for the unpaid remuneration of the advocate would impede such course and the cause pending judicial disposal would be badly impaired. No professional can be given the right to withhold the returnable records relating to the work done by him with his client’s matter on the strength of any claim for unpaid remuneration. The alternative is that the professional concerned can resort to other legal remedies for such unpaid remuneration.(Para 12 13 14)
(B) Advocates Act (25 of 1961) , S.35— “Professional misconduct” – Refusal of Advocate to return files to his client – Amounts to misconduct.
If a client does not want to continue the engagement of a particular advocate it would be a professional requirement consistent with the dignity of the profession that he should return the brief to the client. It is time to hold that such obligation is not only a legal duty but a moral imperative. But if the advocate who is changed midway adopts the stand that he would not return the file until the fees claimed by him is paid, the situation perhaps may turn to dangerous proportion. There may be cases when =a party has no resource to pay the huge amount claimed by the advocate as his remuneration. A party in a litigation may have a version that he has already paid the legitimate fee to the advocate.
At any rate if the litigation is pending the party has the right to get the papers from the advocate whom he has changed so that the new counsel can be briefed by him effectively. In either case it is impermissible for the erstwhile counsel to retain the case bundle on the premise that fees is yet to be paid. This right of the litigant is to be read as the corresponding counterpart of the professional duty of the advocate. Therefore, the refusal to return the files to the client when he demanded the same amounts to misconduct under S. 35 of the Act. Hence, the advocate is liable to punishment for such misconduct. However, regarding the quantum of punishment Court is disposed to take into account two broad aspects : (1) Supreme Court has not pronounced, so far, on the question whether advocate has a lien on the files for his fees (2) the appellant would have bona fide believed, in the light of decisions of certain High Courts, that he did have a lien. In such circumstances held it is not necessary to inflict a harsh punishment on the appellant and a reprimand would be sufficient in the interest of justice on the special facts of this case. Lesser punishment imposed, however, cannot be counted as a precedent.(Para 15 17 18 23 24)
Cases referred
State of M.P. v. Shobharam [AIR 1966 SC 1910] para 16
Barratt v. Gough-Thomas [(1950) 2 All ER 1048] para 33
Union of India v. Delhi Cloth and General Mills Co. Ltd. [AIR 1963 SC 791] para 41
CCE v. Eastend Paper Industries Ltd.[(1989) 4 SCC 244] para 41
‘G’, a Senior Advocate of the Supreme Court, Re [AIR 1954 SC 557] para 41
M, an Advocate, Re [AIR 1957 SC 149] para 41
Judgement
[Papers of Clients – not goods]
K.T. THOMAS, J. – The issue is this: has the advocate a lien for his fees on the litigation papers entrusted to him by his client?
The appellant has been practising as an advocate mostly in the courts at Bhopal, after enrolling himself as a legal practitioner with the State Bar Council of Madhya Pradesh. According to him, he was appointed as legal advisor to Madhya Pradesh State Cooperative Bank Ltd. (“the Bank”) in 1990 and the Bank continued to retain him in that capacity during the succeeding years. He was also engaged by the said Bank to conduct cases in which the Bank was a party. However, the said retainership did not last long. On 17-7-1993 the Bank terminated the retainership of the appellant and requested him to return all the case files relating to the Bank. Instead of returning the files the appellant forwarded a consolidated bill to the Bank showing an amount of Rs 97,100 as the balance payable by the Bank towards the legal remuneration to which he is entitled. He informed the Bank that the files would be returned only after settling his dues.
7. We would first examine whether an advocate has lien on the files entrusted to him by the client. Learned counsel for the appellant endeavoured to base his contention on Section 171 of the Indian Contract Act which reads thus:
“171. Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.”
8. Files containing copies of the records (perhaps some original documents also) cannot be equated with the “goods” referred to in the section. The advocate keeping the files cannot amount to “goods bailed”. The word “bailment” is defined in Section 148 of the Contract Act as the delivery of goods by one person to another for some purpose, upon a contract that they shall be returned or otherwise disposed of according to the directions of the person delivering them, when the purpose is accomplished. In the case of litigation papers in the hands of the advocate there is neither delivery of goods nor any contract that they shall be returned or otherwise disposed of. That apart, the word “goods” mentioned in Section 171 is to be understood in the sense in which that word is defined in the Sale of Goods Act. It must be remembered that Chapter VII of the Contract Act, comprising Sections 76 to 123, had been wholly replaced by the Sale of Goods Act, 1930. The word “goods” is defined in Section 2(7) of the Sale of Goods Act.
9. Thus understood “goods” to fall within the purview of Section 171 of the Contract Act should have marketability and the person to whom they are bailed should be in a position to dispose of them in consideration of money. In other words the goods referred to in Section 171 of the Contract Act are saleable goods. There is no scope for converting the case files into money, nor can they be sold to any third party. Hence, the reliance placed on Section 171 of the Contract Act has no merit.
10. In England the solicitor had a right to retain any deed, paper or chattel which had come into his possession during the course of his employment. It was the position in common law and it was later recognized as the solicitor’s right under the Solicitors Act, 1860. In Halsbury’s Laws of England, it is stated thus (vide para 226 in Vol. 44):
“226. Solicitor ’s rights. – At common law a solicitor has two rights which are termed liens. The first is a right to retain property already in his possession until he is paid costs due to him in his professional capacity, and the second is a right to ask the court to direct that personal property recovered under a judgment obtained by his exertions stand as security for his costs of such recovery. In addition, a solicitor has by statute a right to apply to the court for a charging order on property recovered or preserved through his instrumentality in respect of his taxed costs of the suit, matter or proceeding prosecuted or defended by him.”
12. After independence the position would have continued until the enactment of the Advocates Act, 1961 which has repealed a host of enactments including the Indian Bar Council Act. When the new Bar Council of India came into existence it framed rules called the Bar Council of India Rules as empowered by the Advocates Act. Such Rules contain provisions specifically prohibiting an advocate from adjusting the fees payable to him by a client against his own personal liability to the client. As a rule an advocate shall not do anything whereby he abuses or takes advantage of the confidence reposed in him by his client (vide Rule 24). In this context a reference can be made to Rules 28 and 29 which are extracted below:
“28. After the termination of the proceeding, the advocate shall be at liberty to appropriate towards the settled fee due to him, any sum remaining unexpended out of the amount paid or sent to him for expenses, or any amount that has come into his hands in that proceeding.
29. Where the fee has been left unsettled, the advocate shall be entitled to deduct, out of any moneys of the client remaining in his hands, at the termination of the proceeding for which he had been engaged, the fee payable under the rules of the court in force for the time being, or by then settled and the balance, if any, shall be refunded to the client.”
13. Thus, even after providing a right for an advocate to deduct the fees out of any money of the client remaining in his hand at the termination of the proceeding for which the advocate was engaged, it is important to notice that no lien is provided on the litigation files kept with him. In the conditions prevailing in India with lots of illiterate people among the litigant public it may not be advisable also to permit the counsel to retain the case bundle for the fees claimed by him. Any such lien if permitted would become susceptible to great abuses and exploitation.
14. There is yet another reason which dissuades us from giving approval to any such lien. We are sure that nobody would dispute the proposition that the cause in a court/tribunal is far more important for all concerned than the right of the legal practitioner for his remuneration in respect of the services rendered for espousing the cause on behalf of the litigant. If a need arises for the litigant to change his counsel pendente lite, that which is more important should have its even course flow unimpeded. Retention of records for the unpaid remuneration of the advocate would impede such course and the cause pending judicial disposal would be badly impaired. If a medical practitioner is allowed a legal right to withhold the papers relating to the treatment of his patient which he thus far administered to him for securing the unpaid bill, that would lead to dangerous consequences for the uncured patient who is wanting to change his doctor. Perhaps the said illustration may be an overstatement as a necessary corollary for approving the lien claimed by the legal practitioner. Yet the illustration is not too far-fetched. No professional can be given the right to withhold the returnable records relating to the work done by him with his client’s matter on the strength of any claim for unpaid remuneration. The alternative is that the professional concerned can resort to other legal remedies for such unpaid remuneration.
15. A litigant must have the freedom to change his advocate when he feels that the advocate engaged by him is not capable of espousing his cause efficiently or that his conduct is prejudicial to the interest involved in the lis, or for any other reason. For whatever reason, if a client does not want to continue the engagement of a particular advocate it would be a professional requirement consistent with the dignity of the profession that he should return the brief to the client. It is time to hold that such obligation is not only a legal duty but a moral imperative.
16. In civil cases, the appointment of an advocate by a party would be deemed to be in force until it is determined with the leave of the court [vide Order 3 Rule 4(1) of the Code of Civil Procedure]. In criminal cases, every person accused of an offence has the right to consult and be defended by a legal practitioner of his choice which is now made a fundamental right under Article 22(1) of the Constitution. The said right is absolute in itself and it does not depend on other laws. In this context reference can be made to the decision of this Court in State of M.P. v. Shobharam [AIR 1966 SC 1910]. The words “of his choice” in Article 22(1) indicate that the right of the accused to change an advocate whom he once engaged in the same case, cannot be whittled down by that advocate by withholding the case bundle on the premise that he has to get the fees for the services already rendered to the client.
17. If a party terminates the engagement of an advocate before the culmination of the proceedings that party must have the entire file with him to engage another advocate. But if the advocate who is changed midway adopts the stand that he would not return the file until the fees claimed by him are paid, the situation perhaps may turn to dangerous proportions. There may be cases when a party has no resources to pay the huge amount claimed by the advocate as his remuneration. A party in a litigation may have a version that he has already paid the legitimate fee to the advocate. At any rate if the litigation is pending the party has the right to get the papers from the advocate whom he has changed so that the new counsel can be briefed by him effectively. In either case it is impermissible for the erstwhile counsel to retain the case bundle on the premise that fees were yet to be paid.
18. Even if there is no lien on the litigation papers of his client an advocate is not without remedies to realise the fee which he is legitimately entitled to. But if he has a duty to return the files to his client on being discharged the litigant too has a right to have the files returned to him, more so when the remaining part of the lis has to be fought in the court. This right of the litigant is to be read as the corresponding counterpart of the professional duty of the advocate.
25. We, therefore, alter the punishment to one of reprimanding the appellant. However, we make it clear that if any advocate commits this type of professional misconduct in future he would be liable to such quantum of punishment as the Bar Council will determine and the lesser punishment imposed now need not be counted as a precedent.
SETHI, J. – 31. In England also, a belief existed from the earliest times that the lawyer’s fees is not a compensation to him for discharge of legal obligations but a gratuity or an honorarium which the client bestowed on him in token of his gratitude. The lawyers were considered as officers of the court, the tradition being that the law was an honorary occupation and not a means of livelihood. Early advocates were generally persons in holy orders who rendered their services to the weak and afflicted without charge and as an act of pity.
32. Under common law, the rights of a solicitor are called as liens, which are of two types namely:
(1) a “retaining lien ”, i.e., a right to retain property already in his possession until he has been paid costs due to him in his professional character; and
(2) a “lien on property recovered or preserved”, i.e., a right to ask the court to direct that personal property recovered under a judgment obtained by his exertions stand as security for his costs of such recovery.
33. According to Cordery on Solicitors, 7th Edn., the retaining lien is founded on the general law of lien which springs from possession and is governed by the same rules as other cases of possessory lien. Evershed, M.R. in Barratt v. Gough-Thomas [(1950) 2 All ER 1048], observed:
“It is a right at common law depending, it has been said, on implied agreement. It has not the character of an encumbrance or equitable charge. It is merely passive and possessory, that is to say, the solicitor has no right of actively enforcing his demand. It confers on him merely the right to withhold possession of the documents or other personal property of his client or former client…. It is wholly derived from, and, therefore coextensive with, the right of the client to the documents or other property:”
34. According to Cordery the property upon which lien can be claimed is in the form of deeds, papers or other personal property which comes into a solicitor’s possession in the course of his professional employment with the sanction of the client and/or client’s property, such as bill of exchange, application of shares, share certificates, a debenture trust deed, a policy of assurance, letters of administration or money. After referring to various authorities of English courts, the law relating to lien and its retention has been summarised in Halsbury’s Laws of England, Vol. 44 (1), 1995 Edn., as under:
“Property affected by retaining lien.- The general rule is that the retaining lien extends to any deed, paper or personal chattel which has come into the solicitor’s possession in the course of his employment and in his capacity as solicitor with the client’s sanction and which is the client ’s property. The following may thus be subject to a retaining lien: (1) a bill of exchange; (2) a cheque; (3) a policy of assurance; (4) a share certificate; (5) an application for shares; (6) a debenture trust deed; (7) letters patent; (8) letters of administration; (9) money, including money in a client account, although only the amount due to the solicitor, and maintenance received by a solicitor if not subject to an order as to its application or bound to be applied, in effect, as trust money; or (10) documents in a drawer of which the solicitor is given the key.
The lien does not extend to (a) a client’s original will; or (b) a deed in favour of the solicitor but reserving a life interest and power of revocation to the client; or (c) original court records; or (d ) documents which did not come into the solicitor’s hands in his capacity as solicitor for the person against whom the lien is claimed or his successor, but as mortgagee, steward of a manor or trustee. Moreover, where documents are delivered to a solicitor for a particular purpose under a special agreement which does not make express provision for a lien in favour of the solicitor, as perhaps the raising of money, or money is paid to the solicitor for a particular purpose so that he becomes a trustee of the money, no lien arises over those documents or that money unless subsequently left in the solicitor’s possession for general purposes. Otherwise the lien extends to the property whatever the occasion of delivery, except that where a solicitor acts for both mortgagor and mortgagee and the mortgage is redeemed the solicitor cannot set up a lien on the deeds against the mortgagor.”
It is further stated that such a lien extends only to the solicitor’s taxable costs, charges and expenses incurred on the instructions of the client against whom the lien is claimed and for which the client is personally liable including the costs of recovering the remuneration by action or upon taxation.
35. It follows, therefore, that even under the common law no lien can be claimed with respect to the case file and such documents which are necessary for the further progress of the lis filed in the court. Even in England the right of retention has been much diluted by various exceptions created by decisions, chiefly by the courts of equity on the basis of what may be just and equitable as between the parties with conflicting interests.
39. Reference to “goods” in Section 171 of the Contract Act cannot, by any imagination, be stretched to mean the case papers, entitling their retention by the lawyer as his lien for the purposes of realising his fee. Besides the meaning attached to the “goods” under Section 2(7) of the Sale of Goods Act, under the general law the “goods” have been defined in Bailey’s Large Dictionary of 1732 as “merchandise” and by Johnson, who followed as the next lexicographer, it is defined to be moveables in a house; personal or immovable estates; wares, freight, merchandise. Webster defines the word “goods” thus:
“Goods, noun, plural; (1) moveables; household furniture; (2) Personal or moveable estate, as horses, cattle, utensils, etc. (3) wares; merchandise; commodities bought and sold by merchants and traders.”
41. This Court in Union of India v. Delhi Cloth and General Mills Co. Ltd. [AIR 1963 SC 791], held that to become “goods” an article must be something which can ordinarily come to the markets to be bought and sold. In CCE v. Eastend Paper Industries Ltd.[(1989) 4 SCC 244] it was stated that goods are understood to mean as identifiable articles known in the markets as goods and marketed and marketable in the market as such. Where the Act does not define “goods”, the legislature should be presumed to have used that word in its ordinary dictionary meaning i.e. to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market as such.
Thus, looking from any angle, it cannot be said that the case papers entrusted by the client to his counsel are the goods in his hand upon which he can claim a retaining lien till his fee or other charges incurred are not paid. In ‘G’, a Senior Advocate of the Supreme Court, Re [AIR 1954 SC 557], this Court observed that it was highly reprehensible for an advocate to stipulate for or receive a remuneration proportioned to the result of litigation or a claim whether in the form of a share in the subject-matter, a percentage or otherwise. An advocate is expected, at all times, to conduct himself in a manner befitting his status as an officer and a gentleman by upholding the high and honourable profession to whose privilege he has been admitted after his enrolment. If an advocate departs from the high standards which the profession has set for itself and conducts himself in a manner which is not fair, reasonable and according to law, he is liable to disciplinary action. In M, an Advocate, Re [AIR 1957 SC 149], this Court observed:
“As has been laid down by this Court In the matter of ‘G’, a Senior Advocate of the Supreme Court the Court, in dealing with cases of professional misconduct is ‘not concerned with ordinary legal rights, but with the special and rigid rules of professional conduct expected of and applied to a specially privileged class of persons who, because of their privileged status, are subject to certain disabilities which do not attach to other men and which do not attach even to them in a non-professional character… he (a legal practitioner) 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’. It appears to us that the fact of there being no specific rules governing the particular situation, which we are dealing with, on the facts found by us, is not any reason for accepting a less rigid standard. If any, the absence of rules increases the responsibility of the members of the profession attached to this Court as to how they should conduct themselves in such situations, having regard to the very high privilege that an advocate of this Court now enjoys as one entitled, under the law, to practise in all the courts in India.”
42. In our country, admittedly, a social duty is cast upon the legal profession to show the people beckon (sic beacon) light by their conduct and actions. The poor, uneducated and exploited mass of the people need a helping hand from the legal profession, admittedly, acknowledged as a most respectable profession. No effort should be made or allowed to be made by which a litigant could be deprived of his rights, statutory as well as constitutional, by an advocate only on account of the exalted position conferred upon him under the judicial system prevalent in the country. It is true that an advocate is competent to settle the terms of his engagement and his fee by private agreement with his client but it is equally true that if such fee is not paid he has no right to retain the case papers and other documents belonging to his client. Like any other citizen, an advocate has a right to recover the fee or other amounts payable to him by the litigant by way of legal proceedings but subject to such restrictions as may be imposed by law or the rules made in that behalf. It is high time for the legal profession to join heads and evolve a code for themselves in addition to the mandate of the Advocates Act, Rules made thereunder and the Rules made by various High Courts and this Court, for strengthening the belief of the common man in the institution of the judiciary in general and in their profession in particular. Creation of such a faith and confidence would not only strengthen the rule of law but also result in reaching excellence in the profession.
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