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Manilal Lallubhai Vs. the Bharat Spinning and Weaving Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number Award No. 106 of 1931 and Appeal No. 51 of 1932
Judge
Reported inAIR1936Bom242; (1936)38BOMLR388; 163Ind.Cas.467
AppellantManilal Lallubhai
RespondentThe Bharat Spinning and Weaving Co. Ltd.
Excerpt:
.....retaining same attorney-appearance in court by separate counsel-party and party costs-costs of separate appearance-taxing master's decision-interference by court.;defendants appearing by the same attorney are entitled as a rule to one bill of costs; but if their interests are diverse, they are entitled to appear by separate counsel and to costs so incurred. there must be reasonable probability of a substantial difference in the defences before they can sever in their appearances.;gorakhram v. pirozsha (no. 1) (1932) 35 bom. l.r. 93, 95, followed.;the fact that two or more defendants signed separate retainers is a matter for consideration in determining whether their interests are identical or not, though it is by no means a decisive test. the real test is, whether..........of separate counsel on the chamber summons without an express order of the court, and that the costs separately incurred on behalf of the 2nd appellant in the court below should not be allowed .between party and party on the ground that they were incurred merely at the desire of the party, viz., the 2nd appellant madhavlal lallubhai, and need not have been incurred at all. it is further contended that the interests of the two appellants were identical, and no separate work was done by counsel who appeared for the 2nd appellant at the trial of the issues. the appellants' counsel contends that there are really two bills of costs and not one. i do not think it can be correctly said that there are two separate bills of costs for the two appellants. there is only one bill as is stated in.....
Judgment:

B.J. Wadia, J.

1. This is a chamber summons taken out by the Bharat Spinning and Weaving Company, Limited, who were the respondents in Appeal No. 51 of 1932, for an order that their objections dated April 9, 1934, to the taxation of the bill of costs of the appellants may be allowed, and the appellants ordered to pay their costs of and incidental to this summons and also of the objections filed by them before the Taxing Master. The bill of costs was lodged for taxation by the appellants' attorneys, Messrs. Khandwalla and Chhotalal, on September 15, 1933, and the taxation was completed on or about March 22, 1934. Thereafter the respondents filed their objections, and a warrant to review the taxation was issued in the ordinary course. After hearing the attorneys of the parties the Taxing Master gave his judgment on August 15, 1934, a copy of which is annexed to his certificate dated August 17, 1934.

2. There were disputes between the company and the firm of Mulchand Pranjiwandas in respect of certain dealings in piecegoods which were referred to arbitration. The arbitrators made and published their award under which the firm was held liable to pay a sum of Rs. 45,000 odd to the company. The award was duly filed in Court. The company thereafter called upon four persons as being partners in the firm of Mulchand Pranjiwandas to pay the amount. Two of these four are the appellants. They contended that they were not partners in the firm, and denied liability. The company thereupon took out a chamber summons dated July 21, 1931, for leave to execute the award made against the firm against the four persons including the appellants. The appellants showed cause, and the summons was adjourned S into Court for trial of the issues arising on the summons. Two issues were raised at the trial, viz., (1) whether Manilal Lallubhai and [or Madhavlal Lallubhai were partners in the firm of Mulchand Pranjiwandas at the date of the accrual of the cause of action, and (2) whether the said persons or either of them held themselves out as partners in the firm of Mulchand Pranjiwandas. Certain particulars of the holding out were furnished by the company. An order was made for further and better particulars which were subsequently furnished. At the trial the two appellants were represented by two different counsel, one for each appellant, though both were instructed by the same firm of solicitors, viz., Messrs. Khandwalla and Chhotalal. Kania J. held after a lengthy trial that the appellants were partners in the firm or had held themselves out as such. The appellants appealed, and the appeal was allowed. The company who were respondents were ordered to pay to the appellants their costs of the appeal and of the chamber summons dated July 21, 1931, including the costs of trial of the issues in the Court below and of the order dated September 8, 1932, when taxed. The Appeal Court also certified that it was a fit case for the engagement of two counsel in appeal. Two counsel had been briefed for the appellants jointly on the hearing of the appeal.

3. In lodging their bill of costs for taxation, the attorneys for the appellants brought in the bill in two columns for the 1st and the 2nd appellant separately, and the Taxing Master has allowed two sets of costs to the 1st and the 2nd appellant separately in respect of the hearing on the trial of the issues, though they are not identically the same set of costs in respect of various items. The respondents contend that the Taxing Master exceeded the order of the Appeal Court in taxing the bill, as the Appeal Court allowed the costs of the trial of the issues before Kania J., but did not expressly order separate sets of costs for the two appellants. The respondents further contend that the appellants were not entitled to the costs of separate counsel on the chamber summons without an express order of the Court, and that the costs separately incurred on behalf of the 2nd appellant in the Court below should not be allowed .between party and party on the ground that they were incurred merely at the desire of the party, viz., the 2nd appellant Madhavlal Lallubhai, and need not have been incurred at all. It is further contended that the interests of the two appellants were identical, and no separate work was done by counsel who appeared for the 2nd appellant at the trial of the issues. The appellants' counsel contends that there are really two bills of costs and not one. I do not think it can be correctly said that there are two separate bills of costs for the two appellants. There is only one bill as is stated in the chamber summons, but the bill is divided into two parts on behalf of the two appellants. It is also not correct to say that this is a double set of costs, one for Manilal Lallubhai, the 1st appellant, and another identically the same for Madhavlal Lallubhai, the 2nd appellant. It was pointed but that in many cases the items in the bill have been divided into halves between the two appellants. Some items have been allowed separately to the two appellants when they could not be divided into halves. The separate items in the bill are not in dispute before me on this chamber summons. They have been pointed out by the one party or the other merely in support of their contentions. To take for instance the main item in respect of instruction charges, the attorneys for the appellants put down the figure of Rs. 3,750 for each of the two appellants separately. The Taxing Master has allowed Rs. 2,750 for instruction charges on behalf of the 1st appellant and Rs. 1,250 on behalf of the other. I take it to be the usual practice of his office that before the item for instruction charges is settled by him he looks at the brief given to counsel at the hearing, and goes through the observations and instructions to counsel contained in the brief.

4. The important point for consideration is one of the principle of taxation on which the bill has been taxed. The Taxing Master had to decide whether the appellants were justified not only in briefing two counsel for the two appellants separately at the hearing of the issues before Kania J., but in incurring separate sets of costs in respect of various items mentioned in the bill for each of the two appellants. I have already stated that with regard to the costs of the hearing in the Court below, the only order made by the Appeal Court was that the respondents should pay the appellants' costs of the appeal. It was therefore argued that the Appeal Court had impliedly disallowed separate sets of costs for the two appellants. I do not think that that conclusion necessarily follows. Kania J. could not have dealt with the point of separate sets of costs, because he held in favour of the respondents, and ordered the appellants to pay their costs. The Appeal Court must have been well aware that counsel had appeared separately for the two appellants in the Court below, but it is common ground that neither the appellants nor the respondents argued before the Appeal Court whether two sets of costs should be allowed or only one. The Taxing Master therefore had to consider on principle whether the facts and circumstances of this case and the contentions of the parties made it a reasonably necessary expense for the employment of counsel for the two appellants separately, and also for incurring separate sets of costs for the two appellants from the time the warrant was signed by each in favour of the attorneys, or whether it was an unusual or extraordinary expense.

5. The principle of taxation on which costs of briefing separate counsel are allowed is laid down in the Guide to Costs by Porter and Wortham, 13th Edn., at p. 920, as follows :-

Defendants appearing by the same solicitor, however numerous or diverse they or their interests may be, can have but one bill of costs; but this will not limit their representation in Court. If their interests are diverse, separate counsel may appear in Court, and their charges will be allowed.

The test in such cases is, as was pointed out by me in an earlier judgment in Gorakhram v. Pirozsha (No. 1) (1932) 35 Bom. L.R. 93, whether there is a reasonable probability of there being a substantial difference in the two defences. In my opinion the same test should also apply in considering whether the attorneys were justified in incurring separate sets of costs in respect of various items for the two appellants, not altogether separate sets of costs, one identical with the other, but separate in respect of various items wherever necessary. The test really is whether the interests of the parties were identical, or whether before the hearing commenced there was a reasonable probability of the defences being substantially different. Counsel for the appellants argued that there was no justification even for the appearance of the two appellants by separate counsel in the Court below, for the record showed that the cross-examination of the witnesses, the arguments advanced, and the authorities or almost all the authorities cited on behalf of appellant No. 1 were adopted by counsel who appeared for appellant No. 2. He also said that the 2nd appellant was examined as a witness on behalf of appellant No. 1 which showed how identical their interests were. He further argued that at the utmost the Court should only allow the appellants the costs of the briefing charges for the two counsel, but not a separate set of costs in respect of the items allowed by the Taxing Master.

6. The Taxing Master in his judgment has stated that the retainers signed by the two alleged partners, Manilal and Madhavlal, in favour of the attorneys are separate. They did not sign one joint retainer. That is certainly a matter for consideration in determining whether the interests of the two parties who signed two separate retainers were identical, but it does not necessarily follow from the fact that two retainers were separately signed that the interests of the two parties cannot be identical. Otherwise it might be said that even parties who were really in the same interest should be entitled to separate sets of costs, if only they went on separate days to the same attorneys and signed separate retainers. I do not think that the judgment of the Taxing Master is based solely on that consideration. The test which he applied was to ascertain whether before the trial commenced there was a reasonable probability of a substantial difference in the defences. I do not agree with the respondents' counsel that the only test of the identity of interests is to consider what actually happened at the trial at every stage of the proceedings. The question is whether the attorneys were justified from the commencement in having a reasonable apprehension that the cases of their two clients were not identically the same. It was argued that in that case they should have kept one client and sent away the other to a different firm of attorneys, but I do not think that there was such a conflict of interest as to necessitate appearance by separate sets of attorneys. They were not claiming anything one against the other. They were interested in fighting the respondents, but in the fight various considerations might have to be urged on behalf of the one which might not have to be urged on behalf of the other. What is a reasonable apprehension cannot be strictly defined, and the following observations made by the Master of the Rolls in Greedy v. Lavender (1848) 11 Beav. 417 are pertinent;'in this connection (pp. 419-20):-

Parties in the same interest ought to join in their defence; but it is found almost impossible to lay down any rule to punish parties who do not join in their defence. The protection of the suitor is in the discretion and honour of counsel and solicitors. There are such shades of difference-such nice distinctions, that the Court can seldom come to a satisfactory conclusion. When the point has been brought before me, I have experienced great difficulty in punishing persons for not joining somebody else in their defence.

Keeping this difficulty in mind, I would say that all that the Taxing Master has to see is that the parties have not unnecessarily augmented costs by each filing a separate appearance.

7. It was pointed out that except for the difference in the name of the two appellants there were identically the same affidavits on the chamber summons. That is not conclusive, because if the two appellants signed retainers separately in favour of the same attorneys, and one affidavit is sent to the opposite side before the other, it may well be that the affidavits are almost identically the same. It was further pointed out that only one counsel appeared on the chamber summons, that there was one summons for particulars, that there was one appeal between the two appellants, that at the hearing before Kania J. one counsel did all the work, and the other had to do little if at all. This is an argument which cuts both ways; it shows that wherever possible, extra costs have been saved and not incurred. On the other hand it was also pointed out by the counsel for the appellants that Mr. M. S. Vakil who appeared for appellant No. 2 in the Court below did argue his client's case, and that he did ask questions of his own client over and above the questions that were asked by Mr. Lalji on behalf of appellant No. 1. The issues that were raised, which I have referred to before, also show that there was some divergence of interest between the two appellants. There is a divergence of interest appearing also from the further and better particulars of the holding out which were furnished by the respondents. In some cases it is the 1st appellant with some other party or parties who made the representation; in other cases it is both the appellants, or appellant No. 1 and]or the appellant No. 2, or the appellant No. 2 alone. The judgment of Kania J. also differentiates between the cases of the two appellants. In my opinion prima facie each person alleged to be a partner or to have held himself out as a partner has a right to defend himself separately. No doubt the two appellants are brothers, but could it be said that one brother was entirely safe and justified in entrusting his defence to the counsel for the other? Could it also be said that there was no reasonable probability that one might be held to be liable, whereas the other might have had judgment pronounced in his favour Counsel for the respondents argued that one counsel could have done the work for both, and that it often happened that where one counsel appeared for two parties only one was held liable and the other was not. That does happen in some cases, but where there is a reasonable probability from the commencement of the trial of a difference in the two defences, it is also probable that a situation may arise when it may be embarrassing for the same counsel to throw himself first into the defence of the one client and afterwards into that of the other, although there may not be any material incompatibility between them. That was pointed out by Sargant J. in A. G. Spalding v. A. W. Carnage, Limited [1914] 2 Ch. 405. There are cases in which it has been held that parties are not entitled to sever, but each case must depend upon its own facts and circumstances. It is provided by Rule 546(') of our High Court Rules that

No costs are to be allowed on taxation which do not appear to the Taxing Officer to have been necessary or proper for the attainment of justice or defending the rights of the party or which appear to the Taxing Officer to have been incurred through overcaution, negligence, or mistake, or merely at the desire of the party.

It has been held that this rule applies to taxation between party and party : Parashmam Shamdasani v. Tata Industrial Bank : AIR1926Bom18 . In my opinion the costs incurred on behalf of the two appellants separately were proper for defending the rights of either of them.

8. I agree with the Taxing Master that a certain amount of latitude has to be allowed to the solicitors in considering before the commencement of the proceedings whether there is a reasonable probability of the defences being different or not. I do not think a solicitor can always foretell exactly how the case will shape as it proceeds, especially when there is the chance of a long hearing. Moreover, I have already stated that there is not in this case a double set of costs in the sense that the costs incurred on behalf of one appellant are identically the same as the costs incurred on behalf of the other, I have not gone into the items separately, as no particular item is objected to. The question is one of principle, and in the principle which the Taxing Master has adopted I think he was substantially correct. In respect of the items of 'Costs the Taxing Master has to use his discretion, and the Court does not lightly interfere with that discretion except in extreme cases where there has been gross abuse or serious mistake or when he has acted on a wrong principle or applied an altogether wrong consideration.

9. In the result the summons must be dismissed with costs. Counsel certified. Costs to be taxed.


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