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Tyabji, Dayabhai and Co. Vs. Jetha Devji and Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Reported inAIR1927Bom542
AppellantTyabji, Dayabhai and Co.
RespondentJetha Devji and Co.
Excerpt:
- [couto; m.l. pendse, jj.] in the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the petitioners, because while passing the assessment order, it is always open to the petitioners to point out that the assets recovered in the search were not undisclosed to point out that the assetsrecovered in the search were not undisclosed income. secondly, the order passed under s. 132(5) is appealable under the provisions of the act and if there is any violation in the exercise of the power, then the proper remedy is to lodge an appeal before the appellate authority. thirdly, even assuming that there is some breach in exercise of power s. 132(5) such breach is not so fatal as to warrant quashing the entire order. income tax act.....marten, c.j.1. this is an appeal from a judgment of mr. justice mirza, dismissing, inter alia, a summons taken out on september 27, 1926, in two suits, nos. 1405 of 1922 and 3104 of 1925. by messrs. tyabji dayabhai & co., attorneys for the plaintiff hansraj tejmal in the first suit. that summons asked for a declaration that the applicants had a lien on the sum of rs. 3.572-9-8 then in the hands of the sheriff of bombay as received by him in suit no. 3104 of 1925, and that by reason of that lien the sheriff do pay the said sum to the applicants in priority to the attaching craditors messrs. jetha davji & co., the plaintiffs in suit no. 3104 of 1925. mr. ju3tic mirza, dismissed the summons; the applicants, the attorneys, appeal.2. the case raises a point of importance not only to the.....
Judgment:

Marten, C.J.

1. This is an appeal from a judgment of Mr. Justice Mirza, dismissing, inter alia, a summons taken out on September 27, 1926, in two suits, Nos. 1405 of 1922 and 3104 of 1925. by Messrs. Tyabji Dayabhai & Co., attorneys for the plaintiff Hansraj Tejmal in the first suit. That summons asked for a declaration that the applicants had a lien on the sum of Rs. 3.572-9-8 then in the hands of the Sheriff of Bombay as received by him in Suit No. 3104 of 1925, and that by reason of that lien the sheriff do pay the said sum to the applicants in priority to the attaching craditors Messrs. Jetha Davji & Co., the plaintiffs in suit No. 3104 of 1925. Mr. Ju3tic Mirza, dismissed the summons; The applicants, the attorneys, appeal.

2. The case raises a point of importance not only to the attorneys of this High Court, but also to the public, as the question turns on what is the exact right of attorneys in respect of what is generally described as a particular lien on funds recovered in a suit by their exertions. I will call Suit No. 1405 of 1922 the first suit, No. 3104 of 1925 the second suit. The applicants were attorneys for the plaintiffs in the first suit, and on September 3, 1925, there was a preliminary judgment in their clients' favour by which the defendants were ordered to pay the plaintiffs' costs of suit to date ; and the defendants' counter-claim was dismissed with costs. The plaintiffs' bill of the costs in the first suit was not taxed till September 13, 1926, on which date the taxingmaster made his allocatur awarding Rs. 3,572-9-8 to the plaintiff as party and party costs. On September 15, 1926, the plaintiffs' attorneys served that allocatur of the defendants.

3. I will now turn to the second suit, viz., No. 3104 of 1925. In that suit Jetha Davji & Co., whom I will call the attaching creditors, had obtained a decree on March 1, 1926, against Hansraj Tejmal, the plaintiffs in the first suit. Stopping there, it will be noticed that this decree was after the date of the preliminary decree in the first suit which presumably had been obtained partly by the exertions of the applicants. Then, on September 18, 1926, the attaching creditors asked in their own suit for execution, and they did so by asking that the Rs. 3,572,-9-8, payable for costs in the first suit, should be attached.

4. Accordingly, by an ex-parte order made by the Prothonotary on September 21, 1926, that decree in the first suit was attached under Order 21, Rule 53(1)(a) and the defendants in the first suit were directed to pay to the Sheriff of Bombay the above sum of Rs. 3,572-9-8 in order that it might be applied in satisfaction of the decree in the second suit. So far, the applicants had not made any application to the Court, but they had written to the defendants in the first suit on September 15, which was the same day as they served the allocatur and they then stated that unless the money was paid the next day, viz. on the 16th, they would issue execution. The reply of the defendants' solicitors on the 17th was that they were writing to their clients and in the meanwhile the applicants were asked not to issue execution as thereatened and incur unnecessary costs.

5. It was not apparently till September 24, 1926, that the applicants became aware of the ex-parte order made by the Prothonotary on September 21, in the second suit, nor that the defendants in the first suit had in consequence of that order paid the sum in question to the Sheriff of Bombay in the second suit, They got this notice by two letters from the defendants' solicitors, dated September 24 and 25, which are at p. 14 of the appeal paper-book. Having got this notice the solicitors at once applied in their own action for a charging order, viz. on Monday, September 27. Accordingly, on that same day an order was made by Mr. Justice Mirza declaring that the applicants had a charge on the above sum in the hands of the, Sheriff of Bombay and that it should not be paid to the plaintiffs in the second suit or otherwise dealt with without notice to the applicants.

6. On this same September 27, the applicants took out a summons in both the first and second suits for a declaration of lien and an order for payment, as I have already mentioned. That summons came on for hearing on October 8 in Chambers before the learned Judge. The course taken by the learned Judge appears to have been rather an unusual one. We understand from counsel that the point that in, Bombay solicitors have not got a lien such as existed in England at common law before the Solicitors Act 1860, was never even argued, and that the case was argued on the assumption that that lien, as it is called, existed. But the learned Judge in considering his judgment appears to have thought that that point was not settled law, and accordingly he proceeded to deal to some degree with the law on the point, and in particular with the judgment of Mr. Justice Taraporewala in Ved and Sopher v. Wagle and Co. A.I.R. 1925 Bom. 351.

7. Now that particular judgment was a reserved judgment of Mr. Justice Taraporewala reported in the authorized law reports. It was a case exactly in point, and it was a case which really followed the practice of this Court which had existed for a great number of years. I think, therefore, that Mr. Justice Mirza took an incorrect course in treating the matter as if it was still at large, and as if it was open to him to dissent from the judgment of Mr. Justice Taraporewala. The proper course, I think, for the learned Chamber Judge would have been to have followed that decision without expressing, if he liked any opinion of his own, and leaving it to the parties to appeal if they thought that that decision was wrong. That is the undoubted practice which prevails in the English Courts and the observations of Sir Lawrence Jenkins in Hafizaboo v. Mahomed Cassum [1906] 31 Bom 105 approving of a similar course taken by Mr. Justice Batty in the Court below, show incidentally that they should be adopted here, and for this very good reason. The English system of law and procedure is different from that obtaining in continental countries. One essential element of it is that the Courts should been themselves bound by decisions of Courts of co-ordinate jurisdiction and that it should not be left in cases precisely on all fours for judge A to decide points of law in one way and judge B in another. Think for a moment of the embarrassment that would be caused to the legal profession and to the litigating public if there was no such thing as a settled point of law, and if there could be no certainty as to what the decision on any point of law would be until after judgment had been given.

8. But passing from that, the ratin decidendi of the learned Judge seems to be largely based on the following two sentences:

In the absence of such a statute (Solicitors Act, 1860) an attorney is in no better position in respect of his right to costs against his client than would be an ordinary creditor of his client unless the property attached was in his hands and was recovered or preserved by him in the proceedings in which he had become entitled to costs against his client. Such possession would confer a right of lien for hi3 unpaid costs on the property and would be regarded as a notice to the attaching creditor of that lien.

And

Except by consent of the client who must be regarded as the owner of the property I am of opinion that the Court has no power to make a charging order upon property moveable or immovable unless it be in its own possession, e. g in the hands of a receiver. Property realized in execution proceedings by the Sheriff is also in a sense in the hands of the Court, but, different considerations would seem to apply to it.

9. As I read the learned Judge's, judgment, he has, with all respect, confused here the two different descriptions of lien which a solicitor may have, viz. first, a possessory lien by reason of certain property like title-deeds being in his hands, and secondly, a particular lien which does not depend on actual possession of the property, but which depends on entirely different principles. Those principles I will now proceed to state as briefly as I can.

10. In the first place it must be clearly understood that the rights and duties of attorney are in no way part of the indigenous law or practice in India. Their profession originates from England ; it grew up under the English common law and it is clear that it was the common law which governed their rights and duties in the King's Courts established by the Supreme Court Charter of 1823 to which Courts our present High Court is the successor.

11. We have recently in two important cases bad to consider in this Court the jurisdiction which we inherit from the Supreme Court. It is clear, as has already-been pointed out in Hirabai v. Dinshaw : AIR1927Bom22 and in the recent Special Bench ease of Hatimbhai v. Framroz Dinskow A.I.R. 1927 Bom. 278 that the jurisdiction of the Court of King's Bench in England and that of the Courts of equity in England were conferred upon the Supreme Court by inter alia, Clauses 5 and 36 of the Supreme Court Charter of 1823, counting those clauses from the operative part and neglecting the recitals.

12. Turning, then, first, to the English law, it is in my opinion accurately stated in Halsbary, Vol. 26, para. 1334, p. 814, viz:

A solicitor is entitled to three kinds of lien to protect his right to recover his costs from his client ; namely : (1) a passive or retaining lien; (2) a common law lien on property recovered or preserved by his efforts ; (3) a statutory lien enforceable by a. charging order.

13. The first of these liens seems to have been the one which the learned Judge had in his mind, viz., in effect a possessory lien. This corresponds to Section 171, Indian Contract Act. Passing that by and going next to the common law lien, this is thus described at p. 820, paras. 1342 and 1343:

A solicitor has at common law, and apart from any order of the Court or statute, a lien over property recovered or preserved or the proceeds of any judgments obtained for the client by his exertions. This lien is a particular lien ; it is not, therefore, available for the general balance of account between the solicitor and the client, but extends only to the costs of recovering or preserving the property in question including the costs of protecting the solicitor's right to such costs, and of estiblishing the lien. The lien does not attach to real property, but, with this excaption, it applies to property of every description...including costs ordered to be paid to the client.

14. In O. Brien v. Lewis [1863] 3 G.J 606 it was held by the Court of appeal that:

A solicitor's lien for his costs upon costs ordered to be paid to his client by the opposite party in a suit remains, notwithstanding such solicitor having ceased to be the client's solicitor in the suit, and notwithstanding that he has taken the client's body in execution under a judgment against him for the amount of the solicitor's costs.

15. The fact that the judgments in that case were delivered by those eminent Judges, Lord Justice Knight Bruce and Lord Justice Turner shows that the decision is of unquestionable authority.

16. Numerous other cases prior to. the Solicitors Act, 1860, were cited to us by' the learned Advocate General in his extremely lucid and careful argument. The earliest. I think, was in Welsh v. Hole [1779] 1 Dong. 237 a decision in the year 1779. Other decisions were Ex paite Moule : in re Dark [1821] 5 Mad. 462 Barker v. St. Quintin [1844] 12 M.W. 441; Sympson v. Prothero [1857] 26 L.J. 671 Ch ; and Eisdell v. Coingham [1859] 28 L.J. 213.

17. In 1860 the Solicitors Act came into force, and by Section 28 of that Act an attorney was given, inter alia, a lien upon real estate. As I have already pointed out, he did not possess a common law lien on real estate before, But not with standing that Act it became important in many cases to appreciate we ether the attorneys still had their common law lien irrespective of the rights conferred by the Solicitors Act. The learned Judge, as I read his judgment at page. 30, line 30, seems to have thought that this Act took away the pre-existing rights of the attorneys. This was not so.

18. And this brings me to consider certain cases which arose on the point as to what notice was sufficient to affect a third party with the equitable claim or lien of the solicitor. In Faithfull v. Ewen [1878] 7 Ch. 495, a decision of the Court of appeal, an attorney who claimed a lien had actually approved a mortgage in favour of other parties on the funds in question without specifically claiming that he was entitled to a lien in priority to that mortgage in respect of his own costs. It was held by the appellate Court that as the mortgagees had notice of the suit, they must be presumed to have known the rights of the solicitor of the plaintiffs, and that his charge ought not to be postponed to the mortgage, he not having been guilty of any misrepresentation or concealment. 20. Then, in Cole v. Eley [1894] 2 Q.B. 350, the plaintiff assigned to a third party a sum due under a decree. There was no proof that the third party had express notice of the solicitor's claim, but it was held by the Court of appeal that the assignee (the third party) being aware that the subject-matter of the assignment to him was money recovered in an action, in which the solicitor had acted for the plaintiff,' must be taken to have had notice of the solicitor's rights in respect of his costs, and, therefore, was not 'a purchaser, for value without notice' within the mean-ins of the Solicitors Act, 1860. There Lord Esher, M.R., said (p. 351):

It is unnecessary to go through all the cases cited. The case of Faithfull v. Ewen [1878] 7 Ch. 495 in this Court undoubtedly decided what Collins, J., in the Court below, said that it decided, viz. that notice that the subject-matter of the assignment is the subject-matter of a suit amounts to notice to the assignee of the existence of the solicitor's right to a lien. Such notice prevents an assignee from being a 'purchaser for value without notice.' I cannot see that any of the other cases cited are to the contrary of that decision, and several of them appear to support it. As long as that decision is not overruled, it stands as the law, and it appears to me to govern the present case. Therefore, the appeal must be dismissed.

19. Lord Justice Kay said (351):

When the purchaser took an assignment of the money recovered in the action, the charging order had not been made. Before the decision in Faithfull v. Ewen the question thus raised might be an arguable one ; but that case decides that, to defeat the assignment to the purchaser, it is not necessary that he should have notice of a charging order, but it is sufficient that he should know facts showing that the solicitor might be entitled to a lien.

20. Then, two other cases, viz., In re Born: Curnock v. Born [1900] 2 Ch. 433 and In re Meter Cabs, Limited [1911] 2 Ch. 557, show that this right of the solicitors is no new right, nor is it conferred for the first time by the Solicitors Act, 1860. It was held in In re Born that, as the charging order applied for in that case conferred no new right, but was only a cheap and speedy mode of enforcing the common law lien on the company's share of the fund in Court, which lien existed prior to the winding-up, the Court, in the exercise of its 'discretion under the statute, would make the order. There Mr. Justice Farwell says (p. 435):

It is also contended that, having regard to the winding-up, ought not now to give the applicants a charge under the statute. But though this application is under the statute, it is very material to consider whether, if I make a charging order, I am thereby giving the applicants a new right, or merely enabling them more cheaply and speedily to enforce, a right they already possess. Now, it is plain that they have a common law lien on the company's share of the fund in Court for the amount of their costs, It would be monstrous if this were not so, as the company would never have recovered the money without their exertions. It resembles the case of debenture-holders who have to allow a liquidator's costs when they take the benefit of his exertions, and it is clear that justice calls for such a lien. Now, this common law lien has not been abrogated by the statute Haymes v. Cooper: Cooper v. Jenkins [1864] 33 Beav. 431 or affected by the winding-up, and all I am really asked to do is to give the statutory charge in and of the already existing common law lien, which is prior to any right of the official receiver or liquidator.

21. In In re Meter Cabs, Limited [1911] 2 Ch. 557, a solicitor was employed by a company to establish a claim in an arbitration. Pending the arbitration the company went into liquidation, and, shortly after, the solicitor with the sanction of the liquidators compromised the claim for 29 which was paid to him and credited to the liquidators, It was held that as the 29 was recovered by the exertions of the solicitor in the arbitration he had a common law lien thereon for his costs of recovery, including the costs incurred prior to the liquidation. Mr. Justice Swinfen Eady (as he then was) said (p. 559):

It is clear that at common law a solicitor is entitled to a particular lien, which is capable of being actively enforced, on a fund or on the fruits of a judgment recovered by his exertions, for the costs of recovery, or those immediatery incidental thereto. In this case the proceedings were by arbitration, so that there is no question, of any statutory charge under the Solicitors Act, 1860 (23 & 21 Vict, c. 127), Section 28. Now the common law lien prevails notwithstanding the bankruptcy of the client. There are many authorities to this effect.

22. He then cited Guy v. Churchill [1887] 35. Ch. 489, where Lord Justice Cotton said (p. 491):

The lieu of a solicitor is grounded on the principle that it is not just that the client should get the benefit of the solicitor's labour without paying for it. Here the official receiver wishes to get the benefit of the solicitor's exertions by which the 298 7s. 1d. has been recovered without paying for them.

23. And Lord Justice Lindley said (p. 492):

I agree and have nothing to add. It is right that they who get the benefit of the recovery of money should bear the expense of recovering it.

24. Turning next to the law in India in my opinion, it is equally clear for, subject to any statute to the contrary, we should naturally follow the common law of England on this particular point. In Devkabai v. Jefferson, Bhaishankar and Dinsha [1886] 10 Bom. 248, this is clearly laid down by Sir Charles Sargent, He says (p. 253):

It is to be borne in mind that the solicitor's lien in the High Courts of India is governed exclusively by the law as it existed in English Courts before the pissing of 23 and 24 Vic., cap. 127 (the Solicitors Act 1860), by which that lien was very much extended, By that law the solicitor had a lien for his costs of any funds or sum of money recovered for, or which became payable Jo, his client in the suit.

25. It is true that in that particular case the alleged lien failed. But that was because it was held that the particular fund in question had not been recovered by the aid of the solicitors. Then, in In re Tyabji & Co. [1905] 7 Bom. L.R. 547, Mr. Justice Tyabji said (pp. 553-51):

As to the general jurisdiction of the Court, it does not seem to me that there can really be any doubt that the High Court now possesses the summary jurisdiction which is sought to be invoked. The solicitors and attorneys of this Court have always been regarded by the High Court as, in soma sense, officers of the Court, and, therefore, entitled to special protection for the payment of their costs.

26. Then, in A. Haji Ismail & Co. v. Rabiabai [1909] 11 Bom. L.R. 1062, Mr. Justice Macleod stated (p. 1063):

The rule at common law that a solicitor is entitled to a lien for his costs on property recovered or preserved by his exartious has always been followed by this Court.

27. Later, again, in Ved and Sopher v. Wagle & Co. A.I.R. 1925 Bom. 351, cames the decision of Mr. Justice Taraporewala which I referred to in the beginning of my judgment.

28. Turning next to the Calcutta authorities : they are to the like effect. One of the latest is Harnand Roy Foolchand v. Gootiram Bhultar [1919] 46 Cal. 1070, a decision of Mr. Justice Rankin, who states (pp. 1074-75):

Now, the lieu of an attorney for his costs upon property recovered or preserved is not only one of the oldest doctrines of law, but one which is based on very manifest justice, and the objection to the order that I am asked to make is that, although the law which prevails here recognizes the solicitor's lieu, I have no jurisdiction to make such an order as this because there is nothing in the Code or in the rules that enables ma to make a direct order for payment to the attorney.

29. Then, after considering that objection the learned Judge in fact made an order for that payment.

30. The older Calcutta authorities are to the like effect. I may refer in particular to Khetter Krislo Mitter v. Kalls Prosunno Ghose [1898] 25 Cal 887, where Sir Lawrence Jenkins, after stating the nature of the right with the conciseness and clearness which one generally finds, in his judgments, says, (p. 890):

These principles appear to me to be the clear result of the authorities in England; and founded as they are, on justice, equity and good conscience, I see no reason why they should not apply in this country.

31. Other cases in Calcutta where the principles have been applied are Supramanyan Setty v. Hurry Froo Mug [1887] 14 Cal 374, and Navab Nazim of Bengal v. Heeralall Seal [1873] 10 L.R. 444.

32. I next come to certain cases where it is said that a different view was arrived at in England. The first case is Hough v. Edwards [1856] 1 H.& N. 171. Bat when one comes to look to the facts in that case reported in the Law Journal, it will be found that there the solicitor put forwad two claims: first, for what he discribed as extra costs in a particular action ; and, secondly for business done in other matters. As regards the first claim, that was referred to the taxing mister, and it was disallowed. So that claim failed on the facts, for the solicitor had not incurred these costs. As regards the second claim that was for business not done in the suit. It was, therefore, for a general lien, and, as I have already stated, the solicitors' lien, which we are now dealing with, viz., their common law lien, does not extend to their general costs for all business done for their client, but only to co3ts in connexion with a particular suit in which the money has been recovered. Naturally, therefore, the Court in that case rejected the claim of the solicitors.

33. Then, in Shaw v. Neale [1858] 6 H.L.C. 581, it was held that a solicitor's lien did not extend over real estate. That is the only significance of that case. The mere use of the word 'estate' in the head-note and judgment may at first sight be ambiguous. But it is clear on looking at the facts that the estate there referred to was real estate and not personal estate.

34. Then, much reliance was placed on North v. Stewart [1890] 15 A.C. 452. Now, it must be borne clearly in mind that that was a case of Scotish Law. Scottish Law does not apply in England nor doe3 it apply in India. The question which their Lordships had to consider was whether tinder Scottish law such an arrestment, as it was called, was established on the facts as would found jurisdiction in the Scottish Courts to entertain the particular application which they had in fact entertained. Col. North in that case was the unsuccessful party in a suit brought against him by one Welsh in the English Courts, who recovered judgment with costs. And the real point in the case was whether the solicitor's lien for costs was of such a nature as to prevent the decree vesting in the person in whose favour it was made. It was held that the decree was after all the client's decree and not the solicitor's and therefore there was sufficient property in the decree-holder to found an arrestment so as to give the Scottish Court jurisdiction. Lord Watson, who was himself a Scottish law lord, states at the beginning of his judgment (page. 469):

I have seen no reason to doubt that the judgment appealed from is in accordance with Scotch law.

35. Lord Harschell acquiesced in this and in the coarse of his judgment he expressly states that the rights as between the solicitor and his opponent were in no way dealt with by the decision of the House, and that in particular the question whether the charging order obtained by the solicitor had a retrospective effect was expressly left open. The fact that certain passages in the judgments of Lord Halsbury and Lord Watson, if left unexplained by the context, might lead to some doubt, really becomes immaterial when one sees exactly what was the point for a decision before their Lordship3. That they ever, by that decision, intended to depart from the well-recognised principles attaching to a solicitor's lien, and that, moreover, without any citation of the leading authorities on the point, I do not for one moment believe.

36. There were two more cases which were cited by Mr. Maneksha. In Francis v. Francis [1854] 5 M. & G. 108, the solicitors claim was disallowed. But that was for this reason. A trustee in that case had committed a breach of trust by a wrongful investment of money. The solicitors, Messrs. Hichens, were fully aware of it. Consequently, although the fund that was improperly invested was afterwards realized, it was held that the solicitors could not claim any lien upon that fund in spite of any exertions of theirs in recovering it. I take it in effect that having notice of this breach of trust they were in no better position than their client who committed the breach of trust. Consequently, their rights would be postponed to those of the cestuique trust in the suit.

37. In Turner v. Letts [1855] 20 Beav. 185 the person who had employed the solicitor was a tenant for life, and had afterwards died It was held on the facts of that particular case that this tenant for life could not give as against the remainderman a valid lien in favour of her solicitor as regards-certain specific chattels, to wit, title deeds. Both these depend on their particular facts, and do in no way militate against the general principles of law.

38. Confronted, then, with this formidable line of authorities in England and India. it is not surprising that eventually the defendants' counsel was forced to concede the existence of the general propositions which are enunciated in those cases. But conceding that he contended first that it was not competent for the Court to make a charging order here in favour of the solicitors. Secondly, that even if the Coutt could, such order would not affect the rights of third parties acquired bona fide and without express notice of the solicitor's lien. And, thirdly, the-jurisdiction of the Court to enforce a solicitor's lien and to make a charging order is discretionary, and that on the facts of this particular case the Court was justified in refusing to exercise the discretion in favour of the solicitors and in referring them to a separate suit.

39. Now, as regards the first point as to the jurisdiction to make what is called for short a charging order : I think Mr. Maneksha is correct in thinking that the exact expression 'charge' is obtained from the actual wording of Section 28, Solicitors Act, 1860, and that that particular word is not an apt one to describe a solicitor's common law lien. But having regard to the lapse of time, one can well understand how our Court has come to adopt the form of summons in use now a days in England to enforce that right. And when one comes to consider what right a solicitor has, quite apart from the Act of 1860, to enforce his lien, it will be found that the matter becomes one of mere wording. Thus, in Halsbury, Vol. 26, p. 822, para. 1344, the law in, I think, accurately stated in dealing with the enforcement of a common law lien. It is stated:

By virtue of his lien the solicitor has a right to ask for the intervention of the Court for its protection whenever he finds, after recovering or preserving the property for the client, that there is a probability of the client depriving him of his costs. He is, therefore, entitled to apply to the Court for an injunction against his client, restraining the client from receiving payment without notice to himself, or, if the fund is in Court, for an order of payment there out of his costs. He may also give notice of his lien to the party liable to his client who thereupon becomes liable to the solicitor if he subsequently pays the client without regard to the solicitor's lien. If the money in respect of which the lien is claimed is already in the solicitor's hands, he may retain there out the amount of his costs and pay over the balance to the client.

40. Now, in the present case the charging order at page 21 of the paper-book which was made by Mr. Justice Mirza declared that the applicants should have a charge on the sum in question, and it was further ordered that that sum should not be paid to the plaintiffs in the second suit without notice to the appellants. The second part, therefore, of that order is precisely what is stated in the above passage from Halsbury, viz., that the money is not to be paid without notice to the client. But there is this exception in the present case that the form has been varied because the moneys had already been paid to the Sheriff of Bombay in the other suit, and therefore the order purported to direct that the money should not be paid to the plaintiffs in the other suit without notice to the solicitors.

41. This particular complication I would prefer to put on one side for a moment land to consider the matter from the point of view supposing the money had not been paid by the defendants in the first suit to the Sheriff of Bombay. That being so, I think there would clearly have been power in the Court to make an order restraining the plaintiffs from receiving payment without notice to the solicitors. Whether the particular form of order in use, which is taken from Seton, 7th Edn.; Vol. II, p. 1042, should? not be modified is a matter which had better be discussed in another place. But I take it that if the form of declaration was alterad to this effect that the applicants as the solicitors employed by the plaintiffs were entitled to an attorney's lien on a sum of &...directed to be paid by the defendants in the suit, and then followed an order that that sum should not be paid to the plaintiffs, or received by them without notice to the solicitors, then I take it that no valid objection, could be taken to that form of order. It is only the use of the word 'charge' which may create a misleading impression. As I have already said, that is taken from the Solicitors Act 1860 and that Act does not apply here. But it is quite wrong to argue that because that Act does not apply, that therefore the solicitors should get nothing at all.

42. I wish, however, to emphasize that this case does not depend on the effect of that charging order. Supposing it had not been made, we have yet to consider the summons of September 27, 1926, which was very prudently taken out in both suits, and which asked for a lien and payment to the solicitors of the sum in question. No technical objection can be taken to that particular summons, and therefore irrespective of whether the charging order was in precisely the correct form or not, it is to my mind clear that the first objection taken by the respondents' counsel cannot prevail, for the Court would have jurisdiction to make the order asked for by the summons seeing that the fund is still under its control in one of the two actions.

43. It was next said that the respondents were bona fide parties, who by their diligence had acquired this fund without notice of the solicitors' rights. It was frankly conceded and I think rightly conceded as it was bound to be that this question of notice was the crux, of the whole case. Now, in this connexion I do not shrink for one moment from stating positively that where a party attaches a decree, which directs payment of costs to the plaintiff, he has notice by that very fact that the plaintiff's solicitors may be entitled to an attorney's lien on that fund for the amount of their costs. In my judgment that would be clearly so, supposing the fund was a mere sum for damages. A fortiori this must be so where the fund, as here, consists solely of costs directed to be paid. Similarly if there was a fund in Court, the cases that I have already cited establish a similar proposition, to my mind, beyond question. I, therefore, need not deal with the cases which decide that the mere fact of there being a fund in Court is sufficient to give notice to the third party of the possibility of a solicitor being entitled to a lien for his costs. Really the respondents in the present case are very much like the Official Receiver in the case referred to by Lord Justice Cotton and Lord Justice Lindley in Guy v. Churchill [1779] 1 Dong. 237. They want to obtain this fund without paying, the person by whose exertion the fund was recovered.

44. I would, accordingly, hold that the respondents here had notice of the attorneys' common law lien when they attached the decree in question, and that accordingly their contention that they were bona fide holders without notice cannot prevail.

45. Further, as the fund is still under the control of the Court, viz., in the hands of the Sheriff, there is no difficulty in doing justice and equity in this case. If once the fund had left the control of the Court, different considerations might arise, as to which I say nothing. But the circumstance whether the fund is in the one suit or whether it is in the other ought not in my judgment to interfere with the rights of the attorneys in the present case, In this connexion I would observe that the respondents have succeeded in getting this fund paid into their own suit without giving any notice to the attorneys of what was proposed to be done. I do not say that they were not strictly entitled to do so under the existing practice. The Advocate General raises no objection to the exparte order which the Prothonotary actually made. I only say that that order, was made without the party really affected. viz., the solicitors, ever having been heard! Therefore, that is an additional reason why we should decline to part with the money, if, after hearing them we think that the solicitors were prima facie entitled to be paid their dues.

46. That brings me to the third point argued, viz.. that the power of the Court to enforce a solicitor's lien is a discretionary one, and that the learned Judge was right in refusing in the present case to exercise it in favour of the attorneys. In my judgment, however, this is a particularly clear and simple case for enforcing the solicitors' lien. I am further of opinion that there is nothing substantial in the contention that the parties ought to be left to a separate suit. That contention is really founded on this, that in the affidavit in support of their application the attorneys contended that there had been fraud and collusion between the defendants in the first suit and the attaching creditors. If that contention had been persisted in, I can well understand that the parties must have been left to a separate suit. Charges of fraud and collusion cannot be decided on a summons in chambers But in fact the attorneys did not persist in that claim before the Chamber Judge and the learned Judge really gave his decision on what he conceived to be the legal rights of the attorneys.

47. I appreciate that some difficulty has arisen because, having decided that in effect the attorneys had no legal rights, the Judge then gave liberty to the attorneys to establish their charges of collusion and fraud, if they so wished, in a separate suit. And he put them on terms to begin that suit within a short space of time. They were, therefore forced to bring that suit but exactly what the nature of the suit was to be is not altogether clear from the judgment. It would be no use bringing a suit merely on charges of collusion and fraud unless, some relief was to be obtained as a result of it. If it was a common law action1 for fraud claiming damages, I could follow it. But if the action was also to establish their common law lien, then surely they would have been met at once by the judgment on the present summons, and it would have been said that the matter was res judicata. But I need not go further into that.

48. It follows, from what I have already stated, that in my judgment the learned Judge's order was erroneous and cannot be supported. In saying this, I have not the smallest doubt that if instead hearing this ease in chambers, and then giving judgment on a point, which we are told was never contested by the respondents, viz., as to the existence in Bombay of a solicitor's common law lien, the learned Judge had adjourned the case into Court and had had the benefit of the arguments that have been addressed to us, he would have arrived at identically the same conclusion that we have arrived at because the law on the point is to my mind overwhelmingly clear and leaves no room for doubt. Our judgment merely establishes what has been the law and practice for over one hundred years in India, and in England for even longer period.

49. In connexion with counsel's arguments I should like to say that Mr. Maneksha's able argument on behalf of the respondents has been of no less assistance to us because in the result it was unsuccessful, and that we particularly appreciate the way in which ho conceded points which were really inarguable, and concentrated his argument on points which he could fairly ask the Court to consider. That reminds me that there was one point of his based on Section 73, Civil P. C, which I had intended to notice. In my opinion that section does not apply, because here the solicitors were not, and could not be, attaching creditors. They had no decree in their favour. What they had, as I have already pointed out, was an attorney's lien. Therefore, there was no question of their coming under that section, or of there being any rateable distribution or otherwise. It has already been pointed out in other cases that we have to construe strictly the terms of that section in any particular ease.

50. As regards costs, Mr. Maneksha pleaded that his clients were fighting in the interests of the public, and that moreover the judgment in the Court below was largely based on contentions which in fact their counsel never advanced, , But there is also the point of view of the attorneys to be considered. It would be quite wrong for anybody to form the view that an attorney's lien is opposed to the true interests of the public. On the contrary, in my opinion it is in the interests of the public that that lien should exist. A somewhat similar lien is given by the legislature to pleaders under Section 30(b), Bombay Pleaders Act, 1920. It is also quite impracticable for us to accede to the argument that the respondents should not pay the costs of the appeal because the judgment in the Court below was erroneous.

51. In these circumstances, I would allow the appeal, and set aside the order of the learned Judge, and make an order in the terms of the summons of 27th September 1926, and direct the respondents to pay the costs of this appeal and in the Court below. There will further be a direction that these costs are to be added to the amount for which the solicitors are entitled to a. lien.

Blackwell, J.

52. I am of the same opinion. This Court has, as long ago as 1886 in Devkabaiy. Jefferson, Bhaishankar and Dinsha [1821] 5 Mad 462, laid down the law as regards the solicitor's lien in a case of this kind. At page 253 Sir Charles Sargent pointed out in a passage, to which the learned Chief Justice has referred, that the solicitor's lien in the High Courts of India is governed exclusively by the law as it existed in England before the passing of the Solicitors Act, I860, and that the solicitor had a lien for his cost on any funds or sum of money recovered for, or which became payable to, hi3 client in the suit.

53. A solicitor's common law lien must not be confused with a solicitor's possessory lien, The common law lien is, in my opinion, accurately defined in Halsbury's Laws of England, Vol. 26. Sections 1342 and 1343, pp. 820-1, to which the learned Chief Justice has referred. Authorities for the proposition that it includes costs ordered to be paid to the plaintiff are, among others, Ex-parte Bryant [1815] 1 Mad. 49 and O'Brien v. Lewis [1863] 3 J. 606. The mode of enforcing a lien is also dealt with, I think, accurately, in Section 1344 of the same volume of Halsbury, to which the learned Chief Justice has also referred.

54. I think it is clear that, so long as the Court has control over the funds, the lien is not liable to be defeated by a third party, 'such as the assignee of a decree or an attaching creditor, of the solicitor's client, even though the third party had no express notice of the lien. This seems to me to be plain from the decision in Cole Eley [1894] 2 Q.B. 180. At the bottom of page 183, Mr. Justice Charles said:

It is clear in the present case that Bead had notice of the solicitor's right to a lien. It may be that ha had no express notice, but the question is whether he was in the position of a person who had actual notice that the right to a lien existed. In my opinion the authorities are decisive that ha had notice, for he knew that he was buying a judgment debt. Suppose this had been the case of a fund in Court. It is plain that in such a case the assignee would be treated as having notice.

55. Then Mr. Justice Charles referred to the judgment of Sir John Romilly, M.R. in Haymes v. Cooper : Cooper v. Jenkins [1864] 33 Beav. 431 and he went on to say that the Master of the Rolls Share treated the fact of there being a fund in Court as amounting to notice of the existence of the solicitor's, lien. He, then, referred to the decision of the Court of appeal in Faith full v. Ewen [1878] 7 Ch. 495 and expressed the opinion that the same considerations apply to the case of a judgment debt. The decision of the Court of appeal in Cole v. Eley [1894] 2 Q.B. 350 is to the same effect. It follows in my judgment from this decision that any person attaching a decree, whether for a sum of money or for costs, attaches it subject to a lien of the solicitor by whose efforts the decree has been obtained.

56. The authorities relied upon by Mr. Maneksha in his able argument do not, in my opinion, assist him. Hough v. Edwards [1856] 1 H.& N. 171 really was a case dealing with the solicitor's general lien. It was not a case of a particular lien sought to be exercised by a solicitor over a fund obtained or preserved by him in a particular suit. Therefore, it has no application to a case of this description.

57. Shaw v. Neale [1858] 6 H.L.C. 581 was a case which dealt only with the question of lien in regard to real estate, and that also in my judgment has no application to the present case.

58. As regards North v. Stewart [1890] 15 A.C. 452, which was strongly relied upon by Mr. Maneksha, that case, when examined, merely laid down this, that a solicitor's lien upon costs decreed does not prevent an attachment by other persons having claims. That principle was not disputed by the Advocate-General in this case. But North v. Stewart [1890] 15 A.C. 452 did not decide any question, of priority, or deal with what the position would be if a solicitor having a lien ought to enforce by the assistance of the Court his lien in priority to an attaching creditor.

59. In this Court a question similar to the one now before us was decided by Mr. Justice Taraporewala in Ved & Sopher v. Wagle & Co. A.I.R. 1925 Bom. 351. The head-note of that case is as follows:

W & Co. having obtained a decree in. a suit filed against NH, the decree was attached by their own judgment creditors V and S.A W &Co.; in that solicitors who had acted for W & Co. in that suit and in certain partnership litigation obtained charging orders for their costs against the same decree.

On a question arising as to the rights of the parties claiming to be entitled to the sums paid to the Sheriff in execution.

Held : that the solicitors were entitled to enforce their lien in priority to the attaching creditors, so long as the moneys attached remained within the jurisdiction of the Court.

60. Mr. Justice Taraporewala in an exhaustive judgment, after reviewing the authorities, many of which have been relied on by Mr. Maneksha in this case, said with regard to the case of North v. Stewart [1890] 15 A.C. 452:

But it does not follow from these observations (that is the observations of Lord Watson in that case) that once the property is attached by others, the lien of the solicitor comes to an end. I he judgments of the other Lords clearly show-that their whole attention was given to the point whether the attachment in the first instance could be levied or not and not as to the effect of the attachment if the solicitor claimed to exercise his lien as against the moneys so attached For that the decision in Shippey v. Grey [1880] 49 L.J.C.P. 524 is quite clear. This decision is later in date than the decision in Hough v. Edwards [1856] 1 H. 171 and Mercer v. Graves [1872] 7 Q.B. 499 referred to by Lord Watson in North v. Stewart [1890] 15 A.C. 452, and in my opinion Shippey v. Grey [1880] 49 L.J. C.P. 524 lays down the correct principle and is in no wav in conflict with the decision of the House of Lords in North v. Stewart [1890] 15 A.C. 452.

61. I think Mr. Justice Taraporewala's decision accurately lays down the law applicable to a ease of this kind and I respectfully agree with him.

62. Further, I respectfully agree with the learned Chief Justice in his observations upon the use of the word 'charge.' I also think that it is not a very apt expression having regard to the fact that the Solicitors Act, 1860, does not apply in India. It is claimed, however, that the Court can declare that an attorney has a lien on money in Court, and that is what the summons in this case at page 1 of the paper book asked the Court to do. Quite apart from the charging order which was made, the fund was still under control of the Court. That being so, the Court could, in my opinion, give effect to the attorneys' lien as asked in the summons above referred to. I think it is clear that the attaching creditors in this case, from the very fact that they were attaching the decree for costs, had notice o the attorneys' lien, and that the Court in such circumstances ought, if satisfied that such lien exists, to give effect to it, the fund still being within the control of the Court.


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