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A. Srikantaiah Vs. Bansilal Abirchand and anr. - Court Judgment

LegalCrystal Citation
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 377 of 1950-51
Reported inAIR1952Kant141; AIR1952Mys141
ActsCode of Civil Procedure (CPC), 1908 - Sections 20 - Order 3, Rule 4; Provincial Insolvency Act, 1920 - Sections 61; Legal Practitioners Act; Solicitors Act, 1860
AppellantA. Srikantaiah
RespondentBansilal Abirchand and anr.
Appellant AdvocateA.R. Somanatha Iyer, Adv.
Respondent AdvocateK. Nanjundiah, Adv.
(a) the case discussed about the lien for fees by a solicitor on his client, in respect of rule 4 of order 3 of the civil procedure code, 1908. (b) the case focused on the nature of funds against which the lien had been claimed, and whether they were within the jurisdiction of the court, in which the petition was filed, within the framework of rule 4 of order 3, along with section 20 of the civil procedure code, 1908. (c) the case discussed over the issue of lien for fees by the advocate under rule 4, order 3 of the civil procedure code, 1908, taking into account the costs earned by the solicitor in a proceeding under section 61 of the provincial insolvency act, 1920 - the court established that in the circumstances of the case, lien of the advocate had to be postponed to the direct the official receiver for payment of rs. 3000/-to him being the fees stipulated by his client for defending him in the insolvency proceedings. the basis of his claim as stated in the petition is that the said gulam ahmed had agreed to pay a fee of rs. 3000/- and accordingly in january 1948, the said gulam ahmed delivered a cheque on the bank of mysore, ltd. for rs. 3000/- towards his fee and the cheque remained uncashed, that after the petition was dismissed on 10-1-1949 a fresh cheque for a similar amount was issued in renewal of the earlier cheque and that the second cheque could not be cashed as the assets of the alleged insolvent were not handed over to him by the official receiver as directed by the court. he therefore prayed that as there was no other means of.....

Balakrishnayya, J.

1. The petitioner is an Advocate of this court who defended respondent 2, one Gulam Ahmed, against whom a creditor's petition in insolvency was filed before the District Judge, Civil Station, Bangalore, in I. P. No. I of 1348. The insolvency petition was dismissed on 10-1-1949 with costs and the Advocate's fee was fixed at Rs. 25/-. On 24-10-1949, the petitioner prayed for the intervention of the District Court under the summary jurisdiction to direct the Official Receiver for payment of Rs. 3000/-to him being the fees stipulated by his client for defending him in the insolvency proceedings. The basis of his claim as stated in the petition is that the said Gulam Ahmed had agreed to pay a fee of Rs. 3000/- and accordingly in January 1948, the said Gulam Ahmed delivered a cheque on the Bank of Mysore, Ltd. for Rs. 3000/- towards his fee and the cheque remained uncashed, that after the petition was dismissed on 10-1-1949 a fresh cheque for a similar amount was issued in renewal of the earlier cheque and that the second cheque could not be cashed as the assets of the alleged insolvent were not handed over to him by the Official Receiver as directed by the Court. He therefore prayed that as there was no other means of recovering the fee his claim should be given a priority by way of a lawyer's lien over the assets of the alleged insolvent which are within jurisdiction of the Court in preference to other attaching creditors. The learned District Judge disallowed the claim and dismissed the petition. This revision petition is preferred against that order.

2. Both the cheques referred to in the petition and alleged to have been issued in fa your of the petitioner by his client in January 1948 and January 1949 were not produced into Court. His client, Gulani Ahmed, however, in an affidavit filed by him admitted the agreement with his Advocate and supported the theory of having issued the two cheques on the Bank of Mysore. The contesting respondent is the Bank of Mysore. They contended in their statement that the said Gulam Ahmed was a merchant and had obtained advances from the Bank for his business. The goods that were sold by the Official Receiver were pledged by the said Gulam Ahmed as a collateral security. The Bank obtained a decree which amounted to Rs. 9300/-. During the pendency of the insolvency proceedings, the Official Receiver was directed to take charge of the goods pledged and tho Official Receiver obtained the goods which were in possession of the Bank and sold the same with the help of the alleged insolvent. The Official Receiver has reported that after deducting the miscellaneous charges and the payment at the rate of Rs. 125/- per mensem to the alleged insolvent (respondent 2) according to the direction of the Court, a sum of Rs. 4237-1-9 was available with him. On 10-1-1919, the Insolvency Court is said to have directed the Official Receiver to hand over the assets to Gulam Ahmed who affirms in his affidavit that he took charge of the goods from the Official Receiver but that the cash amount was not handed over to him. In the meantime, on 11-1-1949, the cash amount in the hands of the Official Receiver was attached by the creditors of Gulam Ahmed.

3. It is contended on behalf of the petitioner that he possesses a lien for his fees on the funds in the Court and that the claim of the Advocate baa a priority over the claims of theattaching creditors inasmuch as the funds atthe credit of the alleged insolvent in the Court.were recovered and preserved by the exertionsof the Advocate. The respondent opposed theclaim and stated that the petition is collusiveand filed to defraud the honest creditors andthat, at all events, the claim is unconscionableand excessively high and contrary to the LetPractitioners Act and also the Civil Rules orPractice and Circular Orders of this High Courtin the matter of taxing costs.

4. The claim of the petitioner is sought to be supported by reliance upon the common law in England which has been followed by some of the Indian Courts. 1 am of opinion that an Advocate or a pleader in this State cannot claim a lien for his costs, much less request the intervention of the Court to enforce such lien on the summary side. In English Law a solicitor has what is commonly known as a 'par-ticular lien' and a right to ask the Court to direct that personal property under judgment obtained by his exertions stand as security for his costs of such recovery. The 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 his client is personally liable, including the costs of recovering the remuneration by action or upon a taxation. The lien is, however, available against all persons claiming through but having no right higher than the client, and thus is available against his personal representatives, or trustee in bankruptcy (Vide Halsbury Laws of England Vol. 31 (II Edn.) pages 238 to 243).

In -- 'Re. Taylor', Stileman and Underwood', (1891) 1 Ch. 590 a firm of solicitors received for some years on behalf of a lady income payable to her under the trusts of a will, & from time to time made advances to her and payments on her account. On being applied to for delivery up of her papers, the solicitors sent in an account of their receipts and payments showing a balance of 81 due to them and claimed a Hen for that sum. The only item in the account of such a nature that the Taxing Master could have moderated it was 'our costs to date 20'. It was held by the appellate Court that a solicitor's lien extended only to his taxable costs, charges and expenses which category includes all disbursements which can be moderated by the Taxing Master and are not necessarily allowed in full on being vouched and that therefore there was no lien for anything more than so much of 20 as should be allowed on taxation.

In India where the system of solicitors is in vogue and attorneys are appointed, the principle of English common law is followed in recognising the solicitor's lien. Where a decree awarding costs was subsequently compromised by the parties without providing for attorney's costs, it was held by the High Court of Calcutta in -- 'Khetter Kristo v. Kally Prosunno's 25 Cal 887 that the parties could not deprive the attorney of his lien towards costs due. Following the said case, Rankin J. laid down in -- 'Harnandroy Foolchand v. Gootiram Bhut tar', 46 Cal 1070, that the Court has jurisdiction to enforce the solicitor's lien by making a direct order for payment of costs awarded to the solicitor by the opposite party. The principle adopted by the English Courts that money which was earned by the act of a solicitor, unless something has occurred to takeway his right, he is entitled to in law and equity and the moneys so earned might not be paid away to anyone without his costs being reserved so long as the funds are within the jurisdiction of the Court has been followed by Indian Courts. Vide -- 'Ved & Sophor v. R. P. Wagle & Co.', AIR 1925 Bom 351 and -- 'Tyabji Darpbhai & Co. v. Jetha Devji & Co.' : AIR1927Bom542 .

It is also considered that such lien is not able to be defeated by a third party such as assignee or an attaching creditor, even though the third person had no express notice ( : AIR1927Bom542 and -- 'Ghulam Moideen Sahib v. Md. Oomer Sahib', AIR 1931 Mad 183.) The trend of these decisions is to the effect that solicitor or attorney has no general lien for all the moneys claimed by him, but has a right in law and equity to get the aid of the Court on the summary side to enforce what is known as a particular lien for costs awarded or costs due, and such lien has a priority over the assignee of a decree or an attaching creditor unless something has occurred to take away that right. The lien could be enforced so long as the funds are within the control and jurisdiction of the Court.

5. It is clear from the decisions that the Hen of a solicitor extends only to taxed or taxable costs in England. It is left to the discretion of the Taxing Master to allow or moderate the claim, but the Taxing Master is not bound to allow whatever amount the solicitor claims. In India the lien is applied to costs awarded by the Courts. In the Courts of this State the fee due to an Advocate is regulated by the Civil Rules of practice and the Court which decides the case has discretion to allow costs fixing the fee due to the legal practitioners. The Advocate's, fee fixed in this case is Rs. 25/-. The lien if any should be confined to costs. The claim of Rs. 3000/- based on .an agreement with the client cannot be enforced as a Hen in the summary jurisdiction of the Court.

6. It is urged by the respondent that the Insolvency Court has become 'functus officio' after the termination of the Insolvency proceedings on 10-1-1949; and by the time of the application made by the Advocate on 24-10-49, the funds had been by attachment transferred to the executing Court. As against this, the petitioner contended that the same Court has control over the funds. The ordinary original jurisdiction of the Court is certainly distinct from the Insolvency jurisdiction which is specially vested. The contention that the funds against which the lien is claimed are not within the jurisdiction and control of the Insolvency Court in which the petition is filed should be uppheld.

7. It is next contended by the respondent but the fund in the Court is neither acquired for preserved by the act of the lawyer. The fund deposited into the Court by the Receiver in insolvency represents the sale proceeds of theimmoveable property of the insolvent pledged in your of the Bank. The fund forms the property preserved by the Receiver on account of e attacks of the Advocate against the creditor-petitioner. The funds therefore cannot be characterised as the property recovered or preserved by the exertions of the Advocate in the conduct of the case. Further, the learned counsel for the respondent Bank contended that his client being a secured creditor has a prior Hen andany claim of the Advocate should be restricted to the costs awarded and cannot be charged against the corpus of the property brought into by consent of the respondent to the Insolvency Court. It is not denied that the money in the hands of the Official Receiver was in fact the sale proceeds of the moveable property pledged to the Bank; but the petitioner relying upon the observation in -- 'Tyabji Dayabhai & Co. v. Jetha Devji & Co' : AIR1927Bom542 argued that a solicitor can enforce his lien even against a secured creditor. Following is the passage relied upon.

'In -- 'Faithfull v. Ewan', (1878) 7 Ch. D. 495, a decision of the Court of Appeal, an attorney who claimed a lien had actually approved a mortgage in fa your 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.'

In that case a lien for posts had been earned earlier to the mortgage and the mortgagees were said to have had notice on the principles that the costs earned in respect of the property mortgaged affirmed the charge and the mortgagees obtained the security only subject to the costs of the solicitor. In the present case the position is reverse. The Advocate had notice of the prior charge in fa your of the Bank earlier to the Insolvency proceedings in which he earned his costs. His lien if any has to be postponed to the prior charge. The decision relied upon by the petitioner as being in his fa your does not therefore help him.

8. One another aspect for consideration is whether the lien subsists in the circumstances of the case. Admittedly the Advocate has taken a cheque on the Bank of Mysore for Rs. 3000/-in January 1948, which is said to have been renewed in January 1949. By such act of taking security for his fees, the Advocate has abandoned the lien if any. This principle has been supported by the following cases. In -- 'In re Tay-lor, Stileman & Underwood', (1891) 1 Ch. 590, it was found that the solicitor had taken a pro-note payable on demand as security for costs due to him. It was held that 'prima facie' where a solicitor whose duty it is to advise his client as to his rights and liabilities takes from his client a security for costs without explaining that he intends to reserve his lien, the lien is abandoned. Cornish J. in -- 'Krishna-machariar v. Official Assignee of Madras', AIR 1932 Mad 256 observes that

'it appears that the appellant took a promissory note for Rs. 3000/- as security for his costs in the probate litigation. There is therefore no ground for holding that the appellant had a lien.'

9. What remains for consideration is whether an Advocate of this Court could be considered to have the rights similar to a solicitor or an attorney. In this state, there is no system of solicitors or attorneys. Instead, there are Advocates and Pleaders who do the entire legal work. There is neither law nor any rule governing the Advocate's lien for costs on the analogy of Solicitors Act of 1860. In a similarcase before the High Court of Madras -- 'Krish-namachariar v. Official Assignee of Madras', AIR 1932 Mad 256, Beasely C. J. and Cornish J. observed that

'there is no enactment in this country recognising the particular lien for costs which is sanctioned by the Solicitors Act of 1860, in fa your of a solicitor upon property recovered by his exertions for a client though it has been held that solicitors who have been admitted as attorneys of an Indian High Court have this lien. But the appellant is an Advocate and not a solicitor or attorney and the only possible ground for supporting a claim to such a lien in his fa your would be an express agreement by his client to that effect.'

In a recent case Chagla J. (as he then was) laid down that

'Primarily the solicitor should look to his own client for costs. There is no reason in principle or equity why, because a solicitor has not taken precaution to take proper advances from his client, he should compel a party topay his costs who has to recover from, the other party more than he was to pay to him.' Vide -- 'Rustomji & Ginwala In re', AIR 1942 Bom 102.

10. The petitioner is an Advocate of this Court and the observations quoted above aptly apply to the circumstances of the present case. The petitioner had obtained a cheque from his client, as advance towards his fee and he should look to his client for reimbursement; he has no lien or any other right to compel the respondent to release his secured debt in his favour. If an agreement between himself and his client should subsist it must be enforced in a properly framed sujt. Viewed from any stand point, the petitioner has no lien to enforce in the circumstances of the present case.

11. In confirming the order of the learnedDistrict Judge, this petition is dismissed, partiesbearing their own costs of this petition.

12. Petition dismissed.

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