1. This is an application for payment to the petitioner of a sum of Rs. 1500 now lying in the hands of an attorney who acted for the defendant in a suit in which the petitioner is the plaintiff. It is opposed by the attorney who claims a lien for his costs on the sum in question. The relevant facts are as follows: The petitioner instituted a suit on 17th August 1939 for recovery of a sum of Rs. 3694-11-0 on a signed adjustment of account. In that suit on 18th August 1989, he applied for attachment before judgment of a decree which the defendant had obtained against one Prahladram on 8th August 1939, in suit NO. 1000 of 1938. On that date Mc Nair J. made an interim Order on the application restraining the defendant from withdrawing the sum of Rs. 3694-11-0 out of the decretal amount in suit No. 1000 of 1938 by execution or otherwise. Then, on 31st August 1939 Mc Nair J. made the following order:
Without prejudice to the contention of the parties, application adjourned after the vacation. Interim Order discharged on the defendant's undertaking to deposit with his attorney Mr. M. G. Poddar Rs. 3700 (Rupees three thousand and seven hundred only); if money is realised in execution of the decree or otherwise on account of the decree obtained by the defendant in suit No. 1000 of 1938 to be held by Mr. M. G. Poddar subject to further Order on this application.
2. It is clear that the interim Order was discharged, upon the defendant undertaking to deposit with his attorney Mr. M. G. Poddar a sum of Rs. 3700 out of moneys to be realised by him in execution of the decree in suit No. 1000 of 1938, which sum was to be held by Mr. Poddar subject to further orders on the application. On 1st September 1939, a sum of Rs. 1500 was realised by the defendant in terms of a settlement arrived at between him and Prahladram, the defendant in suit No. 1000 of 1938, and this amount came into the hands of Mr. Poddar on that date. On 3rd June 1941 the plaintiff's attorney Mr. S.K. Dutt wrote to the defendant's attorney Mr. Poddar to enquire if the defendant had realised any further sum in execution of his decree in suit No. 1000 of 1938. In reply to this letter Mr. Poddar took up the attitude that the plaintiff had abandoned his application inasmuch as he had never brought it to final hearing after the long vacation of 1939, and he claimed that he was entitled to appropriate the sum of Rs. 1800 realised in execution of the defendant's decree in suit No. 1000 of 1938 towards his costs. The plaintiff's suit was finally disposed of on 10th June 1942 by Gentle J. who granted the plaintiff a decree for Rupees 4272-12-6 with interest at 6 per cent. With regard to the sum of Rupees 1500 held by Mr. Poddar, Gentle J. made an Order in the following terms:
No Order in respect of the monies in the hands of Mr. M. G. Poddar, attorney for the defendant, which he holds pursuant to the agreed Order of 31st August 1939, upon Mr. Poddar undertaking to continue to hold the monies in his hands for one month, and if within that time a substantive application is issued and served by the plaintiff in respect of that money to continue to hold it until further Order of the Court.
3. On 9th July 1942, the plaintiff took out the present summons on the defendant as also on his attorney Mr. Poddar for an Order for payment to the plaintiff of the aforesaid sum of Rs. 1500 and any other moneys that have been realised or may hereafter be realised in execution of the defendant's decree in suit No. 1000 of 1938. Along with his affidavit in support of the summons the plaintiff presented a tabular statement under Order 21, Rule 11 and there can be no doubt that he is now seeking to realise this sum of Rs. 1500 which is in the hands of the defendant's attorney by way of execution of the decree which he obtained from Gentle J. in his suit against the defendant. The application is resisted by the judgment-debtor Gajanand's attorney Mr. Poddar who claims a lien on these moneys for costs incurred by him in suit No. 1000 of 1938 (Gajanand Panday v. Prahladram).
4. This matter is of importance to attorneys and has been argued at some length. The learned Senior Standing Counsel, who appears for Mr. Poddar, has opposed this application on two grounds, firstly, that the Order of Mc Nair J. has spent itself and is no longer binding, and, secondly, that in any event the attorney's lien has priority over the claim of the plaintiff to money of the defendant in the attorney's hands.
5. In support of the first point it has been argued that the proceeding in which Mc Nair J. made the Order of 31st August 1939, was an application for attachment before judgment presented by the plaintiff on 18th August 1939, and it was not finally disposed of by any order. But that application no longer lies, because judgment has been delivered in the applicant's suit by Gentle J. on 10th June 1942. The duration of the Order of 31st August 1939 has to be determined by the character of the proceeding in which it was made and by the terms of the Order itself. The Order was made 'subject to further orders on this application,' and the application was adjourned till after the vacation. Thereafter the application was never brought up, in fact nothing was done before judgment in the suit was delivered on 10th June 1942, and that judgment having disposed of the suit itself the Order of Mc Nair J., which was an interlocutory order, must be deemed to have spent itself or to have been thereby superseded.
6. It has to be conceded that the present application is one for the execution of the decree. It must also be conceded that the original application of 18th August 1939, was adjourned and that no Order subsequent to the Order of 31st August 1939, was passed upon it while the matter was in the interlocutory stage. But it does not follow that the present application is not maintainable, or that the Order of 31st August 1939, has spent its force or stands superseded. That Order was mentioned before Gentle J. on 10th June 1942, after he had delivered judgment in the suit, whereupon he gave the direction already quoted above. It amounted to a recognition of the fact that the attorney was holding the money pursuant to the Order of 3lst August 1939, and a continuation of the status quo in respect of the money for a further period of one month, within which time a fresh application might be presented. The character of the attorney's possession was in no way altered. The present application is a fresh application, and it has been made within a month of Gentle J.'s order. I see no reason for holding that on this application the applicant's claim to the money in the hands of the attorney may not be maintained, or that the judgment in the suit had the effect of vacating the Order of 31st August 1989. This disposes of the first point taken by the learned Senior Standing Counsel.
7. His second contention is as follows: The money came to be held by the attorney under the agreed Order of 31st August 1939. That Order was that the money was to be held subject to further orders on the plaintiff's application for attachment before judgment which was being adjourned. No attachment was directed. The defendant was not ordered to furnish security. It was not said that the money was to be held by the attorney freed of his lien for costs. Moreover, the money did not come into the hands of the attorney by virtue of this order. So far as that was concerned Mc Nair J. was merely recording an agreement that the defendant would deposit with Mr. Poddar a sum of Rs. 3700 if money was realised in execution or otherwise on account of the decree which the defendant had obtained in his suit No. 1000 of 1938 against Prahladram. The making of the deposit with the attorney was conditional on money being realised by the defendant from Gajanand. Actually the money was realised on the following day, but it was realised through the exertions of the attorney in the course of the proceedings in execution of the defendant's decree against Prahladram in suit No. 1000 of 1938. It is the defendant's money in the attorney's hands obtained by the diligence of the latter. It is therefore subject to what is known as the attorney's particular lien at common law.
8. In support of this line of reasoning the learned Senior Standing Counsel has cited Halsbury's Laws of England, vol. 31, Articles 264 and 271, in which the rules relating to a solicitor's liens at common law over the property of his client are stated. The kind of lien invoked is described in Article 271:
A solicitor has at common law, apart from Statute, a lien, which may be actively enforced, over a fund or the proceeds of a judgment recovered for the client in the course of litigation or arbitration by the solicitor's 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 the proceedings in which the property is recovered ....
9. The learned Senior Standing Counsel has relied upon a number of decisions which relate to the application of this Rule in India, in which the solicitor's lien was given effect to, and in which it was stated that this subject is governed by the law as it existed in England before the passing of 23 and 24 Vic.,Chap. 127 (The Solicitors Act, 1860). Ved and Sopher v. R. P. Wagle and Co. ('25) 12 A.I.R. 1925 Bom. 351 was a case in which the plaintiffs, in a suit in which they had obtained a decree, attached in execution thereof a decree which the defendants had obtained in another suit against a third party. Thereafter the solicitors of the defendants obtained charging orders for their costs over moneys paid to the Sheriff as a result of the execution proceedings. It was held that the solicitors were entitled to enforce their lien in priority to the attaching judgment creditor. In Tyabji Dayabhai and Co. v. Jetha Devji and Co. : AIR1927Bom542 the relevant facts were similar to those in the last mentioned case, except that the decree obtained by the defendants was a decree for costs. The decision in Ved and Sopher v. R. P. Wagle and Co. ('25) 12 A.I.R. 1925 Bom. 351 was approved.
10. Harnandroy Foolohand v. Gootiram Bhuttar ('20) 7 A.I.R. 1920 Cal. 122 was a decision on an applica. tion by the solicitor of the defendant in a suit in which certain costs had been awarded to his client against the plaintiff. It was held that the solicitor's lien for his costs could be dealt with in a summary proceeding, and that though the power was discretionary, it ought, in the circumstances of that case, to be exercised in favour of the solicitor and against the plaintiff. In Hari Das Datta v. Kalu Ram ('36) 63 Cal. 746 the attorney for the plaintiffs, in a suit in which the defendant had been ordered to pay the taxed costs and had paid the same into Court, applied for permission to withdraw from that sum the amount of the attorney's costs. The defendant contended that he was entitled to set off against the costs payable by him the costs payable to him by the plaintiff in another suit. It was held that the attorney's claim must prevail over that of the defendant both under the common law, and by reason of Order 8, Rule 6, Civil P.C. which provides that no set-off shall affect the lien, upon the amount decreed of any pleader in respect of the costs payable to him under the decree. Ganesh Chunder v. Narayani Dassi ('39) I.L. R. (1939) 1 Cal. 212 related to an application by an attorney for payment to him of his costs out of moneys lying with the Calcutta Improvement Trust Tribunal under a consent decree. A client of the attorney had become entitled to Rs. 16,000 out of the said moneys, but had thereafter been adjudicated insolvent. In a contest between the Official Assignee and the attorney, it was held that as the property was procured for the client by the labour of the attorney, the latter's lien for his costs prevailed notwithstanding the bankruptcy of the client. Bhupendra Nath v. E. D. Sassoon and Co. ('17) 4 A.I.R. 1917 Cal. 241 was an application on behalf of a plaintiff's attorney claiming that he had a lien on a judgment obtained by the plaintiff against the defendant, and that his lien had priority over the claims of the plaintiff's creditors. One of these creditors was the defendant in the plaintiff's suit who claimed to set off against the plaintiff's decree a decree on an award made in the defendant's favour in an earlier proceeding. The attorney did not state that there was no chance of his recovering his costs from his clients, and that there was no other property out of which his claim could be satisfied. It was held that in the circumstances of that case it would not be proper for the Court to hold that the attorney's lien intercepted the set-off claimed. This case supports the view that the question of priority as between the attorney who sets up his lien, and a debtor of the client, who claims a setoff, is a matter of discretion. This view has been taken also in Vallabhdas Mulji v. Pranghankar ('32) 19 A.I.R. 1932 Bom. 619 .
11. None of the foregoing decisions are of real assistance to the opposite party in the present application, because in my judgment this ease falls entirely outside the common law Rule which governs what is known as the solicitor's particular lien, and which has been applied in these decisions. That Rule is founded on the principle that the solicitor is entitled to have his costs out of the property obtained for his client by the solicitor's exertions. Quite other considerations apply when the property is part of a fund which has come into the solicitor's hands for a particular purpose. It has been held that where moneys in a solicitor's hands have been earmarked for a specific purpose, the solicitor's lien for costs cannot intervene to defeat it. In Stumore v. Campbell and Co 1892) 1 Q.B. 314 a judgment-debtor had deposited with his solicitors a sum of money to be applied to a special purpose. The judgment-debtor died and the purpose failed. The judgment-creditor sought to attach the sum in the hands of the solicitors. It was held, that since on the failure of the special purpose for which it was deposited with the solicitors, the money remained in their hands subject to a trust to repay it to the judgment-debtor, they could not set up their claim to costs in answer to a demand for the return of the money, and that therefore it was a debt due from them to the judgment-debtor which could be attached. Lord Esher M. R. observed that the money was placed in the hands of the solicitors for a particular purpose:
So long as that purpose existed there was a trust imposed on them, and they were bound, if they accepted the money at all, to employ it or lay it out in the particular way indicated by the trust. That trust failed and the result of the failure was that another trust arose immediatety to pay back the money to the person who gave it. It is admitted that being trustees no lien would attach in their favour, because the money was entrusted to them for a specific purpose.
12. In re Clark, Ex parte Newland (1876) 4 Ch. D. 515 was a case in which certain creditors had resolved to accept a composition payable in two instalments. No trustee was appointed, but the debtor's solicitor paid the creditors the first instalment by means of money supplied to him, by the debtor. A sum sufficient to provide for the second instalment was placed in the solicitor's hands, but he did not pay all the creditors. Upon an application for payment by an unpaid creditor, the solicitor claimed a lien on the moneys in his hands for costs due to him by the debtor. It was held that the solicitor having constituted himself a trustee for the creditors was obliged to pay the creditor.
13. The same principle would seem to underlie two other decisions of which mention may be made: Wickens v. Townshend (1830) 1 Russ. and My. 361 and, Cross v. Cross (1880) 43 L.T. 533. In the former case a solicitor had received rents due to an estate of which a receiver had been appointed. It was held that he would have to pay them over to the receiver and could not retain them on the ground of his lien, the Lord Chancellor observing that 'a person can have no right of lien over property which he acquires in an assumed character.' The latter case was one in which a wife had petitioned for divorce, and her solicitor had received from the husband a certain sum as alimony pendente lite. The solicitor's claim of a lien over the money for his costs was disallowed by the President of the Probate, Divorce and Admiralty Division in Chambers. On an appeal by the solicitor it was held, following. Leete v. Leete (1879) 48 L. J. Mat. 61, that alimony pendente lite paid over to the wife's solicitor, without a direct waiver of her right to have it applied as she required, was to be set apart for her maintenance only. During the argument the learned President observed as follows:
So far as I have any control over it I will not allow any sums of money paid over by the husband as alimony for the distinct purpose of the wife's maintenance to be applied to any other purpose than that of her maintenance.
14. In my opinion the undertaking set out in the Order of 31st August 1939, whereby the defendant agreed to deposit with his attorney monies to be held by the attorney, constituted a trust. It was contended by the learned Senior Standing Counsel, as already indicated that the money did not pass into the attorney's hands by reason of that Order but was obtained for the defendant through the attorney's exertions in proceedings in connexion with the decree made in the defendant's favour in Suit No. 1000 of 1938. I am not sure of that, but even were that so, it is the character of the attorney's possession when the sum of Rs. 1500 came into his hands which has to be looked at. The learned Senior Standing Counsel has argued that the attorney did not undertake to be a trustee in respect of this fund, and that the Order did not make it subject to any charge in favour of the plaintiff. That may be the ease so far as express words go. But what was the intention of the words 'to be held by Mr. Poddar ?' What were the circumstances leading up to the undertaking and to the Order in which it was embodied There can be only one answer. The plaintiff had agreed to the discharge of the interim injunction, and to the adjournment of his application for attachment before judgment, on the distinct understanding that the defendant' sattorney was to hold a certain sum to answer the claim of the plaintiff, should the latter be successful in his suit against the defendant. The plaintiff was obviously agreeing to such an arrangement in lieu of other security. The fund was to be, and was to remain until further orders, security for the plaintiff's claim. This was the only purpose for which the money was to be held. In my judgment the attorney had assumed the character of a stake-holder, and his possession was impressed with a trust. His lien for his costs cannot therefore prevail.
15. The application is allowed with costs against both' the respondents. Certified for two counsel as of a motion. With regard to the Rs. 1500 held by Mr. Poddar, he is directed to pay the amount into Court by Friday next. If any money, being the difference between the sum of Rs. 3700 mentioned in the Order of Mc Nair J. of 31st August 1939, and the sum of Rs. 1500 herein mentioned, comes into the hands of the attorney, Mr. Poddar, in execution or otherwise, in satisfaction of the decree obtained by his client in Suit No. 1000 of 1938, the attorney Mr. Poddar is directed to pay that money also into Court in pursuance of the Order now made. Appeal, if any, is to be filed within a week of the receipt of the certified copy of the judgment. If the respondents do not file their appeal within that time, the petitioner will be at liberty to withdraw the money in Court.