1. This is an appeal from a judgment of Ameer, Ali, J., dated 16th August 1932 and the order which the learned Judge made, as part of that judgment, is in these terms: The order I propose to make is as follows:
(i) An order for payment of the costs of the applicant as are taxed against both respondents to this application.
(ii) an order charging the fund in the hands of P.N. Sen & Co., with payment of such costs in support of the applicant's lien.
(iii) an order against both respondents restraining them from withdrawing the said fund in excess of the amount due to the applicant without payment of such amount.
(iv) an order restraining both defendants from satisfying the decree in this suit in any manner which will deprive the applicant for such costs.
(v) the respondents to pay the costs of this application.
2. (After reciting the facts, His Lordship proceeded). Put compendiously therefore the claim which Messrs. Bural & Pyne were making was that the settlement arrived at between Singhania and Didwania, was to all intents and purposes, a device intended to deprive the solicitors of the costs which they earned in obtaining the decree in suit No. 568 of 1926. The learned Judge, when the matter came before him, dealt with the law at considerable length. After reviewing a large number of authorities he came to this conclusion:
I regard the arrangement, in this case, substantially as a set off of decrees, under Order 21, Rule 18, Civil P.C. As such, I regard it as an arrangement of a different character, and therefore to be regulated by rules different to those applicable to a bona fide settlement of disputed claims... Even so regarded however 1 consider myself bound by the ruling of Chaudhuri,. J., in Bhupendra Nath Bhose v. E.D. Sassoon & Co; 1917 Cal 241 to the effect that normally set off of two decrees will be allowed notwithstanding the solicitor's lien.
The learned Judge however qualifies his ruling; by admitting an exception whore 'there are equities' in favour of the solicitor.
In a clear case under Order 21, Rule 18 it is difficult to see what equities would or could arise.
I therefore take the meaning of the learned Judge to be this: that the Court will interfere to prevent a set-off upon grounds similar to those upon which it interferes in the case of a compromise of disputed clauses, i.e., 'collusion,' etc. In other words, the learned Judge treats set-off of decrees and compromise of claims upon the same footing.
I have therefore still to consider the arrangement in the present case, as if it wore a compromise.
A compromise (if so, it can be called) of this nature is in any event very different in degree to the compromise of doubtful claims. In the former case, the burden of showing that the arrangement was intended to defeat the solicitor's claim is obviously far more easily discharged. Indeed, in some cases, it might be necessary for the parties seeking to sot off to explain the reason for the course taken.
3. Then comes the final conclusion at which Ameer Ali, J., arrived, which is as follows:
I have carefully considered the circumstances of this case and I have on the facts no hesitation in coming to the conclusion that the parties intended so to arrange matters as to defeat the solicitor's lien. I am further of opinion, notwithstanding observations in some of the authorities above cited, that I am entitled to come to this conclusion without referring the applicants to a suit.
4. The learned Judge then made the order which I have already stated. It is to be seen that what the learned Judge decided, in effect, was this. The settlement arrived at between the parties was in the nature of a compromise. The evidence before him was sufficient to indicate to his satisfaction that what was included in that compromise, if I may so put it, was an intention to defeat the lien which the plaintiff's solicitors undoubtedly had; so, in the circumstances, it was open to him (the learned Judge) to make an order for direct payment. It may perhaps be convenient, if I deal with the last point first, namely, the question whether it was proper for the learned Judge to make an order upon the parties, or either of them, for payment direct to the solicitors concerned of the amount of costs in regard to which they had a lien. That matter was dealt with by the present Chief Justice in the case of Harnandroy Foolchand v. Gootiram Bhuttar 1920 Cal 122. The head-note of that case says:
On an application by a solicitor made in a suit in which certain costs had been awarded to his client against the opposite party, the Court has jurisdiction to enforce, in a proper case, the solicitor's lien by making a direct order for payment to the solicitor by the opposite party of such costs.
5. The learned Chief Justice after referring to a number of cases said:
I am not going to lay down that I shall require an attorney, before I enforce his lien, to satisfy me that he has utterly exhausted every possibility in order to get payment otherwise. It seems to me that this solicitor is quite reasonable in coming to the Court to ask that the Court should allow him to stand in the shoes of this defendant and to claim this money which the plaintiffs have been ordered to pay. The original client is dead; there is evidence that his legal representatives are not people of substance; there is definite evidence that they are unable to pay, and I think it is no abuse at all of the summary powers of this Court for this attorney to ask for an order which merely puts him in the shoes of his own client so that this sum of money which was ordered to be paid in 1916 should at least be realized.
I shall direct that this order be made to far as the plaintiff is concerned, and that the plaintiff be ordered to pay those costs to the attorney direct.
6. Subsequently, in a case which unfortunately has not been reported, Durgacharan Das v. Nabinkrishna Das, AAO No. 108 of 1930, a judgment was delivered by the present Chief Justice, with the concurrence of Buckland, J., on 10th March 1931, on the hearing of Appeal from an Original Order No. 108 of 1930, where a similar point had arisen. In course of the judgment, the learned Chief Justice said:
Thereupon, the attorney brought the present application in the suit against the defendants asking that a certain sum should be paid to him and the learned Judge has given him an order for payment of the sum of Rs. 922-0-6, being the balance of the amount of his taxed costs. Whether in Harnandroy Foolchand v. Gootiram Bhuttar 1920 Cal 122, I was right or wrong in following the decision of Jenkins, J., in Khetter Kristo Mitter v. Kally Prosunno Ghose (1898) 25 Cal 887, is a matter upon which there is a good deal of room for doubt, particularly as we have had cited to us a decision to the contrary of Sale, J., in Ramdoyal Serowgie v. Ramdeo (1899) 27 Cal 269; but as the practice appears at present to be in favour of making these orders and as there does not seem to be any practice by which an attorney can come to the Court and get a charging order as in England, I am not prepared to deviate in this case from the practice which I followed on the previous occasion.
7. It appears therefore that the learned Chief Justice was of opinion that it was right for him to hold, as the settled practice of this Court, that it is competent for a Judge sitting on the original side to order direct payment of the costs to which an attorney is entitled and in respect of which ha has a lien. That practice can be supported by reference to a number of cases in England but I will refer to only one or two of them, viz., Young v. Readhead (1933) 2 DPC 119 and Ex parte W. Games: In re Williams v. Lloyed (1864) 3 H & C 294, where it was held that a Judge had power, in the exercise of the equitable interference of the Court, to order that the plaintiff or the defendant should pay the attorney costs due to him. The only other case, which I will cite in this connexion, is the case of In re, Sullivan v. Pearson, Ex parte Morrison (1868) 4 QB 153. I would add that I respectfully agree with the learned Chief Justice that it is now the settled practice of this Court that an order for direct payment may, in appropriate cases, be made. It appears therefore that assuming that the learned Judge was right in the first two conclusions at which he arrived, he was entitled to make the order which in fact he made.
8. We have now to consider whether the main conclusions of the learned Judge were such that we should support the findings at which he arrived. Mr. Isaacs, on behalf of the appellant Singhania, has argued that it was not open to the Court to deal with this matter at all by reason of the provisions of Order 21, Rule 2 or Order 21, Rule 18 of the Code. He says that the provisions of Order 21, Rule 2 are plain, unequivocal and mandatory, and therefore if the parties came before the Court to have an adjustment recorded or to have a set-off recorded under the provisions of Order 21, Rule 18, then the Court must record the adjustment without reference to any extraneous considerations. Mr. Isaacs has argued that, as the only reference in the Code to any attorney's or solicitor's lien is by implication in Order 8, Rule 6, no lion should be recognized when there is a question of recording a set-off. Order 8, Rule 6, Sub-rule (1) says:
Where in a suit for the recovery of money the defendant claims to set off against the plaintiff's demand any ascertained sum of money legally recoverabls by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court and both parties fill the same character as they fill in the plaintiffs' suit, the defendant may, at the first hearing of the suit, but not afterwards unless permitted by the Court, present a written statement containing the particulars of the debt to be set off.
9. Then Sub-rule (2) says:
The written statement shall have the same effect as a plaint in a cross suit so as to enable the Court to pronounce a final judgment in respect both of the original claim and of the set-off: but this shall not affect the lien, upon the amount decreed, of any pleader in respect of the costs payable to him under the decree.
10. The word pleader' is defined in Sub-section (15), Section 2 of the Code as meaning any person entitled to appear and plead for another in Court, and includes an advocate, a vakil and an attorney of a High Court. Accordingly, Mr. Isaacs says that it is only in the circumstances contemplated by Order 8, Rule 6, that an attorney's lien would not be affected. Therefore in any other circumstances such as the present where there is a settlement between the parties in the nature of a compromise or set-off, it is always open to the parties to make any arrangement they choose even though it has the effect of prejudicially affecting the lien of an attorney in the case. Speaking for myself, I cannot accept the suggestion that is the state of the law, and in my opinion as the Civil Procedure Code does not in terms say that the pre existing law is to be set aside or repealed, we must take it that the Code does not contain exhaustive general principles of law applicable to the question of attorney's lien in the way contended for by Mr. Isaacs. Sir Dinshaw Mulla in his note to Order 8, Rule 6 gives a quotation from the case of Devkabai v. Jefferson (1886) 10 Bom 248 in which the Chief Justice (Sir Charles Sargent) said:
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 passing of 23 & 24 Vic, C. 127, by which that lion was very much extended. By that law the solicitor had a lien for his costs on any funds or sum of money recovered for or which became payable to, his client in the suit.
11. I respectfully agree with the observations of the learned Chief Justice that the question of the solicitor's lien in this country is still governed by the relevant principles of English law. Therefore a matter such as this falls to be decided on the footing of those principles. In any event, in this particular case, it is to be noted that the parties had not reached the stage where they were actually before the Court asking either that the arrangement between them should be recorded as an adjustment under the terms of Order 21, Rule 2 or dealt with as provided for in Order 21, Rule 18 as a 'set-off,' if set-off it was. It is true that they had taken out a summons for such purpose, as I have already stated, but before the return of this summons, the solicitors, Messrs. Bural & Pyne, had managed to interpose and bring the matter before the Court, upon an application for enforcement of their lien. Therefore, it seems to me that any argument based on the operative effect of the provisions of Order 21 is immaterial in the circumstances of the present case.
12. Before passing from this aspect of the matter that is to say the operative effect if any, of Order 21, Civil P. C, I ought to add that Mr. Isaacs sought to base his argument upon the contention that these provisions of the Code have in effect abrogated the operation of the English law as regards solicitors' lien in cases where there is an adjustment.' He referred to the case of Ward v. Haddrill (1904) 1KB 399, where it was held that, by Section 150, of the County Courts Act, 1888, it was open to the parties in actions in county Courts to enter into an arrangement the involving the setting off of cross judgments, even though such an arrangement made no provision for the solicitors' costs, and had the effect of depriving solicitor of one of the parties of the benefit of his lien. But it is to be observed that, in the judgment of that case, Wills, J., said with reference to the jurisdiction given to county Courts:
The object was to secure a cheap and speedy administration of the law for the benefit of the poorer classes and the Court which was established by the Act was called in popular parlance the poor man's Court.' 1 am not sure that the legislature did not intend to prevent the multiplication of costs in some cases, even though the costs which could be properly incurred.
13. The answer to Mr. Isaacs' argument therefore is that the county Courts in England have been given a special jurisdiction under the provisions of the County Courts Act, 1888, which ware clearly designed to bring about an expeditious and inexpensive method of settling disputes between parties who have cross judgments, the one against the other. I do not think it right to extract any general principle from that one English case which would be sufficient to justify the proposition that the Civil Procedure Code by the provisions of Order 21, has pro tanto abrogated the previous law with regard to solicitor's lien. Neither can I subscribe to the proposition advanced by Mr. Isaacs to the effect that the Courts ought not to allow any extraneous considerations to enter into the matter when the parties appear before the Court in proceedings either under Order 21, Rule 2 or under Order 21, Rule 18. In my opinion, it cannot be correct to say that the law as to solicitor's lien has been altered by the provisions of Order 21. Upon that view of the matter, it follows that this case has to be dealt with and decided in the light of the principles of the English law applicable to a solicitor's lien. Perhaps it would be more accurate to say that the matter has to be decided in the light of the English authorities on this point. As I have indicated, in an earlier part of this judgment, the learned Judges came to various conclusions the last of which was upon the question whether it was competent for him to make an order for direct payment or not. That I have already dealt with. The other conclusions were that the arrangement entered into by the parties was in the nature of a compromise and the matter must be dealt with upon that basis. The learned. Judge next found that the parties intended so to arrange matters as to defeat the solicitor's lien. It is to be observed that a solicitor has, apart from any order of the Court or any statute, a lien over any property recovered or preserved and over the proceeds of any judgment, that is to say, of any decree which is obtained for his client by the solicitor's exertions. That lien is known as a particular lien. It relates only to the costs incurred in recovering the property or obtaining a judgment for payment of money. The right of the solicitor is really in essence a claim to the equitable interference of the Court for the solicitor's protection. That was laid down nearly a century ago in Barker v. St. Quintin (1844) 12 M & W 441 and it was re-stated very clearly in Ross v. Buxton (1889) 42 Ch D 190 by Stirling, J. In that case it was said that the lien of the solicitor of a plaintiff for the costs of an action attaches to money received by the plaintiff even by way of compromise where such money is in substance the fruit of the action. Stirling, J., referred to an earlier case of Ormerod v. Tate (1801) 1 East 464 where Lord Kenyon had said:
The convenience, good sense, and justice of the thing require that an attorney should have the same lien on damages awarded as if they were recovered by the judgment of the Court in the ordinary course of the cause.
14. That is the fundamental position and by virtue of the lien which he has, the solicitor has a right to ask for the intervention of the Court for his protection whenever he finds, after recovering and preserving the property of his client or after obtaining judgment for payment of the money of the client that there is a probability of the client depriving him of his costs. At the same time however it is quite clear that the solicitor's lien may, in some circumstances, be affected by a compromise between the parties and it has been definitely laid down that, as a general rule, the Court will not, for the purpose of maintaining the solicitor's lien, interfere in a compromise which is a bona fide compromise, The case of Brunsdon v. Allard (1859) 2 E & E 19, cited by Mr. Isaacs, is a clear authority for that proposition. The headnote of that case is in these terms:
An attorney's right of lien for his costs, on a judgment recovered by his client, is subject to the right of the parties to the action to make a bona fide compromise. The result of such compromise is that the lien is lost. But the lien may prevail against a collusive compromise made by the parties with the express object of defeating it. (In this particular case)-the parties to cross actions, the plaintiff in each of which had obtained judgment, bona fide compromised the actions, after notice to one of them and his attorney from the attorney of the other not to do so in prejudice of the latter's lien on his clients' judgment.
15. It was held, in that case, that the attorney had no ground for claiming the equitable interference of the Court to enforce his lien. Therefore if there is a genuine bona fide compromise the Court will not interfere. That brings me to observe that if the compromise is not bona fide but collusive and is entered into between the parties specifically for the purpose of depriving the solicitor of his lien, then the Court will usually interfere for the protection of the solicitor and there is no doubt that, in such an event, the solicitor may apply for payment of the costs by either of the parties to the scheme. In Brunsdon v. Allard (1859) 2 E & E 19, ubi supra, Wightman, J., remarked:
The Court of Exchequer has held, in Barker v. St. Quintin (1844) 12 M & W 441, that even collusion between the parties to the suit gives him no right to put in force the process of the Court upon a judgment, of his own mere motion and without his client's consent. Perhaps there may be cases in which, if a case of collusion is thoroughly made out, the Court will, in the exercise of an equitable jurisdiction, interfere in the attorney's favour. But I think that no sufficient evidence of collusion exists in the present case. The affidavits do not convince me that the object of the arrangement between the parties to the suit was to deprive the plaintiff's attorney of his costs; though, no doubt, that was the result of it. The object appears to have been to make a bona fide compromise in order to get rid of Allard's opposition to Brunsdon in the insolvent Court.
16. Erle, J., said in the same case that each party in an action has been described as dominus litis:
Lien,' properly speaking, is a word which applies only to a chattel; 'lien upon a judgment' is a vague and inaccurate expression, and the words 'equitable lien' are intensely undefined. The attorney's right however certainly goes to this extent that, if a conspiracy between the plaintiff and defendant, to defraud the attorney of his costs, is clearly made out, the Court will interfere to prevent it. It is somewhat difficult to say what would amount to such a conspiracy; suffice it to say that here no such conspiracy has been shown.
17. Another case to which I should refer to in this connexion is In re, Margetson and Jones (1897) 2 Ch 314, where it was held that the Courts will not interfere with a bona fide compromise, but will interfere where there is collusion. It is necessary therefore to consider what is meant by 'collusion' in this connexion. The case of In re, Margetson and Jones (1897) 2 Ch 314 follows the earlier case of Price v. Crouch (1891) 60 LJ QB 767, where 'collusion,' for the purpose of deciding whether or not a compromise ought to be allowed to exclude the solicitor's lien, was defined, I will take the case of Price v. Crouch (1891) 60 LJ QB 767 first. In that case, Lord Denman, who was then Denman, J., said;
Them in question in the case however is whether all these circumstances taken together enable us to hold that it is brought within the meaning of the word 'collusion.' If the learned Judge at chambers had found that there had been collusion, there certainly was evidence which would have justified him in doing so. The only doubt I have is, * * * * what the proper finding of fact is for us to arrive at now. The point appears to me to be, what is the meaning of the word 'collusion' in relation to such a case as the present; and the meaning of the word goes no further than to denote an agreement between two parties, with the knowledge that they are doing an unfair thing in depriving a third party of a right he had. Mr. Gore cited the judgment of Lord Campbell in Brunsdon v. Allard (1859) 2 E & E 19 and laid great stress upon this passage: 'Although an attorney has a lien for his costs, and, when his client has recovered judgment in an action, may apply the fruits of the action in payment of the sum which is due to him, that does not prevent the parties to the action from coming to a compromise, the result of which is that the attorney loses his lien, provided that the arrangement is not a mere juggle between the parties, entered into by them to deprive the attorney of his costs.' I do not think however that Lord Campbell meant to say that, unless there was a ''mere juggle,' a juggle in a fraudulent sense, there could be no collusion.
The other Judges do not go so far.
18. Then, commenting on the judgment of Wightman in Brunsdon v. Allard (1859) 2 E & E 19, ubi supra, Lord Denman said:
Wightman, J., hits the point: 'Was the object of the arrangement to deprive the plaintiff's attorney of his costs?' I conclude from the language both of Wightman, J., and Crompton, J., in that case that we are justified in holding that in the present case the object of the bargain was to defeat the applicants lien, and so-to deprive him of the costs of the work he had done as solicitor to the plaintiff. Upon the facts brought before us, I am of opinion that a jury would be warranted in saying that there was in this transaction an object or purpose to prevent the applicant getting his costs.
19. Wills, J. added these observations:
Both the plaintiff and the solicitors for the defendant were well aware that a considerable sum for costs was due, and their conduct shows that they desired to defeat the applicant's claim for them. The defendant's solicitors knew that they could get bettor terms for their client from the plaintiff if he left his solicitor out in the cold. This being the motive, I am of opinion that the order at chambers was rightly made, and must be sustained, although upon grounds different from those upon which the learned Judge decided.
20. From the judgments in this case of Price v. Crouch (1891) 60 LJ QB 767, I think we can extract two propositions: first, there is collusion, if the agreement is made between the parties and there is knowledge of the doing of an unfair thing by depriving the solicitor of his costs; and, secondly, there is collusion if the motive underlying the action of the parties is to deprive the solicitor of his costs. Now, in the case of In re, Margetson and Jones (1897) 2 Ch 314 above mentioned, the decision in Price v. Crouch (1891) 60 LJ QB 767 was followed by Kekewich, J. He deals with the matter thus. He first of all refers to a dictum of Lindley, L.J., in The Hope (1883) 8PD 144, where Lindley, L.J., said:
There is no rule that the parties may not compromise an action without the intervention of their solicitors. They must however do so honestly, and not intend to cheat the solicitors of their proper charge.
21. Kekewich, J. comments on that and says:
The word cheat is not a bit too strong; the Master of the Bolls also uses it.
22. Then he says:
The question is whether I have here such evidence as satisfied the Court in Price v. Crouch (1891) 60 LJ QB 767:
23. Then he deals with the evidence and comes to the conclusion:
I have no doubt they, did not realists the impropriety of what they were doing. The case seems to me to come within the decision in Price v. Crouch (1891) 60 LJ QB 767.
24. He then deals with the form of the order. When one examines all these authorities, the position seems to be that the conclusion to be drawn from them is this: where there is a compromise, the Court will not interfere unless the motive or the object or the intention of the parties is that the solicitor shall be deprived of his lien. Putting the matter in another way, it should generally be held that there is 'collusion,' if the agreement between the parties is made with the knowledge that the result will inevitably be to deprive the solicitor of his costs which he has earned. There is certainly 'collusion' if the parties enter into an agreement knowing and intending that the outcome will be that the solicitor is deprived of his lien. At the outset of his argument, Mr. Isaaces definitely stated that what he was intending to argue in this case was that the arrangement between the parties was not in the nature of a compromise, but was in the nature of a set-off. He said that quite plainly, and argued that the law applicable to such a situation is this: If the parties enter into a set-off, it is entirely a matter of discretion with the Court whether the Court should exercise its right of equitable interference or not. Therefore if the learned Judge had found that the arrangement between Singhania and Didwania, in the present case, was a set-off, we should have been obliged to enquire whether the learned Judge in making the order for payment had exercised the discretion, which he would undoubtedly have, judicially, and in accordance with proper principles. That aspect of the matter can however be entirely eliminated for our present purpose because later in his argument Mr. Isaacs abandoned his contention that the arrangement was a set-off and argued solely on the footing that there was a compromise between the parties and not a set-off. Mr. Isaacs having finally adopted the attitude that there was a compromise and the learned Judge having sO found, I do not think that anything more need be said as regards the precise nature of the transaction. We may take it for the purposes of our judgment that it was in fact a compromise. It now remains to be seen whether the learned Judge was right in coming to the conclusion that it was a compromise which had the element of collusion attaching to it, collusion in the sense which I have tried to define. The learned Judge expressed a very definite view as to the state of mind of the parties at the time when they entered into the arrangement. He said:
On the facts, 1 have no hesitation in coming to the conclusion that the parties intended so to arrange matters as to defeat the solicitor's lien.
25. The question of the state of mind of the parties is, of course, a question of fact. Therefore when the learned Judge said that he come to the conclusion that the parties intended to deprive the solicitor of his costs, that conclusion is a finding of fact which ought not to be disturbed by this Court unless it can be demonstrated to our satisfaction that there was really no evidence at all on which the learned Judge could have so found. We must therefore see if there was any such evidence. (After considering the evidence the judgment proceeded) The position seems to have been this: Hardayal Didwania was impecunious and financially involved, even if he was not actually an insolvent at the time when the arrangement was entered into. That fact obviously was well known to Singhania, who was his son-in-law. Singhania then goes to the solicitor of Didwania and attempts to get him to settle his claim for costs upon the basis of a payment of annas 4 in the rupee. Mr. Isaacs argued that was only an incident in the warfare between the parties and that what Singhania was really trying to do was to buy up Messrs. Bural & Pyne's claim against their client Didwania in order that, having bought up the claim, Singhania might deal Didwania a further blow and put pressure on him by claiming the full amount of the solicitor's bill of costs.
26. In the light of the petition and the affidavit of Messrs. Bural & Pyne, and considering that there are no satisfactory denials in the affidavit of Premsukhdas Singhania, I think we ought to come to the conclusion that there was ample evidence on which the learned Judge could find that the parties were acting in collusion', in the sense in which that term can be used for the purpose of deciding whether a compromise should be allowed to defeat the solicitor's lien or not. I would therefore hold that there is no reason why we should set aside the learned Judge's conclusions. In that view of the matter, it follows that this appeal fails and must be dismissed with costs.
27. I agree.