Full Judgment Text
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PETITIONER:
IN THE MATTER OF Mr. ’G’A SENIOR ADVOCATE OF THE SUPREME COU
Vs.
RESPONDENT:
DATE OF JUDGMENT:
27/05/1954
BENCH:
DAS, SUDHI RANJAN
BENCH:
DAS, SUDHI RANJAN
MUKHERJEA, B.K.
BOSE, VIVIAN
HASAN, GHULAM
JAGANNADHADAS, B.
CITATION:
1954 AIR 560 1955 SCR 501
ACT:
Supreme Court Rules--Order IV, rule 30-Advocate-Supreme
Court-Agreement between him and his client for sharing
recoveries in the legal proceedings-Whether professional
misconduct-Professional conduct of Advocate of Supreme Court
in view of his special privileges and status.
HEADNOTE:
The act of an Advocate of the Supreme Court in entering into
an agreement with a client whereby the client undertakes to
pay him a part of any recoveries he might make in the legal
proceedings in respect of which he is employed, amounts to
professional misconduct and makes him liable for
disciplinary action and to this extent the ordinary legal
rights of contract do not apply to an Advocate as such.
Such agreements are not permissible to advocates under the
rigid rules of conduct enjoined by the profession so that
their integrity, dignity and honour may be placed above the
breath of scandal.
An Advocate of the Supreme Court is governed by special and
rigid rules of professional conduct expected of and applied
to a specially privileged class of persons who because of
their privileged status are subject to certain disabilities
which do not attach to other men and which do not even
attach to an Advocate while acting otherwise than as
Advocate.
An Advocate is therefore bound to conduct himself in a
manner befitting the high and honourable profession the
privileges of which he enjoys and if he departs from the
high standards which that profession has set for itself and
demands of him he renders himself liable to disciplinary
action.
JUDGMENT:
Original (Disciplinary) Jurisdiction.
In the matter of summons issued to Mr. "G" under rule 30 of
Order IV, Supreme Court Rules, to show cause to this Court
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why disciplinary action should not be taken against him.
The material facts of the case are stated in the Judgment
Order IV rule 30 of the Supreme Court rules runs as
follows;-
" Where on the complaint of any person or otherwise, the
Court is of opinion that an Advocate has been guilty of
misconduct or of conduct unbecoming an Advocate, the Court
may debar him from practising before the Court either
permanently or for such period as the Court may think fit,
and the Registrar shall thereupon report his name to his own
High Court
491
" Provided that the Court shall in the first instance
direct a summons to issue returnable before the Court or
before a Special Bench to be constituted by the Chief
Justice, requiring the Advocate to show cause against the
matter alleged in the summons, and the summons shall, if
possible, be served personally upon him with copies of any
affidavit or statement before the Court at the time of the
issue of the summons."
G in person:
Amarnath was the client. He had admittedly a just cause and
the High Court has held that the terms came from him and
were accepted out of compassion. I submit that in such
circumstances the agreement was neither professionally nor
morally improper. English law of Champerty and Maintenance
does not apply to India; Please see Ram Coomar Coondoo v.
Chunder Canto Mookerjee (1876) L.R. 4 I.A. 23; Bhagwat Dayal
Singh v. Debi Dayal Sahu (1907) L.R. 35 I.A. 48. Prior to
1926 there was a distinction between Pleaders, Advocates and
barristers. Barristers could nod enter into contractual
relationship. They could not sue or be sued: Deo Kisen v.
Budh Prakash (1833) I.L.R. 25 All. 509 F.B. This was in
accordance with the English rules of professional etiquette
among Barristers, but Pleaders and Advocates could enter
into contractual relations. Contingent fees have been known
and recognised in India at any rate since 1814. Please see
sec. 25, Bengal Regulation XXVII of 1814, and see. 52,
Bombay Regulation II of 1827. Contractual rights were
extended in 1846. Please see Pleaders Act I of 1846; Please
see sec. 7 as to fees. But agreements had to be registered
with the Court to be enforceable. Wide changes in all these
matters came about by legislation in 1926 (Legal
Practitioners’ Fees Act, 1926). Barristers, Attorneys,
Advocates, Pleaders all came within the definition of Legal
Practitioners, who may now sue and be sued and may enter
into and may settle with their clients the terms of their
engagement and the fees to be paid. Section 3 of the Act is
sufficiently wide to include the impugned agreement with
Amarnath. Contingent fees have been known in India for more
than a century. In Madras in the case of Achamparambath
Cheria Kunhammu v. William Sydenham Gantz (1881) I.L.R. 3
Mlad. 138 F.B. a contrary view was expressed but Madras bad
framed a special rule by Circular Order of the Sudder Adulet
dated 18-8-53. In Bombay a contrary view was also taken: In
re Bhandara (1901) 3 Bom. L.R. 102 F.B. But the contract of
the Advocate there was clearly improper and facts of that
case were totally different from the facts of the present
case. The observations of the Learned Chief Justice were
obiter. In Bombay, Inampatra, which was in substance a fee
payable and contingent on success has, however, been held
enforceable: Shivram Hari v. Arjun (1881) I.L.R. 5 Bom. 258;
Parshram Vaman v. Hiraman Fatu (1884) I.L.R. 8 Bom. 413.
GHULAM HASAN J.: In U.P. they were referred to as Shukriana.
G: In the Punjab they were known as "back fees"
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and were held valid and enforceable: 5 P.R. 1878 F.B. Beechy
v. Faiz Mahomed until the Full Court’s decision by majority
disapproved of the practice: 61 P.R. 1907 Ganga v. Devi Das.
But strong reasons in support of the practice will be-found
in the judgments of Lalchand & Chatterjee JJ. in 61 P.R.
1907. Contingent fees in a just cause have found
approbation in England. Please see Wiggins V. Lavy (1928)
44 T.L.R. 721 ; Bich v. Cook (1900) 110 L.T.J.D. 94 C.A. per
Lord Russell L.J.
In America, contingent fees are expressly recognised in
the canons of professional ethics of the American Bar
Association (Canon 12); See " Legal Ethics" by Henry S.
Drinker (Columbia University Press page 99) and Hoffman’s
Resolutions (Ibid at page 343). The Supreme Court of the
U.S.A. in several cases has held such agreements as
enforceable.
1. Wylie v. Coxe 14 L. Ed. 753.
2. Barnes v. Alexander 58 L. Ed. 530.
3. McGowan v. Parish 59 L. Ed. 955.
4. Morris v. Giddings 29 L. Ed. 403.
5. Ball v. Halsell 40 L. Ed. 622.
6. Ingersoll v. Coram 53 L. Ed. 208.
The substance of the American law will be found in the
foot note to McMicken v. Perin, 15 L. Ed. 504.
The High Court based its decision in the present case
(1954) 56 Bombay L.R. 838 in re K.L. G on a question of
Public Policy as void under sec. 23 of the Contract Act, but
Public Policy has been held to be a treacherous ground for
legal decision [Lord Davey in Tanson v. Driefontein
Consolidated Mines [1901] A.C. 484 at page 500.]
GHULAM HASAN J. Public Policy is an " unruly horse."
MUKHERJEA J. You need not press this point.
M. C. Setalvad, Attorney-General for India (G. N.
Joshi and P. G. Gokhale with him) Conditions of the Bar in
America and in India are very different. American
authorities have therefore no relevance (Please see
observations of Rattigan J. in 61 P.R. 1907 Ganga Ram v.
Devi Das). An agreement though not void in law, may
nevertheless amount to professional misconduct. Our Courts
have held that agreeing to a share in the fruits of
litigation is unprofessional. Please see (1874) 21 W.R.
297: In the matter of Moung Htoon Oung, an Advocate at
Bangoon ; (1900) 4 C.L.J. 259 -In the matter of an Advocate;
(1901) 3 Bom. L.R. 102-In re N. F. Bhandara and the
majority judgments of the Full Court in 61 P.R. of 1907.
The facts in the case in 3 Bom. Law Reporter 102 may be
different but the rules of professional conduct were clearly
laid down in the observations of Sir Lawrence Jenkins.
Rigid notions of Champerty and Maintenance are not
applicable to India but such contracts are prohibited by
professional rules of conduct.
G. in reply: The law cannot approbate and reprobate in the
same breath. The Rulings earlier than the Legal
Practitioners
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Fees Act of 1926 and expressing a contrary view are now
obsolete. A contract which is not vitiated by fraud,
misrepresentation or some illegality or is not void under
any recognised head of public policy, cannot amount to
professional misconduct. The misconduct must fall within
the definitions and limitations of misconduct laid down by
the Bombay High Court in (1934) 36 Bom. L.R. 1136 F.B. Sir
Jamshed Byramji Kanga v. Kaikhushru Bomanji Bharucha; and
Anant Vishnu Chitre v. Pitamberdas Goculdas Mehta.
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’ G’ in person.
M.C. Setalvad, Attorney-General for India (G.,N. Joshi and
P. G. Gokhale, with him) for the Hon’ble Chief Justice and
other Hon’ble Judges of the Bombay High Court.
1954. May 27. The Judgment of the Court was delivered by
BOSE J.-This matter arises out of a summons issued to Mr. G,
a Senior Advocate of this Court under Order IV, rule 30, of
the Supreme Court Rules, to show cause why disciplinary
action should not be taken against him.
Mr. G was called to the Bar in England and was later
enrolled as an Advocate of the Bombay High Court. He is
also an Advocate of this Court. On 20th December, 1952, he
entered into an agreement with a client whereby the client
undertook to pay him 50 per cent. of any recoveries he might
make in the legal proceedings in respect of which he was
engaged. On this being reported to the High Court the
matter was referred to the Bombay Bar Council and was
investigated by three of its members under section 1 1 (1)
of the Bar Councils Act. They recorded their opinion that
this amounted to professional misconduct. The High Court
agreed and suspended Mr. G from practice as an Advocate of
the Bombay High Court for six months. The learned Judges
considered that they had no power to affect his position as
an Advocate of this Court, so directed that a copy of their
judgement be submitted to this Court to enable this Court to
take such action on it as it thought fit. ’Acting on this
report this Court issued notice to the petitioner under
Order IV, rule 30, to show cause why discipliner y action
should not be taken against him. About the same time Mr. G
filed a petition for a writ
494
under article’32 of the Constitution. We are confining
ourselves in this order to the matter raised in the summons.
There is no dispute about the facts. They are set out
in Mr. G’s petition under article 32 and\are as follows:
On the 23rd of July, 1951, Air. G’s client is said to
have entered into an agreement with the Baroda Theatres
Ltd., for work on a picture which they intended to produce.
The remuneration agreed on was Rs. 15,000. Of this Rs.
3,000 was paid at once and the balance, Rs. 12,000, was to
be paid on the completion of the picture. It is said that
at the date of the dispute the Barods Theatres admitted that
Rs. 9,400 was due, but as they did not pay up, the client
consulted Mr. G about the best way to recover his money and
wanted to know what the expenses and fees would be. After
examining the matter in detail and talking it over with his
client, Mr. G advised him that two courses were open to him.
First, there was a civil suit. He said the cost of this
would be about Rs. 800 for Court fees and expenses and about
Rs. 1,250 for fees. The other alternative was winding up
proceedings. The client was told that in these the Court
fees would be lower but Mr. G’s fees would have to be higher
as winding up proceedings are usually protracted.
The client preferred the latter course but said that he
could not pay more than Rs. 200 towards the expenses and as
regards the fees he said he was too poor to pay and so made
a proposal which he reduced to writing. It is embodied in
the following letter dated 20th December, 1952, addressed to
Mr. G:
I hereby engage you with regard to my claim against the
Baroda Theatres Ltd., for a sum of Rs. 9,400 (balance due to
me).
Out of the recoveries you may take 50% of the amount
recovered. I will by Wednesday deposit Rs. 200 in your
account or give personally towards expenses."
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Mr. G said that he was unwilling to work on these terms
but when he was pressed to do so and when he
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realised that unless he agreed the client would probably
lose a just claim he reluctantly agreed.
Rs. 200 was thereupon paid towards expenses and Mr. G at
once entered into correspondence with the solicitors of the
Baroda Theatres Ltd. A winging up petition was drawn up and
declared but was not filed because the matter was
compromised at that stage. The Baroda Theatres undertook to
pay Mr. G’s client Rs. 6,400 in full satisfaction of his
claim.
The client then paid Mr. G a further Rs. 800. (He had
already paid Rs. 200, part of which was spent for expenses).
Mr. G claimed the balance which was roughly Rs. 2,200.
We are not concerned with the proceedings in the Bombay High
Court and before the Tribunal of the Bar Council in the
summons matter with which we are dealing at the moment, as
we are acting here under Order IV, rule 30, of the Rules of
this Court. The only question is whether, on the facts and
circumstances set out above (all of which are admitted by
Mr. G), his engagement of 20th December, 1952, amounts to
professional misconduct.
Mr. G argued the matter at length, and to his credit be it
said, objectively and with restraint, but it is not
necessary to cover the wide field he did because we are not
concerned with ordinary rights of contract, nor with
ordinary legal rights, but with the special and rigid
rules of professional conduct expected of and applied to a
specially privileged class of persons who, because of there
privileged status, are subject to certain disabilities which
do not attach to other men and which do not attach even to
them in a non-professional character. To use the language
of the Army, an Advocate of this Court is expected at all
times to comport himself in a manner befitting his status as
an " officer and a gentleman." In the Army it is a military
offence to do otherwise (see section 45 of the Army Act,
1950) though no notice would be taken of ungentlemanly
conduct under the ordinary law of the land, and none in the
case of a civilian. So here, he is bound to conduct himself
in a manner befitting the high and-
496
honourable profession to whose privileges he has so long
been admitted; and if he departs from the high standards
which that profession has set for itself and demands of him
in professional matters, he is liable to disciplinary
action.
Now it can be accepted at once that a contract of this kind
would be legally unobjectionable if no lawyer was involved.
The rigid English rules of champerty and maintenance do not
apply in India, so if this agreement had been between what
we might term third parties, it would have been legally
enforceable and good. It may even be that it is good in law
and enforceable as it stands though we do not so decide
because the question does not arise; but that was argued and
for the sake of argument even that can be conceded. It
follows that there is nothing morally wrong, nothing to
shock the conscience, nothing against public policy and
public morals in such a transaction per se, that is to say,
when a legal practitioner is not concerned. But that is not
the question we have to consider. However much these
agreements may be open to other men what we have to decide
is whether they are permissible under the rigid rules of
conduct enjoyed by the members of a very close professional
preserve so that their integrity, dignity and honour may be
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placed above the breath of scandal. That is part of the
price one pays for the privilege of belonging to a kind of
close and exclusive "and enjoying in it privileges and
immunities’ denied to less fortunate persons who are outside
its fold. There is no need to enter its portals and there
is no need to stay, but having entered and having elected
to. stay and enjoy its amenities and privileges, its rules
must be obeyed or the disciplinary measures which it is
entitled to take must be suffered. The real question
therefore is whether this kind of conduct is forbidden to
the elect or whether, if it was once forbidden, the ban has
since been removed, either directly or by implication, by
legislative action.
Now it was not disputed that, so far as English Barristers
are concerned, this sort of agreement was once taboo both in
England and in India. Even when
497
they worked in the mofussil in India and did the kind of
work that would be done by solicitors in England and in the
Presidency Towns in India, they could not enter into an
engagement of this kind, for even solicitors in England are
forbidden from making such bargains (see Cordery’s Law
Relating to Solicitors, fourth edition, page 342). But, it
was argued, this rule only applied to members of the English
Bar, and in any event it was abrogated in India in 1926.
We will first examine whether there was a difference between
Barristers and other classes of lawyers. This point was
raised in the Punjab in 1907 but was rejected by a majority
of seven Judges to two in a Full Bench of nine Judges in
Ganga Ram v. Devi Das(1). But it is to be observed that
even the two dissenting Judges agreed that an engagement of
the present kind was not open to a member of the Punjab Bar.
Lal Chand J. (who dissented) said at page 331 :
"I am in perfect accord with the Hon’ble Chief Judge that
stipulation to receive a share in the result of the
litigation is different from a stipulation to be, paid a fee
contingent on success."
The other dissenting Judge, Chatterji J., agreed with him
but even as regards the practice which these two learned
Judges thought permissible at the date of their decision,
Chatterji J. said at page 299
"It must not be supposed, however, that I am in favour of
the practice. I should on the whole prefer its
abolition......... "
We agree with Chitty J. at page 326 that there was no
justification even at that date for seeking to apply one set
of rules to one branch of the profession and another to
another. As he said-
"What is right or wrong for the one must be right or wrong
for the other,"
or, as Sir Lawrence Jenkins C. J. put it in In re. N.F.
Bhandara(2),
"For common honesty there must be no sliding scale even in
the mofussil..............
(1) 61 P. R. (Of 1907), P. 280. (2) 3 Bom, L. R. 102 at I.
I. J.
64
498
Reading "standards of professional conduct" for the word
"honesty", the quotation is apt here. In any case, the
decisions to which we shall refer deal with "Advocates" and
even where these "Advocates" were Barristers the matter
touched them as "Advocates" of an Indian High Court and not
because of their special status as Barristers. It is true
that at one time Advocates were mainly Barristers, but that
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was not always the case and the rule laid down in these
decisions governed all "Advocates," whether Barristers or
otherwise.
The learned Judges in the Punjab Record case collected all
the available authorities up to the year of their decision
and they show that this kind of agreement was condemned in
Calcutta in 1874 and 1900: In the matter of Moung Htoon
Qung(1) and In the matter of an Advocate of the Calcutta
High Court(2) ; in Bombay in 1901: In re. N. F. Bhandara(3)
; and in Madras in 1881 and again in 1939 : Achamparambath
Cheria Kunhammu v. William Sydenham Ganty(1) and In re. an
Advocate of the Madras High Court(5). As the Bombay High
Court is the one in which Mr. G normally practices and as
the engagement was entered into in Bombay, we think it
proper to quote the following passage at page 113 from the
judgment in the Bombay case (In re. N. F. Bhandara)
I consider that for an Advocate of this Court to
stipulate for, or receive, a remuneration proportioned to
the results of litigation or a claim whether in the form of
a share in the subject-matter, a, percentage, or otherwise,
is highly reprehensible, and I think it should be clearly
understood that whether his practice be, here or in the
mofussil he will by so acting offend the rules of his
profession and so render himself liable to the disciplinary
jurisdiction of this Court."
Mr. G argued that even if this was once the law, section 3
of the Legal Practitioners (Fees) Act, 1926,
(Act XXI of 1926)changed it and that now. every legal Practitioner
is competent to settle the terms
(1) 21 W.R. 297. (4) I. L. R. 3 Mad. 138.
(2) 4 Cal. L. J. 259. (5) 1, L, R. 1940 Mad. 17.
(3) Bom, L. R. 102 at 113
499
his engagement and his fees by private agreement with his
client. This, Mr. G said, entitles him to enter into any
agreement which the law permits in the case of ordinary
persons. Legal practitioners, according to him, are now
governed by the law of contract and not by rules imported
from other countries with different ideas and different
social customs and imposed on the Bar ha India mainly by
English Judges. We do not agree, because this Act is not
concerned with professional misconduct. That is dealt with
by the Bar Councils Act which was passed in the same year
(1926). The Bar Councils Act makes no modification in the
disciplinary jurisdiction of the High Court or of the sense
in which professional misconduct had been understood
throughout India up to that time.
The. only Indian decision which Mr. G, could quote in his
favour was Muthoo Lail v. Budree Pershad (1). But that was
not a case in which disciplinary action was being taken
against a legal practitioner for professional misconduct.
The question there was whether an, agreement which might be
objectionable on the ground of professional misconduct could
be enforced by suit. Two Bombay decisions on which Mr. G
relies are to be distinguished in the same way : Shivram
Hari v. Arjun(2) and Parshram Vaman v. Hiraman Fatu(3).
Whether these cases were rightly decided or whether they
would also be hit on the ground of public policy as Chitty
J. thought of a similar matter in the Punjab Record case, is
something which does not arise for decision here. It is
enough to say that those cases are distinguishable on the
around that the Judges there were not considering a case of
disciplinary action.
Mr. G relied on the practice in some of the American
States where an agreement by an attorney to purchase part of
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the subject-matter of the litigation is upheld. The class
of cases to which he refers are summarised in a footnote to
McMicken v. Perin(1). He relied on this to show that
contracts of this kind cannot be dismissed as reprehensible
or morally wrong. We do not propose to enter into this
because what may be
(1) I N. W. P. H. C. R. I.
(2) 1. L. R. 5 Bom. 258.
(3) I. L. R. 8 BOm. 413.
(4) 15 Law. Edn. 504 & 505.
500
harmless in one country may not be so in another. We will
however pause to observe that Rattigan J. collected a large
volume of ’American authority at pages 318-321 of his
opinion in Ganga Ram v. Devi Das(1) to show that even in
those States where this is permitted it is regretted and
frowned upon. For historical reasons obtaining there, the
practice may have come to stay however much it is regretted;
but in 1937 the American Bar Association adopted the
following canon of Professional Ethics:
"The lawyer should not purchase any interest in the
subject-matter of the litigation which he is conducting."
In India history tells the converse tale. We see no
reason why we should import what many feel if; a mistake,
even in the country of its origin, from another country and
seek to perpetuate their error here when a sound and healthy
tradition to the contrary already exists in our Bar. The
reasons for exacting these high standards in this country,
where ignorance and illiteracy are the rule, are even more
important than they are in England where the general level
of education is so much higher. We hold that the conduct of
Mr. G amounts to professional misconduct and as it was
committed in the face of the Bombay view expressed by Sir
Lawrence Jenkins in 1901 disciplinary action is called for.
Now had Mr. G been as restrained and objective in his
petition under article 32 as he was while arguing the case
before us, we might have considered a warning enough seeing
that this is the first time this question has been
considered in this Court, but, in view of his personal
attacks on the learned Chief Justice in his petition where
he has questioned his good faith and attributed malice to
him, we are not able to deal with him as lightly. We
therefore direct that he be suspended from practising in
this Court for a period which will expire on the same date
as his period of suspension in-the Bombay High Court.
There will be no order about costs.
Order accordingly.
(1) 61 P. R. (of 1907), P. 280.
501