K L GAUBA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THIS is an application under our disciplinary jurisdiction against Mr. K. L. Gauba. It came to the notice of this Court that Mr. Gauba, who is an advocate of this Court, had entered Into an agreement with his client, one Amarnath Bhardwaj, which appeared to be champertous and this Court took the view that the circumstances under which the said agreement had been entered into and the terms of the agreement itself called for an investigation under the disciplinary jurisdiction, and so it was decided to refer this case to the Bar Council. Accordingly, on May 1, 1953, the learned Chief Justice appointed three members of the Bar Council to constitute a Tribunal under S. 11 of the Bar Councils Act for inquiring into this case. Notice of the intended inquiry was served on Mr. Gauba in due course. He appeared before the Bar Council Tribunal, gave his explanation on July 10 and filed an additional statement on August 6, 1953. The matter was then heard by the Members of the Tribunal and they made the report on December 16, 1953. The Tribunal has held that the respondent had entered into an agreement with the client that he should be given half of the profits of the litigation in case of success and this in the opinion of the Tribunal amounted to professional misconduct. After this report was received, notice of the hearing of the present application was served on Mr. Gauba and the matter has thus come before us for final disposal.

(2.) THE agreement which has given rise to these proceedings was entered into between the respondent and his client Amarnath on December 20, 1952. This is what the client wrote to the respondent:

(3.) IT may be convenient to mention a few facts relevant to this agreement. It appears that on July 23, 1951, Mr. Amarnath, the client, had entered into an agreement with the Baroda Theatres, Ltd. , to work in their production for a remuneration of Rs. 15,000. Out of this amount of agreed remuneration the client had received only Rs. 3,000 and the balance of Rs. 12,000 still remained to be paid. The client demanded this balance from the Baroda Theatres, Ltd. The claim of the client to the extent of Rs. 9,400 was admitted and in fact a cheque for Rs. 2,000 towards part-payment was issued by the Baroda Theatres, Ltd. , on October 15, 1952, but it was dishonoured on December 15, 1952. A notice was then served on the company by the client's attorneys, Messrs. Nandlal and Co. , on December 17, 1952. It was at this stage that the client approached the respondent on December 20, 1952. He was accompanied by Mr. Kavish, who happened to be acquainted with the respondent. The client explained his case to the respondent and pleaded that he was keen on taking immediate action against the company because he was apprehensive that the company might recover amounts due to them from their distributors and may eventually refuse to pay his balance to him. He was, therefore, anxious to take immediate action in order to safeguard his rights and he inquired what the respondent's fees would be for a suit in the City Civil Court for Rs. 9,400. The respondent told him that the out of pocket expenses for the suit and for a motion for attachment before judgment would be about Rs. 750 to Rs. 800, and that he would charge all-told Rs. 1,250 as his professional remuneration. The client pleaded his inability to pay the respondent his fees at that time, but urged that he was very keen on engaging the respondent's services. He gave the respondent a graphic account of his financial difficulties and urged that it was utterly impossible for him to pay the fees or the expenses of the civil suit as mentioned by the respondent. The client earnestly appealed to the respondent to take his fees out of the realisations of his claim, adding that his claim was genuine and not bogus or false. The respondent yielded to the appeal of the client, but told him that the client would have to find a part of his fees immediately and that the expenses of the suit could not be put off. The client then expressed his total Inability to raise anything more than Rs. 200 and again appealed to the respondent to take up his cause. The respondent then explained to the client that an alternative and cheaper remedy available to the client would be a winding up petition. The client was told that though this alternative remedy was cheaper, there was no certainty as to the amount which would ultimately be recovered in a winding up petition, since the other creditors of the company would claim their share in the company's assets. The client then stated that he would prefer to adopt this alternative remedy and he begged the respondent again and again to take up his case on the basis that whatever was recovered from his debt, the respondent might recover half towards his fees for his labours. The respondent was reluctant, but ultimately out of compassionate motives he agreed. The respondent then asked the client to put down the proposal and its terms in his own words and that is how the agreement in question came to be executed.