DISTRICT JUDGE Vs. J C GANDHI

JUDGEMENT

(1.) THIS is a reference made to us by the District Judge of Broach under the Bombay Pleaders Act. He has come to the conclusion that the pleader concerned has committed professional misconduct in his capacity as a pleader. The learned District Judge came to this conclusion on certain facts which are established before him. It appears that the pleader was employed by one Sakerlal Ramjibhai in a suit which he had filed. Suit No. 187 of 1945, against the Gujarat Gur Supply Co. The suit was for accounts, the plaintiff contending that the defendant was his agent and had failed to account for the transactions which had taken place in the course of the agency. A preliminary decree was passed in that suit in favour of the plaintiff and on 29-11-1949 a final decree was passed when a sum of Rs. 20,045/12/- was found due by the defendant to the plaintiff. The decree also provided for the taxed costs of the plaintiff's pleader which were taxed at Rs. 534/ -. The pleader filed a suit, being Suit No. 146 of 1952, to recover from the plaintiff a sum of Rs. 5,011/8/- on the allegation that there was an agreement with regard to his fees between him and the plaintiff and under this agreement this amount was due. The agreement that was pleaded by the pleader in the suit was that the client had agreed to pay to him a minimum fee of Rs. 250/- and a further fee of an amount calculated at the rate of 25 per cent of the amount found due to the client at the foot of the accounts taken by the Court. Further, the amount calculated at 25 per cent was to be paid to the pleader within one month of the date of the final decree passed by the Court. The trial Court raised a preliminary issue as to whether this agreement was against public policy. It held that it was and dismissed the suit. The pleader went in appeal to the District Court and the learned District Judge confirmed the decision of the trial Court. The pleader preferred a second appeal to this Court which appeal is still pending. In the mean-while the client made an application to the learned District Judge to proceed against the pleader on the ground that he was guilty of improper conduct. The learned District Judge held the necessary inquiry and has made the reference to us which has now come up for hearing.

(2.) WHAT has been urged by the Government Pleader in support of the reference is that this agreement entitles the pleader to receive remuneration which is wholly dependent upon the result of the litigation. If the plaintiff's suit were to be dismissed, apart from the minimum fee of Rs. 250/- the pleader would not receive anything at all. If a decree was passed in favour of the plaintiff, then the fees of the pleader would depend upon the quantum of the amount decreed in favour of the plaintiff. According to the Government Pleader, it is now settled law that when a pleader charges fees on the basis of the result of a litigation, such conduct on the part of the pleader amounts to professional misconduct or improper conduct. In support of this contention reliance is placed on the recent decision of this Court reported in 'in re K. L. Gauba', 56 Bom. L. R. 838 : (AIR 1954 Bom 478) (A), which was affirmed by the Supreme Court in 'g. a Sr. Advocate of SC, In re,' 56 Bom LR 1220 : (AIR 1954 SC 557) (B ). In that case Gajendragadkar and Vyas JJ. laid down that where an advocate agrees with his client to accept as his fees or professional remuneration a specific share in the subject-matter of the litigation upon the successful issue of such litigation, the conduct of the advocate in entering into such agreement amounts to professional misconduct. In that case the advocate had entered into an agreement with his client that he would get from the client 50 per cent of the amount recovered by his client from the opponent, and the advocate contended before the Court that under Section 3, Legal Practitioners (Pees Recovery) Act it was open to him to charge any fees which he thought proper. The contention was that the quantum of fees was a matter of contract between the lawyer and the client and the Court had no authority or power to interfere with that contract. That argument was rejected by this Court and the Court pointed out that there was no complete freedom of contract as between the lawyer and his client. Every contract was subject to the provisions of Section 23, Contract Act and that section had equal application to a contract entered into between a lawyer and his client and if the contract between the lawyer and the client was opposed to public policy that contract could not be given effect to and the Court held that in that particular case the contract was against public policy and therefore the contract was not enforceable, and the advocate having entered into a contract which was against public policy was guilty of professional misconduct. When the matter went to the Supreme Court the learned Judges of the Supreme Court upheld the decision of the High Court, taut on a much simpler and broader ground They took the view that every lawyer was bound by principles of professional ethics and he could not enter into any contract which contravened any principle or tenet of these ethics and therefore the Court came to the conclusion that in entering into this agreement if the advocate had failed to conform to the traditions and standards of the profession the lawyer would be guilty of professional misconduct irrespective of any question of the contract being bad on the ground of public policy. Therefore, in every case which we have to consider where a pleader has entered into an agreement with his client with regard to the payment of fees, what we have to consider is whether in entering into that agreement he has departed from the traditions and standards which the legal profession expects from him. If he has violated any principle or tenet of professional ethics, then the Court will come to the conclusion that he has entered into an agreement with regard to the fees to be paid to Him by his client which violates the standards of the profession and therefore he is guilty of professional misconduct.

(3.) A distinction was sought to be made by Mr. Shah between the case which Gajendragadkar and Vyas JJ. decided and the case before us. It is said by Mr. Shah that the case which that Division Bench was considering was a case where the lawyer had stipulated to receive a certain share in the actual recovery made by the client, and Mr. Shah says that whenever there is such an agreement it is clear that the lawyer is guilty of professional misconduct. But Mr. Shah says that in this case the agreement is not to share in the recovery. The fees of the lawyer do not depend upon whether the plaintiff recovered the amount of the decree or not. As a matter of fact, the agreement provides that the amount of the fees are to be paid within one month from the date of the final decree, and therefore according to Mr. Shah the principle in 'in re Gauba's case', (A) does not apply to this case. We refuse to accept that contention. The principle laid down by Gajendragadkar and Vyas JJ. and which was confirmed by the Supreme Court is much wider and much more important than its actual application to the facts which were before the Court. The principle that was laid down was that it is essential in the interests of administration of justice and in the interests of the legal profession itself that the lawyer must, while conducting the litigation of his client, observe a certain objectivity and detachment which are necessary for-the proper conduct of the litigation and it the lawyer becomes interested in the result of the litigation he loses both his objectivity and his detachment. He puts himself in the same position as the litigant and although formally appearing as a lawyer and arguing for his client, for all practical purposes he is no better than and no different from the litigant himself. If that is the true principle to be deduced from that decision, that principle applies whether a lawyer contracts with his client to receive a certain percentage of the money actually recovered in the litigation or contracts with his client to recover a certain percentage of the decretal amount. In both cases it can be said that the lawyer is interested in the litigation. His fees depend upon the result of the litigation. In a sense also he is speculating on the litigation because it is uncertain whether he would get any fees, and if he would get fees what the quantum of the fees would be. It may be said that ordinarily a lawyer should fix his fees at the time when he is engaged by his client. He would know the work which Be would have to do for his client and he can charge the lees according to what the law permits on taxation or higher fee's if he thinks that his status at the Bar or the complexity of the case demand that he should charge a higher fee. But ordinarily it must always be improper for a lawyer to leave the determination of the fees till the conclusion of the litigation or to leave the determination of the fees dependent upon how the litigation fares. If we were to apply that principle to the facts of this case, at first blush it may appear that the pleader has no answer to the charge that was levelled against him and, as the learned District Judge holds has been proved, except for the minimum amount of Rs. 250/- he has not fixed the amount of his fees when he was engaged by his client. He was not sure at all as to whether he would get any additional fees beside the sum of Rs. 250/- because if the suit was dismissed he would get nothing more. Even if the suit was decreed he did not know what his fees would be because it would depend upon the quantum of the decretal amount. Therefore, in undertaking this litigation it may be said that he was speculating as to what remuneration he would get at the end of the litigation, and he also allowed himself to be interested in the result of the litigation because his remuneration would depend Upon the success or failure of the litigation.