RD Saxena Vs Balram Prasad (AIR 2000 SC 2912)

(Whether the advocate can have a lien on the litigation papers entrusted to him by his clients for pending fees?)

FACT OF THE CASE:- The appellant was appointed as a legal advisor to the Madhya Pradesh State Co-operative Bank Ltd. (herein referred to as ‘Bank’) in 1990. He used to conduct cases on behalf of the said bank. Subsequently, on 17.7.1993 the bank terminated the retainers of the appellant; and requested him to return his files related to the bank. Instead of returning the files, he informed the bank that only after dues amounting to rupees 97,100/- were paid will he return the files.

Hence, the Bank filed a complaint before the State Bar Council of Madhya Pradesh on 3.2.1994.

BAR COUNCIL OF MADHYA PRADESH:-  wherein the appellant contended that he has a right of lien on those files; whereas the respondent contended that the appellant is guilty of professional misconduct by not returning the files to his client. Subsequently, the matter got transferred to the disciplinary committee of Bar Council of India;

BAR COUNCIL OF INDIA:- wherein the appellant was held guilty of professional misconduct and was imposed a fine of rupees 1000/-; and debarred him from practicing for 18 months; and was directed to return all the case bundles of the client without any delay. Therefore, the advocate/appellant filled for the appeal before the Supreme Court.

ISSUES BEFORE SUPREME COURT:-

Whether the advocate can have a lien on the litigation papers entrusted to him by his clients for pending fees?

ARGUMENTS

Arguments by the appellant:

(1) The failure in the part of the Bar Council of India for not considering the defense of the appellant; wherein he was having a lien over the files for unpaid fees dues due to him has resulted in the miscarriage of justice.

(2) Section 171 of the Contract Act, 1872 clearly states that; “Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as security for a general balance of the account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them unless there is an express contract to that effect”; and hence he can have a lien on litigants paper.

Arguments by the respondent:

(1) After the termination of engagement with the client, an advocate cannot retain the files and can have no lien over it.

Judgment:-

Rule of Law-

Section 148 of the Contract Act defines the bailment which states that; if the goods are transferred from one person to another for some purpose; and after completion of the purpose the goods have to be returned to; or otherwise disposed of according to the directions of the person delivering them then such transfer can be termed as a bailment. But in this case, the goods are not bailed to the appellant/advocate as there was no delivery of the goods; because the advocate owned paper on his account. 

The term ‘goods’ has to be understood in the sense of the Goods and Sales Act, 1930 wherein section 2(7) states “every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.” 

Thus the goods which fall in the purview of section 171 should have marketability i.e. they should be saleable.The case files in the present case are neither saleable nor can be converted into money; hence section 171 is of no merit.

The divisional bench of Madras High Court in the case of P. Krishnamachariar Vs. The Official Assignee of Madras; held that an advocate could not have such a lien; unless there was an express agreement to the contrary; and the same view was held by the Patna High Court in In RD SAXENA Vs BALRAM PRASAD, advocate in the matter of Misc. Judl. Case No. 18/33  

After the enactment of Advocates Act, 1961 the Bar Council of India framed the rules in which Rule 28 and 29 explicitly states that ‘if any sum is remaining in the hands of an advocate then he is at liberty to appropriate the same after the termination of proceeding’&‘if the fees have been unsettled then the advocate can deduct it from the client’s money in his hand and rest should be refunded to the client’s’respectively.

Reasoning-

India is a country having vast illiterate population; and asking them to have a lien on the litigation papers will lead to the exploitation of those very clients. A litigant has the freedom to change his advocate and the same should be disposed of while returning the files. The criminal accused has also a fundamental right of choice as per Article 22(1) of the Constitution of India; and in the State of Madhya Pradesh v. Shobharam&Ors; the court observed that the choice; herein referred to is the choice to change the advocate engaging in the same case. An advocate must return the file to the client to get the file returned.

Section 35 of the Advocates Act pertains to misconduct; and accordingly, the refusal of an advocate to return the file of the client comes under the ambit of professional misconduct. Therefore, he is liable for the same punishment. However, here the appellant had a bona fide belief that; he did have a lien and such presumption pertains to restricting harsh punishment on the appellant.

 

SUPREME COURT DECISION:- In the Punishment, will be altered to reprimanding the appellant. However, if any person commits this type of professional misconduct in the future; then Bar Council will determine respective punishment; and the lesser punishment imposed in this case should not be taken under the ambit of precedent.

Conclusion:

The decision laid by the Supreme Court is of prudent nature and the judgment is done away with all the relevant laws and precedents. The relation of client and counsel is based on trust and hence presumes a fiduciary relationship; therefore the same should be respected throughout the existence of such a relationship. The ordinary perspective presumes that there should be a prior agreement between the council and the client; wherein it should be stipulated that the client will pay a certain amount as legitimate fees; which will help in meeting counsel’s later hardships. An example would suffice the same, suppose a person is hospitalized; and the same person has to be shifted to any other hospital due to lack of facility in the former hospital.

Therefore, in such a case, it would not be correct if the hospital takes a lien on such medical report; until the dues are paid as the later hospital ought to have a glance on the previous reports for further medication; the same process will go in the attorney’s lien. By having such lien one cannot play with the justice system. Considering such hardships of the attorney about claiming the dues, the Advocates Act, 1961; makes a right for the advocates to retain the property if any entrusted to him as per Rule 28 & 29. This very rule gave a tooth to the attorney’s rights.

For initiation of lien, there is a requirement of possession that ought to happen in the case of bailment. For a bailment, there should be a transfer of goods, now a lien on the case file is not considered as a good; because it does not have marketability in the legal sense. A person cannot sell one client’s case files to another client for the sake of marketability. Hence, it will be considered bad in law and which would ultimately lead to professional misconduct.

UNDERSTAND YOUR CASE IN SHORT:- The appellant was appointed as a legal advisor to the Madhya Pradesh State Co-operative Bank Ltd. (herein referred to as ‘Bank’) in 1990. He used to conduct cases on behalf of the said bank. Subsequently, on 17.7.1993 the bank terminated the retainers of the appellant; and requested him to return his files related to the bank. Instead of returning the files, he informed the bank that only after dues amounting to rupees 97,100/- were paid will he return the files.

Hence, the Bank filed a complaint before the State Bar Council of Madhya Pradesh. From State Bar Council of Madhya Pradesh the case was transferred to Bar Council of India. wherein the appellant was held guilty of professional misconduct and was imposed a fine of rupees 1000/-; and debarred him from practicing for 18 months; and was directed to return all the case bundles of the client without any delay.Therefore, the advocate/appellant filled for the appeal before the Supreme Court.

Supreme court observed that the goods which fall in the purview of section 171 should have marketability i.e. they should be saleable. The case files in the present case are neither saleable nor can be converted into money; hence can not have lein. 

Bar council of India did not hear about the right of lien of the appellant and gave the punishment. Therefore punishment was altered to reprimanding the appellant by Supreme  court. However, it was stated by the court that if any person commits this type of professional misconduct in the future; then Bar Council will determine respective punishment; and the lesser punishment imposed in this case should not be taken under the ambit of precedent.