9911796707
TMI Blog1954 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... reof exemption from such taxation. No attorney has claimed such privilege before in the history of this High Court. I am not aware of any attorney elsewhere in India has claimed similar privilege. 2. The applicant Bhogilal Hargovindas Patel, a director of Renwick Co. Ltd., has taken out this summons for an order upon his solicitors Messrs. Sandersons Morgans directing them to prepare and submit a proper bill of costs for all works done by them in connection with or relating to the litigation mentioned in the petition both in and outside the Court for taxation and for investigation and determination of proper charges by the Taxing Officer of this Court. The summons also asks for an order that the Taxing Officer do tax such costs in accordance with the Taxation Rules of this Court and certify what should be due to or from either party in respect of the said hills. The respondent is a firm of solicitors Messrs. Sandersons and Morgans. No actual order for payment is sought on this summons. 3. The dispute between the client and the solicitors arises in respect of four bills. The first bill is dated 16-8-1950 for the sum of ₹ 7526-7-0 covering a period from 16-9-1949 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gwandas Papatlal Shah and Mohanlal Lalluchand Shah and all other applications in such winding up proceedings or in the suit will be dismissed, each party to pay his own costs. Clause 18 of the terms of settlement provides, each party to pay his costs . Clause 19 of the terms of settlement provides for liberty to apply . It will, therefore, be seen that the suit and its proceedings and the winding up application and the proceedings thereunder ended on 3-12-1951, so that they cover between themselves a period from 18-2-1951 to 3-12-1951. 6. The defence of the solicitors is three-fold: Their first defence is that this Court has no jurisdiction to order taxation of these bills on a summons. Their second defence is that there is a special agreement to protect their charges. Their thud defence is that payments having been already made no question of taxation arises. 7. I will take up the, first defence of jurisdiction. Mr. K.P. Khaitan, learned counsel for the solicitors, advanced a number of arguments in support of his proposition that this Court has no jurisdiction to order taxation of these bills on a summons. His first submission is that there is no inherent right in Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the Indian authorities which may be briefly noticed. These Indian decisions are -- 'Ramdoyal Serowgie v. Ramdeo', 27 Cal 269 (F); -- 'Ibrahim Mallick v. Lalit Mohan Roy ; -- 'Saw Hla Pru v. Maung Po Htin', AIR 1931 Rang 104 (H); -- 'Ramjash Agarwalla v. Orr, Dignam Co. ; -- 'Shiv Narain Jafa v. Judges of Allahabad High Court', AIR 1935 PC 176 (J); -- 'Bijon K. Nawn v. Sudhir Nawn ; -- 'Ordhendra Coomar Gangoli v. Hrishikesh Chatterjee ; -- 'Gitarani Debi v. Mooira Debi', 54 Cal WN 764 (M) and the latest Full Bench decision -- 'In Re, An Attorney', (S) . Most of these cases are irrelevant on the point of issue as to whether this Court has jurisdiction to order taxation on summons of on Attorney's bill where the Attorney pleads special agreement. But even among those cases referred to by Mr. Khaitan, at least two decisions are definitely against him on the point of jurisdiction, one being the case of -- 'Brojendra Nath Mullick v. Luckhimoni Dassi', 29 Cal 595 (O), and the other being '54 Cal WN 764 (M)'. I will immediately state the effect of these two decisions. 11. The decisions of '29 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of this kind with great suspicion. The matter may turn out to be perfectly fair and right, still it exposes the conduct of the Solicitor to suspicion and naturally awakens the vigilance and jealousy of this Court, seeing that one party has all the knowledge and the other is ignorant. I need not go into further authorities on this point. 12. In the case of '54 Cal WN 764 (M)', the learned Judge expresses the view that the rights of Solicitors in India are the same as the rights of Solicitors in England under the common law except as modified by the statute and learned Judge notes that there were no Solicitors Acts in India as in England, a point which has been emphasised again in the recent Full Bench decision. The conclusion therefore is that Indian Statutory modification if there be any, will apply. But where there is no Indian Statute, the English law and practice, as administered by the Courts in England under their inherent jurisdiction are attracted. 13. The English Courts have exercised their inherent jurisdiction to order taxation even quite apart from the Solicitors Acts that exist there. Scrutton L. J. -- 'In re; Foster 1920-3 KB 306 at p. 314 (B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is a great deal of doubt about it and it is sufficient for us to say that the case ought to be enquired into. That being so my brothers and I think the right order will be 'to let the order of Mr. Justice North stand', but to add to it a direction that the Taxing Master is to certify whether the agreement was fair and reasonable, which I cannot do without taxing the bills. 16. The latest decision in the House of Lords in -- 'Myers v. Elman, 1940 AC 282 (W), also contains many observations in the different speeches of the Law Lords referring to the inherent jurisdiction of the Court over solicitors, Lord Wright at p. 319, speaking of the summary procedure observes: This summary procedure may often be invoked to save the expense of an action. My study of the English authorities leads me to the conclusion that the English Courts have always exercised an inherent jurisdiction over the solicitors practising before them in the matter of having their bills of costs taxed quite independently of any statutory right under the Solicitors Act in England. That is also I find how the practice is stated in 31 Halsbury, Hailsham Edn. pp. 182-3 Article 214. 17. In this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Rule makes no special exemption in favour of any of fees on the ground that such bills are covered by special agreement between attorney and client and therefore immune from taxation, Indeed this Rule says, all bills of fees and costs without exception. The proceedings in this matter arose on the Original Side of this Court, one in the suit and one in the company jurisdiction, but both on the Original Side and therefore covered by this Rule 4. The attorney, therefore, cannot claim immunity from taxation in this case under Rule 4. 20. Here incidentally reference may be made to Rule 5 of Chap 36 which gives plenary power to this Court 'at any time to determine the scale upon which the costs are to be taxed. It is true that this Rule 5 assumes that the costs are such as can be taxed and it is only then that the Court can determine the scale. I have already said that both under Rules 2 and 4 such costs of the attorneys as are in controversy in this application are liable to taxation. This Court therefore under Rule 5 has power to determine the scale upon which such costs are to be taxed and say that the costs are to be taxed according to the Rules of this Court. 21. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reasonable cause the Court or Judge can always call on the attorney to show cause why such costs should not be allowed as between Attorney client. This is a case where I hold that the costs have been improperly or without any reasonable cause incurred and the excessive costs should be disallowed. In order to do that the first obvious step necessary is to order taxation of the bills of the Attorneys in this case. 25. Indeed, the only Rule on special agreement is Rule 32 (4) of Chap 36 in respect of Counsel alone even in that case such excess must be covered by written authority of the client or his agent to pay such higher fees, unless specially allowed by the Court itself. 26. The entire body of Rules of Chap 36, Original Side Rules does not mention any case of a special agreement between Attorney and client whereby the Attorney can charge higher fees and remuneration than those specified in the Schedules therein, The principle is clear why the Attorney's special agreement with client is not recognised by the Rules. If such a special agreement between Attorney and client were to give immunity to an Attorney from taxation, then the whole of the taxation rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment by which a legal practitioner may settle his fees for professional services and (2) Section 4 of that Act says any such legal practitioner shall be entitled to institute and maintain legal proceedings for the recovery of any fee due to him under the agreement , therefore no application by client on a summons for taxation against a legal practitioner which includes an Attorney , can any longer be entertained by this Court where the Attorney pleads special agreement. 28. This argument suffers from many obvious defects. Its primary defect is that it completely misunderstands the object of the Legal Practitioner's Fees Act (Act 21) of 1926. That Act as its preamble shows is only an Act to define in certain cases the rights of legal practitioners to sue for their fees and their liability to be sued in respect of negligence in -the discharge of their professional duties. It therefore has nothing to do with the citizens or the clients' rights against the legal practitioners. Secondly, the preamble speeks of certain cases not of all cases. It is therefore necessary to carefully determine what those certain cases are under this statute. By Section 3 of this Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is any thing repugnant in the subject or context . This definition is expressly made only for the purposes of this Act of 1926. A legal practitioner in Section 3, Legal Practitioner's Act of 1879 means inter alia an attorney of any High Court. But the whole of the Legal Practitioner's Act, 1879 consisting of 41 sections contains only one provision relating to attorneys and that is Section 5. That is only a provision entitling the attorneys to practise in all Courts subordinate to the High Court and in the Revenue Offices situated within the local limits of the Appellate Jurisdiction of such High Court but expressly excludes their practice in the High Court. Even there the High Court is specially empowered to make rules for such attorneys practising in the subordinate courts as legal practitioners declaring then function, powers and duties. The rest of the Act does not concern the attorneys at all. Chap 3 of the Act deals only with pleaders and muleteers, Chap IV with Revenue agents, Chap 5 with certificates, Chap 6 with the remuneration of pleaders, mukteers and Revenue agents and Chap 7 with penalties. Section 27 regulates the fees payable by any party in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, Legal Practitioners' Fees Act, 1926 conclusively proves that agreements with clients mentioned therein were agreements confined only in respect of fees in the subordinate courts and not elsewhere or other fees. While on the historical antecedents of legal recognition of private agreements with clients for fees, the ancient law as contained in Section 8, Legal Practitioner's Act (Act I) of 1946 regarding appointment and remuneration of pleaders in the courts of the East India Company was private agreements between parties and their pleaders respecting the remuneration to be paid for professional services shall not be enforced otherwise than by a regular suit . What was law for the pleaders in the Courts of East India Company is no longer the law for attorneys of this High Court in the year 1954. The requirement of suit as the only remedy has been swept away by the Legal Practitioner's Act, 1879 and their Fees Act of 1926. Section 4, Legal Practitioners' Fees Act, 1926 gives the right to institute and maintain legal proceedings but does not say that fees cannot be recovered on an agreement except by a suit. I cannot, therefore, help feeling that Mr. Khaita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case. Here again there is a good deal of confusion which requires to be cleared up. The crucial point is not the distinction between proceedings in Court and works outside the Court. In other words, the crucial distinction is not what has been said to be a difference between contentious and non-contentious work. The law draws a difference only between professional and non-professional charges. The law of taxation, as I understand it, is that the Court has no jurisdiction to order taxation for non-professional work done by the Attorney or where the Attorney charges remuneration for work not done in his professional capacity. There are numerous cases in English law to illustrate this difference and the best one to my mind is the observation of Lord Langdale in -- 'Alien v. Aldridge', (1844) 5 Beav. 401 (Z), where His Lordship said: The business connected with the profession of a Solicitor, the business in which the Solicitor is employed or in which he would not have been employed if he had not been a Solicitor. For instance, the Court has declined to order taxation when the Attorney did some work as clerk to a local board as in -- 'Bush v. Martin' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing his costs under the terms of settlement, such taxation as could be in contemplation by this provision in the Consent Decree were costs between a party and his Solicitor. The respondent firm of Solicitors, Messrs. Sandersons Morgans were parties to this Consent Decree. The words if necessary in this provision of the Consent Decree cannot obviously mean where both the party and his own Solicitor agree. They obviously mean that if either the party or his Solicitor considers it necessary or if the Court considers it necessary. This much is certain that party and his Solicitor by this provision in the Consent Decree definitely agree to the taxation of the costs in the suit and if the words if necessary are to be given the meaning that if either the party or the Solicitor does not consider necessary, then there will be no taxation, the result will be unworkable and the consent to taxation will be rendered illusory. There is another way of looking at it. Now the Solicitor says in this case that taxation is not necessary because there was special agreement with the client. But I have held that the special agreement is not a ground to resist taxation. The Solicitor's gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the said terms as appearing in the Consent Decree should be read as a whole and the words mentioned in the said terms mean therefore not only the costs of the suit but also of the winding up proceedings, on a proper, fair and reasonable interpretation of the Consent Decree, 36. So far as the costs which the Attorney is charging for works not falling within the suit or the winding up proceedings, neither the Consent Decree nor the terms of settlement therein cover them, and it has not been argued either that they do so. The order sought to tax such, costs is on the ground that they are costs charged by the Attorneys for the works done in their professional capacity -- a point which I have just determined. 37. For all these reasons I am satisfied that the present Summons for taxation is not only competent but also is the proper proceeding and client need not be driven to a suit to agitate for his remedy Our own Rules on the one hand and the general practice in England (apart from English Statutes) attracted expressly by our Rule 2 of Chap. 36 of the Original Side Rules permit such Summons and that even the question of special agreement has been and can be referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut stated that money was no consideration to him and that Messrs. Sandersons Morgans should do all that lay in their power to deal with this work in the utmost speed and expedition even though the same might involve dislocation of their routine work as well as their other commitments. 40. This plea of special agreement is totally disputed and denied by the affidavit of the applicant who says that he never entered into such agreement. But that is not the point. The point is that here is an attorney solemnly pleading a special agreement with client. But what does he say in effect? He really says nothing except pleading the vaguest generalities. Not a single term of this special agreement can be found in the affidavit of Basil Gill. Except stating that Messrs. Sander-sons Morgans have special scale of charges ', and that the usual charges of the firm are in some respects higher than those laid down in the Rules of the High Court, the attorney says nothing else. I should have thought that such a pleading does not even amount to sufficient averment in law of any special agreement. What is the special scale of charges , What are the firm's usual charges , in what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A special agreement must at least contain the major terms and identify the rates of charges with the classes of work done. Common sense requires it, bare justice to the client who pays the money demands it and the most elementary fairness insists on it. In England the Solicitors Act provides for it and Codery's Fourth Edition of the law relating to Solicitors at p. 332 clearly puts the proposition by saying; The agreement should contain all the terms and identify the costs. Law has always regarded attorney's special agreement with client with great jealousy and is stated, in 31 Halsbury, Hailsham Edition, page 165, Article 199 in these terms: Such an agreement was not necessarily unenforceable under the general law as distinct from statutory law though a Court would have viewed it with great jealousy and would have been slow to enforce it, where it was favourable to the solicitor, unless satisfied that it has been made in circumstances precluding any suspicion of an improper attempt to gain a benefit at the client's expense. 41. Dialectics on freedom of contract have been freely and liberally employed in arguments on behalf of the attorneys. Freedom of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time when the first bill was being paid. With the payment of this ₹ 4526-7-0 on 26-8-1950 the first bill of the solicitors for ₹ 7526-7-0 was completely paid off. On the second bill for ₹ 28,876-l-6 there are three letters one dated 23-6-1951 from the solicitors to the client and the other dated 16-7-1951 from the client to the solicitor, and the last one dated 17-11-1951 from the solicitor to the client. In the letter of 23-6-1951 the solicitors enclosed their second bill showing a balance due to them by the client of the sum of ₹ 28,876-1-6. In this letter the solicitors pointed out that the counsel's fees for that period had not been included in that bill but would be charged in a subsequent bill after you have settled the matter with counsel as arranged. Client's, letter of 16-7-1951 shows that he was enclosing a cheque for the sum of ₹ 28,876-l-6 on the Central Bank of India Ltd., in full payment of this bill. The third letter dated 17-11-1951 from the solicitor to the client is important because by then the dispute between the attorney and the client had started, and this letter of the attorney dated 17-11-1951 shows that they are se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations that they had been correctly made out. That is ft material circumstance to note in which the payment of the first two bills took place. 59. In this letter of the client dated 8-7-1952 he concludes by saying: I, therefore, request you to submit your proper bills of costs giving full details of your in-pocket charges in respect of matters covered by our bills Nos. 2384/50, 1754/51, 2588/51 and 711/52.' This means that the client asked for proper bills in respect of all these four bills submitted to the client. 60. The concluding paragraph of the client's letter dated 6-7-1952 ends by saying: According to me a large sum of money would be found refundable to me by you and the amount of your cheque for ₹ 4796-1-6, enclosed with your letter of 7-4-1952 has been taken in part satisfaction of my claim against you which kindly note. To emphasise again, this important letter was not answered by the attorney. 61. There are two other letters to which reference may be made to complete the record on this point. The first letter is dated 25-7-1951 from the attorneys to the client. No special agreement with client is pleaded in the letter at all. This lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmed the decision of 4he Court of Appeal with a slight variation. There the parties to an action agreed to a compromise upon the terms that the defendants should pay the costs of all parties as between solicitor and client in relation to the plaintiff's claims against the defendants. The plaintiff paid the solicitors their bill of costs and claimed the amount from the defendants who then took out a summons for a reference to the Taxing Master to tax the plaintiff's costs in accordance with the agreement of compromise. The plaintiff's solicitors opposed the application on the grounds first that the bill had been paid and secondly that questions would arise on the construction of the agreement which ought to be decided in an action and not by the Taxing Master. Both these objections were overruled and the House of Lords did make the order for taxation. 65. There is another authority of the English Court of Appeal constituted by Cozens Hardy M. R., Buckley and Kennedy L. JJ. 'In re Brockman', 1909-2 Ch 170 (Z7), from the facts of which it appears that even after the statutory period of time under the English Solicitors Act had expired, the client can apply f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls in this case to be an Attorney's bill at all. Guidance as to what an Attorney's bill should be, can be had from Rules 17 and 20, Chap 36 of Original Side Rules. There it is expressly provided that every bill of costs shall be properly dated throughout and shall show in a separate column all moneys paid out of pocket. Every bill of costs shall be accompanied by vouchers regularly numbered and reference to the corresponding numbers given in the bill itself and every item of disbursement and the cause thereof shall be distinctly specified. No payment out of pocket will ordinarily be allowed except on production of the appropriate voucher, or in case of Counsel's fees, without the signature of counsel that the fee has been paid. Judged by this standard, the present bills of the Attorney in question are miserably inadequate. Quoting the well-known observation of Chief Justice Tindal in -- 'Waller v. Lacy', (1840) 133 ER 245 ,(Z9), quoted with approval by S.R. Das J. in-- 'Kamala Ranjan v. Bepin Behari Sadhukhan , I say: These charges by themselves are not intelligible to the officer of the Court. An Attorney's bill, generally speaking, ought to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves, the fact of payment by the client is no, bar to order of taxation sought by him on this Summons. 71. Some argument has faintly been put forward, although intermittently in the course of the arguments on behalf of the Attorneys, relying on client's certificates for good work done in this case and given to the Attorneys. That argument suffers under a misapprehension of the nature of these certificates. It is not canvassed before me in this application that the work done by the Attorney has been unsatisfactory. The controversy is over the rates of fees charged. The certificates are certificates of good work, not certificates for high rates. 72. I therefore direct the respondent Messers. Sandersons Morgans to prepare bills for their charges in strict accordance with the Rules of this High Court and I further direct that such bills when prepared must be submitted for taxation by this Court. Such bills must be prepared and submitted for taxation by Monday 20-12-1954. I also direct the Taxing Officer to tax such bills in accordance with the Rules and practice of this High Court. 73. There will therefore be an order in terms of the Summons. The respondent will pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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