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TMI Blog1933 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... iting to the plaintiff on 29th August 1928, the defendants state that they entered appearance in the suit on the plaintiff's instructions and on the plaintiff's undertaking to pay the costs. In subsequent correspondence, the plaintiff states that he does not agree with the defendants' version of the circumstances in which they entered appearance on Gregory's behalf. On 6th February 1925 the parties to Suit No 1302 arrived at a compromise, and, in a letter of that date, Gregory informed the defendants of its terms. The letter is as follows: 6th February 1925. Messrs. Morgan and Co., Solicitors, Calcutta. Dear Sirs, Suit No. 1302 of 1925 O O.C. Jn, Calcutta H. C. Lala Raghumal Khandelwall v. Myself and Ray Bahadur Damodar Das A. settlement has been made between me and Lala Raghumal in this case on the following terms: Lala Raghumal will pay my costs and any amount still due on account of interest and obtain a discharge from Ray Bahadur Damodar Das on my behalf in Suit No. 8629 of 1921: Myself v. Lala Raghumal and another. On Ray Bahadur Damodar Das certifying the payment of costs to me, etc., by Lala Raghumal, as mentioned abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar sum due from him in respect of costs payable to the defendants in terms of the letter of 6th February 1925. On the basis of this set-off, he claims the sum of ₹ 1,300 paid to the defendants on 31st August 1928. The case for the defendants is set out in para.3 of their written statement. Therein they admit having received the sum of ₹ 1,300, but deny that they are liable to pay it to the plaintiff. They go on to my that the sum was appropriated by them towards their general balance of account, and that they made the appropriation as the plaintiff's solicitors having a lien on the money and/or as creditors of the plaintiff. They further allege that the plaintiff accepted the appropriation. They admit having offered to give credit to the plaintiff for the sum of ₹ 400, bub they state that they did so purely with a view to arrive at an amicable settlement and deny their liability to account for it. They say that, on the balance of account, there is now ₹ 775 owing, for which they ask for a decree. 5. The first point that has been raised by the defendants is that the plaint discloses no cause of action. The defendant's counsel points out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the defendants as regards the admission. It appears quite clear that the offer to give the plaintiff credit for ₹ 400 was merely made in order to arrive at an amicable settlement, and was, in fact, without prejudice to the defendants' right to dispute their liability to the plaintiff in respect of this sum. 7. I now have to consider the claim of the defendants to be entitled to retain this sum of ₹ 1,300 as against the general balance of the plaintiff's account. Although, in the plaint the defendants claim to retain that sum as the plaintiff's attorneys or alternatively as his creditors, the latter aspect of their relationship has not been pressed. Learned counsel for the plaintiff states that the defendant's claim had become barred by limitation when the written statement was filed. Looking into the statement of account, that prima facie appears to be so, and the defendants have not sought to argue that their claims as creditors were not then barred by limitation. It must therefore be kept in mind that the defendant's claim to the money is based purely on their rights as attorneys, and I need not consider their position as creditors eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he solicitor and his client are involved. Most of the reported cases are concerned with the solicitor's right to his lien, either over a fund paid into Court, or property in the hands of a Sheriff. It is clear that this particular lien is of no assistance to the defendants in the present case, because, as regards sums which were due in respect of the two suits, to which Gregory was a party when the ₹ 1,300 was paid to the defendants, the plaintiff admits that he must give them credit by reason of the terms of the letter of 6th February 1925. It is immaterial whether the solicitors acquired their rights under their particular lien or under the terms of the letter. 10. There remains to be considered the third lien, namely the passive or retaining lien. Mr. Sinha first argued that this lien has never existed in India. I do not agree with this submission, beoause I consider that the judgment of Marten, C. J., to which I have referred, lays down that an attorney in India has all the rights as regards lien which a solicitor has in England except those rights which depend on statute. It seems to me that the attorneys, who practised before the Supreme Court, had this right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lient's moneys in his hands. 13. I was inclined at one time to take the view that, whereas with regard to funda in Court and the like, a solicitor has only a particular lien, the position is different when the solioitor has obtained possession of the fund, and that once possession has been obtained, the solicitor is entitled; to treat the money in his possession in the same way as documents belonging to his client, and oan refuse to pay it over to his client as long as any amount is owing to him. This would of course in fact amount to applying the money in liquidation of the general account. However a reference to one of the oases referred to by the author of the text-book, to which reference has just been'made, has convinced me that this view is erroneous, and that a solicitor has no greater rights over money which is the fruit of his exertions when he obtains possession of it than he has when it is still in the stage of being on deposit in Court. The case in Mackenzie v. Mackintosh (1891) 64 LT (ch) 318 on appeal 706 and the proceedings in the Court of the first instance are reported in 64 L T (Ch.) 318. In that case the plaintiff had a charge over the proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But there are oases which applied the direction to funds not in Court and on principle it seems to me that the rule must be the same. 14. It is clear therefore that Kekewich, J., thought that there was no difference between a fund in Court and a fund of which the solicitors had obtained possession. However he then proceeded to consider the correspondence in the case, and came to the conclusion that, on the correspondence, the solicitors were entitled to a general lien. It is dear that apart from the correspondence, he would have held that the solicitors were only entitled to retain the costs arising out of the particular claim in respect of which the money had been paid to them. 15. Against the decision in favour of the solicitors the plaintiff appealed. The judgment of the Court of appeal does not suggest that the statement of law in the Court below is incorrect, but the Lord Justices, taking a different view of the correspondence, reversed the order of Kekewich, J., holding that the Solicitors were entitled to a particular lien on the funds in their hands. I do not think it necessary to cite passages from their judgments, which are to be found in the same volume of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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