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PETITIONER:

IN THE MATTER OF Mr. 'G'A SENIOR ADVOCATE OF THE SUPREME COU

Vs.

RESPONDENT:

DATE OF JUDGMENT:

27/05/1954

BENCH:

DAS, SUDHI RANJAN

BENCH:

DAS, SUDHI RANJAN

MUKHERJEA, B.K.

BOSE, VIVIAN

HASAN, GHULAM

JAGANNADHADAS, B.

CITATION:

1954 AIR 560 1955 SCR 501

ACT:

Supreme Court Rules--Order IV, rule 30-Advocate-Supreme

Court-Agreement between him and his client for sharing

recoveries in the legal proceedings-Whether professional

misconduct-Professional conduct of Advocate of Supreme Court

in view of his special privileges and status.

HEADNOTE:

The act of an Advocate of the Supreme Court in entering into

an agreement with a client whereby the client undertakes to

pay him a part of any recoveries he might make in the legal

proceedings in respect of which he is employed, amounts to

professional misconduct and makes him liable for

disciplinary action and to this extent the ordinary legal

rights of contract do not apply to an Advocate as such.

Such agreements are not permissible to advocates under the

rigid rules of conduct enjoined by the profession so that

their integrity, dignity and honour may be placed above the

breath of scandal.

An Advocate of the Supreme Court is governed by special and

rigid rules of professional conduct expected of and applied

to a specially privileged class of persons who because of

their privileged status are subject to certain disabilities

which do not attach to other men and which do not even

attach to an Advocate while acting otherwise than as

Advocate.

An Advocate is therefore bound to conduct himself in a

manner befitting the high and honourable profession the

privileges of which he enjoys and if he departs from the

high standards which that profession has set for itself and

demands of him he renders himself liable to disciplinary

action.

JUDGMENT:

Original (Disciplinary) Jurisdiction.

In the matter of summons issued to Mr. "G" under rule 30 of

Order IV, Supreme Court Rules, to show cause to this Court

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why disciplinary action should not be taken against him.

The material facts of the case are stated in the Judgment

Order IV rule 30 of the Supreme Court rules runs as

follows;-

" Where on the complaint of any person or otherwise, the

Court is of opinion that an Advocate has been guilty of

misconduct or of conduct unbecoming an Advocate, the Court

may debar him from practising before the Court either

permanently or for such period as the Court may think fit,

and the Registrar shall thereupon report his name to his own

High Court

491

" Provided that the Court shall in the first instance

direct a summons to issue returnable before the Court or

before a Special Bench to be constituted by the Chief

Justice, requiring the Advocate to show cause against the

matter alleged in the summons, and the summons shall, if

possible, be served personally upon him with copies of any

affidavit or statement before the Court at the time of the

issue of the summons."

G in person:

Amarnath was the client. He had admittedly a just cause and

the High Court has held that the terms came from him and

were accepted out of compassion. I submit that in such

circumstances the agreement was neither professionally nor

morally improper. English law of Champerty and Maintenance

does not apply to India; Please see Ram Coomar Coondoo v.

Chunder Canto Mookerjee (1876) L.R. 4 I.A. 23; Bhagwat Dayal

Singh v. Debi Dayal Sahu (1907) L.R. 35 I.A. 48. Prior to

1926 there was a distinction between Pleaders, Advocates and

barristers. Barristers could nod enter into contractual

relationship. They could not sue or be sued: Deo Kisen v.

Budh Prakash (1833) I.L.R. 25 All. 509 F.B. This was in

accordance with the English rules of professional etiquette

among Barristers, but Pleaders and Advocates could enter

into contractual relations. Contingent fees have been known

and recognised in India at any rate since 1814. Please see

sec. 25, Bengal Regulation XXVII of 1814, and see. 52,

Bombay Regulation II of 1827. Contractual rights were

extended in 1846. Please see Pleaders Act I of 1846; Please

see sec. 7 as to fees. But agreements had to be registered

with the Court to be enforceable. Wide changes in all these

matters came about by legislation in 1926 (Legal

Practitioners' Fees Act, 1926). Barristers, Attorneys,

Advocates, Pleaders all came within the definition of Legal

Practitioners, who may now sue and be sued and may enter

into and may settle with their clients the terms of their

engagement and the fees to be paid. Section 3 of the Act is

sufficiently wide to include the impugned agreement with

Amarnath. Contingent fees have been known in India for more

than a century. In Madras in the case of Achamparambath

Cheria Kunhammu v. William Sydenham Gantz (1881) I.L.R. 3

Mlad. 138 F.B. a contrary view was expressed but Madras bad

framed a special rule by Circular Order of the Sudder Adulet

dated 18-8-53. In Bombay a contrary view was also taken: In

re Bhandara (1901) 3 Bom. L.R. 102 F.B. But the contract of

the Advocate there was clearly improper and facts of that

case were totally different from the facts of the present

case. The observations of the Learned Chief Justice were

obiter. In Bombay, Inampatra, which was in substance a fee

payable and contingent on success has, however, been held

enforceable: Shivram Hari v. Arjun (1881) I.L.R. 5 Bom. 258;

Parshram Vaman v. Hiraman Fatu (1884) I.L.R. 8 Bom. 413.

GHULAM HASAN J.: In U.P. they were referred to as Shukriana.

G: In the Punjab they were known as "back fees"

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and were held valid and enforceable: 5 P.R. 1878 F.B. Beechy

v. Faiz Mahomed until the Full Court's decision by majority

disapproved of the practice: 61 P.R. 1907 Ganga v. Devi Das.

But strong reasons in support of the practice will be-found

in the judgments of Lalchand & Chatterjee JJ. in 61 P.R.

1907. Contingent fees in a just cause have found

approbation in England. Please see Wiggins V. Lavy (1928)

44 T.L.R. 721 ; Bich v. Cook (1900) 110 L.T.J.D. 94 C.A. per

Lord Russell L.J.

In America, contingent fees are expressly recognised in

the canons of professional ethics of the American Bar

Association (Canon 12); See " Legal Ethics" by Henry S.

Drinker (Columbia University Press page 99) and Hoffman's

Resolutions (Ibid at page 343). The Supreme Court of the

U.S.A. in several cases has held such agreements as

enforceable.

1. Wylie v. Coxe 14 L. Ed. 753.

2. Barnes v. Alexander 58 L. Ed. 530.

3. McGowan v. Parish 59 L. Ed. 955.

4. Morris v. Giddings 29 L. Ed. 403.

5. Ball v. Halsell 40 L. Ed. 622.

6. Ingersoll v. Coram 53 L. Ed. 208.

The substance of the American law will be found in the

foot note to McMicken v. Perin, 15 L. Ed. 504.

The High Court based its decision in the present case

(1954) 56 Bombay L.R. 838 in re K.L. G on a question of

Public Policy as void under sec. 23 of the Contract Act, but

Public Policy has been held to be a treacherous ground for

legal decision [Lord Davey in Tanson v. Driefontein

Consolidated Mines [1901] A.C. 484 at page 500.]

GHULAM HASAN J. Public Policy is an " unruly horse."

MUKHERJEA J. You need not press this point.

M. C. Setalvad, Attorney-General for India (G. N.

Joshi and P. G. Gokhale with him) Conditions of the Bar in

America and in India are very different. American

authorities have therefore no relevance (Please see

observations of Rattigan J. in 61 P.R. 1907 Ganga Ram v.

Devi Das). An agreement though not void in law, may

nevertheless amount to professional misconduct. Our Courts

have held that agreeing to a share in the fruits of

litigation is unprofessional. Please see (1874) 21 W.R.

297: In the matter of Moung Htoon Oung, an Advocate at

Bangoon ; (1900) 4 C.L.J. 259 -In the matter of an Advocate;

(1901) 3 Bom. L.R. 102-In re N. F. Bhandara and the

majority judgments of the Full Court in 61 P.R. of 1907.

The facts in the case in 3 Bom. Law Reporter 102 may be

different but the rules of professional conduct were clearly

laid down in the observations of Sir Lawrence Jenkins.

Rigid notions of Champerty and Maintenance are not

applicable to India but such contracts are prohibited by

professional rules of conduct.

G. in reply: The law cannot approbate and reprobate in the

same breath. The Rulings earlier than the Legal

Practitioners

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Fees Act of 1926 and expressing a contrary view are now

obsolete. A contract which is not vitiated by fraud,

misrepresentation or some illegality or is not void under

any recognised head of public policy, cannot amount to

professional misconduct. The misconduct must fall within

the definitions and limitations of misconduct laid down by

the Bombay High Court in (1934) 36 Bom. L.R. 1136 F.B. Sir

Jamshed Byramji Kanga v. Kaikhushru Bomanji Bharucha; and

Anant Vishnu Chitre v. Pitamberdas Goculdas Mehta.

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' G' in person.

M.C. Setalvad, Attorney-General for India (G.,N. Joshi and

P. G. Gokhale, with him) for the Hon'ble Chief Justice and

other Hon'ble Judges of the Bombay High Court.

1954. May 27. The Judgment of the Court was delivered by

BOSE J.-This matter arises out of a summons issued to Mr. G,

a Senior Advocate of this Court under Order IV, rule 30, of

the Supreme Court Rules, to show cause why disciplinary

action should not be taken against him.

Mr. G was called to the Bar in England and was later

enrolled as an Advocate of the Bombay High Court. He is

also an Advocate of this Court. On 20th December, 1952, he

entered into an agreement with a client whereby the client

undertook to pay him 50 per cent. of any recoveries he might

make in the legal proceedings in respect of which he was

engaged. On this being reported to the High Court the

matter was referred to the Bombay Bar Council and was

investigated by three of its members under section 1 1 (1)

of the Bar Councils Act. They recorded their opinion that

this amounted to professional misconduct. The High Court

agreed and suspended Mr. G from practice as an Advocate of

the Bombay High Court for six months. The learned Judges

considered that they had no power to affect his position as

an Advocate of this Court, so directed that a copy of their

judgement be submitted to this Court to enable this Court to

take such action on it as it thought fit. 'Acting on this

report this Court issued notice to the petitioner under

Order IV, rule 30, to show cause why discipliner y action

should not be taken against him. About the same time Mr. G

filed a petition for a writ

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under article'32 of the Constitution. We are confining

ourselves in this order to the matter raised in the summons.

There is no dispute about the facts. They are set out

in Mr. G's petition under article 32 and\are as follows:

On the 23rd of July, 1951, Air. G's client is said to

have entered into an agreement with the Baroda Theatres

Ltd., for work on a picture which they intended to produce.

The remuneration agreed on was Rs. 15,000. Of this Rs.

3,000 was paid at once and the balance, Rs. 12,000, was to

be paid on the completion of the picture. It is said that

at the date of the dispute the Barods Theatres admitted that

Rs. 9,400 was due, but as they did not pay up, the client

consulted Mr. G about the best way to recover his money and

wanted to know what the expenses and fees would be. After

examining the matter in detail and talking it over with his

client, Mr. G advised him that two courses were open to him.

First, there was a civil suit. He said the cost of this

would be about Rs. 800 for Court fees and expenses and about

Rs. 1,250 for fees. The other alternative was winding up

proceedings. The client was told that in these the Court

fees would be lower but Mr. G's fees would have to be higher

as winding up proceedings are usually protracted.

The client preferred the latter course but said that he

could not pay more than Rs. 200 towards the expenses and as

regards the fees he said he was too poor to pay and so made

a proposal which he reduced to writing. It is embodied in

the following letter dated 20th December, 1952, addressed to

Mr. G:

I hereby engage you with regard to my claim against the

Baroda Theatres Ltd., for a sum of Rs. 9,400 (balance due to

me).

Out of the recoveries you may take 50% of the amount

recovered. I will by Wednesday deposit Rs. 200 in your

account or give personally towards expenses."

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Mr. G said that he was unwilling to work on these terms

but when he was pressed to do so and when he

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realised that unless he agreed the client would probably

lose a just claim he reluctantly agreed.

Rs. 200 was thereupon paid towards expenses and Mr. G at

once entered into correspondence with the solicitors of the

Baroda Theatres Ltd. A winging up petition was drawn up and

declared but was not filed because the matter was

compromised at that stage. The Baroda Theatres undertook to

pay Mr. G's client Rs. 6,400 in full satisfaction of his

claim.

The client then paid Mr. G a further Rs. 800. (He had

already paid Rs. 200, part of which was spent for expenses).

Mr. G claimed the balance which was roughly Rs. 2,200.

We are not concerned with the proceedings in the Bombay High

Court and before the Tribunal of the Bar Council in the

summons matter with which we are dealing at the moment, as

we are acting here under Order IV, rule 30, of the Rules of

this Court. The only question is whether, on the facts and

circumstances set out above (all of which are admitted by

Mr. G), his engagement of 20th December, 1952, amounts to

professional misconduct.

Mr. G argued the matter at length, and to his credit be it

said, objectively and with restraint, but it is not

necessary to cover the wide field he did because we are not

concerned with ordinary rights of contract, nor with

ordinary legal rights, but with the special and rigid

rules of professional conduct expected of and applied to a

specially privileged class of persons who, because of there

privileged status, are subject to certain disabilities which

do not attach to other men and which do not attach even to

them in a non-professional character. To use the language

of the Army, an Advocate of this Court is expected at all

times to comport himself in a manner befitting his status as

an " officer and a gentleman." In the Army it is a military

offence to do otherwise (see section 45 of the Army Act,

1950) though no notice would be taken of ungentlemanly

conduct under the ordinary law of the land, and none in the

case of a civilian. So here, he is bound to conduct himself

in a manner befitting the high and-

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honourable profession to whose privileges he has so long

been admitted; and if he departs from the high standards

which that profession has set for itself and demands of him

in professional matters, he is liable to disciplinary

action.

Now it can be accepted at once that a contract of this kind

would be legally unobjectionable if no lawyer was involved.

The rigid English rules of champerty and maintenance do not

apply in India, so if this agreement had been between what

we might term third parties, it would have been legally

enforceable and good. It may even be that it is good in law

and enforceable as it stands though we do not so decide

because the question does not arise; but that was argued and

for the sake of argument even that can be conceded. It

follows that there is nothing morally wrong, nothing to

shock the conscience, nothing against public policy and

public morals in such a transaction per se, that is to say,

when a legal practitioner is not concerned. But that is not

the question we have to consider. However much these

agreements may be open to other men what we have to decide

is whether they are permissible under the rigid rules of

conduct enjoyed by the members of a very close professional

preserve so that their integrity, dignity and honour may be

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placed above the breath of scandal. That is part of the

price one pays for the privilege of belonging to a kind of

close and exclusive "and enjoying in it privileges and

immunities' denied to less fortunate persons who are outside

its fold. There is no need to enter its portals and there

is no need to stay, but having entered and having elected

to. stay and enjoy its amenities and privileges, its rules

must be obeyed or the disciplinary measures which it is

entitled to take must be suffered. The real question

therefore is whether this kind of conduct is forbidden to

the elect or whether, if it was once forbidden, the ban has

since been removed, either directly or by implication, by

legislative action.

Now it was not disputed that, so far as English Barristers

are concerned, this sort of agreement was once taboo both in

England and in India. Even when

497

they worked in the mofussil in India and did the kind of

work that would be done by solicitors in England and in the

Presidency Towns in India, they could not enter into an

engagement of this kind, for even solicitors in England are

forbidden from making such bargains (see Cordery's Law

Relating to Solicitors, fourth edition, page 342). But, it

was argued, this rule only applied to members of the English

Bar, and in any event it was abrogated in India in 1926.

We will first examine whether there was a difference between

Barristers and other classes of lawyers. This point was

raised in the Punjab in 1907 but was rejected by a majority

of seven Judges to two in a Full Bench of nine Judges in

Ganga Ram v. Devi Das(1). But it is to be observed that

even the two dissenting Judges agreed that an engagement of

the present kind was not open to a member of the Punjab Bar.

Lal Chand J. (who dissented) said at page 331 :

"I am in perfect accord with the Hon'ble Chief Judge that

stipulation to receive a share in the result of the

litigation is different from a stipulation to be, paid a fee

contingent on success."

The other dissenting Judge, Chatterji J., agreed with him

but even as regards the practice which these two learned

Judges thought permissible at the date of their decision,

Chatterji J. said at page 299

"It must not be supposed, however, that I am in favour of

the practice. I should on the whole prefer its

abolition......... "

We agree with Chitty J. at page 326 that there was no

justification even at that date for seeking to apply one set

of rules to one branch of the profession and another to

another. As he said-

"What is right or wrong for the one must be right or wrong

for the other,"

or, as Sir Lawrence Jenkins C. J. put it in In re. N.F.

Bhandara(2),

"For common honesty there must be no sliding scale even in

the mofussil..............

(1) 61 P. R. (Of 1907), P. 280. (2) 3 Bom, L. R. 102 at I.

I. J.

64

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Reading "standards of professional conduct" for the word

"honesty", the quotation is apt here. In any case, the

decisions to which we shall refer deal with "Advocates" and

even where these "Advocates" were Barristers the matter

touched them as "Advocates" of an Indian High Court and not

because of their special status as Barristers. It is true

that at one time Advocates were mainly Barristers, but that

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was not always the case and the rule laid down in these

decisions governed all "Advocates," whether Barristers or

otherwise.

The learned Judges in the Punjab Record case collected all

the available authorities up to the year of their decision

and they show that this kind of agreement was condemned in

Calcutta in 1874 and 1900: In the matter of Moung Htoon

Qung(1) and In the matter of an Advocate of the Calcutta

High Court(2) ; in Bombay in 1901: In re. N. F. Bhandara(3)

; and in Madras in 1881 and again in 1939 : Achamparambath

Cheria Kunhammu v. William Sydenham Ganty(1) and In re. an

Advocate of the Madras High Court(5). As the Bombay High

Court is the one in which Mr. G normally practices and as

the engagement was entered into in Bombay, we think it

proper to quote the following passage at page 113 from the

judgment in the Bombay case (In re. N. F. Bhandara)

I consider that for an Advocate of this Court to

stipulate for, or receive, a remuneration proportioned to

the results of litigation or a claim whether in the form of

a share in the subject-matter, a, percentage, or otherwise,

is highly reprehensible, and I think it should be clearly

understood that whether his practice be, here or in the

mofussil he will by so acting offend the rules of his

profession and so render himself liable to the disciplinary

jurisdiction of this Court."

Mr. G argued that even if this was once the law, section 3

of the Legal Practitioners (Fees) Act, 1926,

(Act XXI of 1926)changed it and that now. every legal Practitioner

is competent to settle the terms

(1) 21 W.R. 297. (4) I. L. R. 3 Mad. 138.

(2) 4 Cal. L. J. 259. (5) 1, L, R. 1940 Mad. 17.

(3) Bom, L. R. 102 at 113

499

his engagement and his fees by private agreement with his

client. This, Mr. G said, entitles him to enter into any

agreement which the law permits in the case of ordinary

persons. Legal practitioners, according to him, are now

governed by the law of contract and not by rules imported

from other countries with different ideas and different

social customs and imposed on the Bar ha India mainly by

English Judges. We do not agree, because this Act is not

concerned with professional misconduct. That is dealt with

by the Bar Councils Act which was passed in the same year

(1926). The Bar Councils Act makes no modification in the

disciplinary jurisdiction of the High Court or of the sense

in which professional misconduct had been understood

throughout India up to that time.

The. only Indian decision which Mr. G, could quote in his

favour was Muthoo Lail v. Budree Pershad (1). But that was

not a case in which disciplinary action was being taken

against a legal practitioner for professional misconduct.

The question there was whether an, agreement which might be

objectionable on the ground of professional misconduct could

be enforced by suit. Two Bombay decisions on which Mr. G

relies are to be distinguished in the same way : Shivram

Hari v. Arjun(2) and Parshram Vaman v. Hiraman Fatu(3).

Whether these cases were rightly decided or whether they

would also be hit on the ground of public policy as Chitty

J. thought of a similar matter in the Punjab Record case, is

something which does not arise for decision here. It is

enough to say that those cases are distinguishable on the

around that the Judges there were not considering a case of

disciplinary action.

Mr. G relied on the practice in some of the American

States where an agreement by an attorney to purchase part of

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the subject-matter of the litigation is upheld. The class

of cases to which he refers are summarised in a footnote to

McMicken v. Perin(1). He relied on this to show that

contracts of this kind cannot be dismissed as reprehensible

or morally wrong. We do not propose to enter into this

because what may be

(1) I N. W. P. H. C. R. I.

(2) 1. L. R. 5 Bom. 258.

(3) I. L. R. 8 BOm. 413.

(4) 15 Law. Edn. 504 & 505.

500

harmless in one country may not be so in another. We will

however pause to observe that Rattigan J. collected a large

volume of 'American authority at pages 318-321 of his

opinion in Ganga Ram v. Devi Das(1) to show that even in

those States where this is permitted it is regretted and

frowned upon. For historical reasons obtaining there, the

practice may have come to stay however much it is regretted;

but in 1937 the American Bar Association adopted the

following canon of Professional Ethics:

"The lawyer should not purchase any interest in the

subject-matter of the litigation which he is conducting."

In India history tells the converse tale. We see no

reason why we should import what many feel if; a mistake,

even in the country of its origin, from another country and

seek to perpetuate their error here when a sound and healthy

tradition to the contrary already exists in our Bar. The

reasons for exacting these high standards in this country,

where ignorance and illiteracy are the rule, are even more

important than they are in England where the general level

of education is so much higher. We hold that the conduct of

Mr. G amounts to professional misconduct and as it was

committed in the face of the Bombay view expressed by Sir

Lawrence Jenkins in 1901 disciplinary action is called for.

Now had Mr. G been as restrained and objective in his

petition under article 32 as he was while arguing the case

before us, we might have considered a warning enough seeing

that this is the first time this question has been

considered in this Court, but, in view of his personal

attacks on the learned Chief Justice in his petition where

he has questioned his good faith and attributed malice to

him, we are not able to deal with him as lightly. We

therefore direct that he be suspended from practising in

this Court for a period which will expire on the same date

as his period of suspension in-the Bombay High Court.

There will be no order about costs.

Order accordingly.

(1) 61 P. R. (of 1907), P. 280.

501