In Re: Mr. 'G', A Senior Advocate Of The... vs Unknown

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 27 May 1954

Coram: Vivian Bose, Ghulam Hasan

In this proceeding the Supreme Court considered a summons that had been issued to Mr G, a senior advocate of the Court, under Order IV, rule 30 of the Supreme Court Rules. The summons required him to show cause why disciplinary action should not be taken against him. The record shows that Mr G had been called to the Bar in England and subsequently enrolled as an advocate of the Bombay High Court; he also held the status of an advocate of the Supreme Court. On 20 December 1952 he entered into a written agreement with a client in which the client undertook to pay Mr G fifty per cent of any amount that might be recovered in the legal proceedings for which Mr G was engaged. This agreement was later reported to the Bombay High Court. The High Court referred the matter to the Bombay Bar Council, which investigated the allegation under section 11(1) of the Bar Councils Act. Three members of the Bar Council examined the agreement and recorded the opinion that the arrangement amounted to professional misconduct. Acting on that opinion, the High Court suspended Mr G from practice as an advocate of the Bombay High Court for a period of six months. The High Court judges noted that they possessed no authority to affect his standing as an advocate of the Supreme Court and therefore ordered that a copy of their judgment be forwarded to the Supreme Court so that it could take any appropriate action. In response to that report the Supreme Court issued a notice to the petitioner under Order IV, rule 30, requiring him to show cause why disciplinary action should not be taken against him. Around the same time Mr G filed a petition for a writ of habeas corpus under article 32 of the Constitution. The Supreme Court clarified that the present order was confined to the matters raised in the summons and would not address the article 32 petition. The facts of the case were not in dispute and were set out in Mr G’s petition under article 32. According to those facts, on 23 July 1951 the client of Mr G had entered into a contract with Baroda Theaters Ltd. for the production of a motion picture. The agreed remuneration for the work was fifteen thousand rupees, of which three thousand rupees had been paid immediately and the remaining twelve thousand rupees were to be paid upon completion of the picture. At the time the dispute arose, Baroda Theaters admitted that nine thousand four hundred rupees were due to the client, but the amount remained unpaid. The client therefore consulted Mr G for advice on the most effective means of recovering the sum and also asked for an estimate of the expenses and fees that would be incurred. After a detailed examination of the circumstances and a discussion with the client, Mr G advised that two possible courses of action were available. The first option was to institute a civil suit, for which he estimated that the costs would be about

The advocate advised that pursuing a civil suit would require court fees of approximately Rs 800 and professional fees of about Rs 1,250. The alternative was to commence winding-up proceedings, for which the court fees would be lower but the advocate’s fees would be higher because such proceedings were usually prolonged. The client expressed a preference for the winding-up route but stated that he could not afford more than Rs 200 towards expenses and, being indigent, could not meet the professional fees. Consequently, the client drafted a written proposal dated 20 December 1952, which read: “I hereby engage you with regard to my claim against Baroda Theatres Ltd., for a sum of Rs 9,400 (balance due to me). Out of the recoveries you may take 50 per cent of the amount recovered. I will by Wednesday deposit Rs 200 in your account or give personally towards expenses.” The advocate indicated that he was unwilling to accept those terms, yet after being pressed and recognizing that refusal might cause the client to lose a legitimate claim, he reluctantly consented. The client then paid Rs 200 towards expenses, and the advocate immediately began correspondence with the solicitors of Baroda Theatres Ltd. A winding-up petition was prepared and declared, but it was not filed because the dispute was settled at that stage, and Baroda Theatres Ltd. undertook to pay the client Rs 6,400 in full satisfaction of his claim. Subsequently the client remitted an additional Rs 800 to the advocate, having already paid Rs 200, part of which had been applied to expenses. The advocate thereafter claimed the remaining balance, calculated to be roughly Rs 2,200. The court noted that it was not addressing the Bombay High Court proceedings or the Bar Council tribunal matters, as the present reference was made under Order IV, rule 30 of the Court’s Rules. The sole question before the court was whether, given the admitted facts, the engagement dated 20 December 1952 constituted professional misconduct on the part of the advocate. The advocate presented an extensive argument, which the court acknowledged as objective and restrained, yet it deemed a detailed discussion unnecessary because the inquiry was not into ordinary contractual rights or general legal rights but into the special, stringent standards of professional conduct that apply to a privileged class of persons. The court emphasized that an advocate, by virtue of his privileged status, is subject to disabilities and obligations that do not apply to others, even when acting in a non-professional capacity.

In this matter, the Court emphasized that a senior advocate is expected to behave as “an officer and a gentleman.” The Court noted that, under the Army Act of 1950, section 45 makes it a military offence for a soldier to fail to meet that standard, although such ungentlemanly conduct would not attract any notice under the ordinary law of the land nor would a civilian be subject to any penalty. Accordingly, the Court held that the advocate in question is bound to conduct himself in a manner that is consistent with the lofty and honourable standing of the legal profession to which he has long been admitted. The Court further observed that if the advocate departs from the high standards that the profession has prescribed for itself and that it demands of its members in professional matters, he becomes liable to disciplinary action.

The Court then turned to the nature of the agreement that was the subject of the proceedings. It stated that the contract would be legally unobjectionable if no lawyer were involved. The Court explained that the rigid English rules of champerty and maintenance do not operate in India, so that an agreement of the same description between two ordinary parties would be enforceable and valid. The Court added that, even if the agreement were found to be valid and enforceable as it stands, the present case does not require a determination of that point because the issue was not taken up for decision; nonetheless, for the sake of argument the Court was prepared to concede that the agreement could be lawful. From this, the Court concluded that there is nothing intrinsically immoral, nothing that shocks conscience, and nothing that offends public policy or public morals in such a transaction when a legal practitioner is not a party. However, the Court stressed that this is not the question before it. While such agreements may be permissible for persons who are not lawyers, the Court must decide whether they are permitted under the strict rules of conduct that govern members of the close professional body whose integrity, dignity and honour must be protected from scandal. The Court described membership in the bar as a privileged “club” that confers special rights and immunities, and noted that once a person has entered the club and elected to enjoy its privileges, the rules of the club must be obeyed or the member must endure the disciplinary measures the bar is entitled to impose. The real issue, the Court said, is whether this type of conduct is prohibited for members of the bar, or whether a former prohibition has been removed, either expressly or by implication, through legislative action. The Court further observed that it was not disputed that, with respect to English barristers, such agreements were once considered taboo both in England and in India. Even when English-trained lawyers worked in the provinces of India performing work comparable to that of solicitors in England and in the Presidency towns, they were prohibited from entering into such engagements, as solicitors in England were likewise forbidden to make such bargains.

In this matter the Court first considered the historical rule that solicitors were prohibited from entering into agreements whereby their remuneration depended on the result of litigation. The rule was set out in the fourth edition of the treatise on the law relating to solicitors, page 342. It was argued that the prohibition applied solely to members of the English Bar and, moreover, that it had been repealed in India by legislation enacted in 1926. The Court therefore set out to determine whether a distinction existed between barristers and other categories of legal practitioners and whether any such distinction survived after the 1926 legislative change. The issue was previously raised before a Full Bench of the Punjab High Court in 1907 in the case of Ganga Ram v. Devi Das, reported in 61 P.R. at page 280, where a majority of seven judges out of nine rejected the contention that barristers were subject to a different rule than other lawyers. Notably, even the two dissenting judges concurred that an agreement of the kind presently before the Court was not permissible for a member of the Punjab Bar. One dissenting judge, writing at page 331, expressed full agreement with the Chief Judge that a stipulation to receive a share in the litigation result differed fundamentally from a fee contingent on success.

The second dissenting judge, also writing at page 299, reiterated his disagreement with the practice, stating a personal preference for its abolition despite acknowledging the limited scope of the practice considered permissible at the time of the decision. The Court aligned itself with the reasoning of Justice Chitty, who, at page 326, observed that there was no justification for applying one set of professional rules to one branch of the profession and a different set to another, emphasizing that what is right or wrong for one must be right or wrong for the other. This view echoed the observation of Sir Lawrence Jenkins, Chief Justice, in In re N. F. Bhandara, that for the sake of common honesty there must be no sliding scale even in the provincial courts. Interpreting the phrase “standards of professional conduct” with particular reference to “honesty,” the Court found the quotation appropriate. The decisions cited throughout the judgment concerned “advocates” and, even where those advocates were barristers, they were treated as advocates of an Indian High Court, not as members of the English Bar. Historically advocates had often been barristers, but that was not universally the case, and the rules articulated in the cited decisions were intended to govern all advocates, irrespective of their background. The judges in the Punjab case compiled all relevant authorities up to their decision year and demonstrated that such contingent fee agreements had been condemned in Calcutta in 1874 and 1900, in Bombay in 1901, and in Madras in 1881 and again in 1939, thereby establishing a consistent nationwide judicial stance against the practice.

In this matter the Court noted that the decision reported as In re an Advocate of the Madras High Court (I.L.R. 1940 Mad. 17) was also relevant. Because the respondent ordinarily practises before the Bombay High Court and because the engagement at issue was executed in Bombay, the Court found it appropriate to reproduce a passage from page 113 of the judgment in the Bombay case In re N. F. Bhandara. The quoted passage states: “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.” The respondent, Mr. G, contended that even if such a rule had existed earlier, section 3 of the Legal Practitioners (Fees) Act, 1926 (Act XXI of 1926) had altered the position by allowing every legal practitioner to determine the terms of his engagement and fees through private agreement with his client. He argued that this change placed legal practitioners within the ordinary law of contract, removing the applicability of rules imported from other jurisdictions and imposed by English judges. The Court disagreed, observing that the Act addresses fees but does not govern professional misconduct, which remains within the purview of the Bar Councils Act of the same year. The Bar Councils Act, the Court explained, does not modify the disciplinary jurisdiction of the High Court nor the established understanding of professional misconduct throughout India at that time. The only Indian authority cited by Mr. G in support of his position was Muthoo Lall v. Budree Pershad (1 N.W.P.H.C.R. 1), a case that concerned the enforceability of an agreement alleged to be objectionable on professional grounds, not a disciplinary proceeding against a lawyer. Two Bombay decisions relied upon by the respondent, Shivram Hari v. Arjun (I.L.R. 5 Bom. 258) and Parshram Vaman v. Hiraman Fatu (I.L.R. 8 Bom. 413), were distinguished because they did not involve disciplinary action. The Court therefore concluded that those cases could not be applied here, as the judges in those matters were not addressing professional misconduct. Finally, the Court observed that Mr. G’s reliance on practices in some American states, where agreements by an attorney to acquire an interest in the subject-matter of litigation are upheld, was not determinative, since what may be permissible in another country does not necessarily apply under Indian law.

In this matter the Court observed that Mr G had relied on the practice in certain American states whereby an attorney is allowed to purchase a portion of the subject-matter of the litigation in which the attorney is engaged. He referred to a class of cases that had been summarized in a footnote to McMicken v. Perin (15 Law Edn. 504 & 505) and used that authority to argue that contracts of this sort cannot be dismissed as reprehensible or morally wrong. The Court, however, declined to adopt that position, noting that a practice that may be considered harmless in one jurisdiction may be viewed very differently in another. In support of this view the Court cited the extensive collection of American authority assembled by Rattigan J. at pages 318-321 of his opinion, specifically the passage in Ganga Ram Devi Das (61 P.R. (of 1907), p. 280), which demonstrates that even in those states where such purchases are permitted, the practice is regretted and regarded with disapproval. The Court further pointed out that, for historical reasons, the practice may have persisted, but in 1937 the American Bar Association adopted a canon of Professional Ethics stating, “The lawyer should not purchase any interest in the subject-matter of the litigation which he is conducting.” The Court then turned to the Indian context and noted that the history of the Indian legal profession tells the opposite story. It found no justification for importing a practice that many consider a mistake, even in its country of origin, into India when a sound and healthy tradition of higher professional standards already exists in the Bar. The Court emphasized that, because ignorance and illiteracy are prevalent in this country, the reasons for maintaining stringent ethical standards are even stronger than those in England, where the general level of education is higher. Accordingly, the Court held that Mr G’s conduct amounted to professional misconduct. It further observed that the conduct was undertaken despite the established view expressed by Sir Lawrence Jenkins in 1901, and therefore disciplinary action was warranted.

The Court added that, had Mr G presented his petition under article 32 with the same restraint and objectivity that he displayed while arguing before the Court, a mere warning might have sufficed, especially since this was the first occasion on which the question had been considered by this Court. However, the Court noted that Mr G’s petition contained personal attacks on the learned Chief Justice, in which he questioned the Chief Justice’s good faith and attributed malice to him. Because of those personal attacks, the Court could not treat the matter lightly. Consequently, the Court directed that Mr G be suspended from practising before this Court for a period that will terminate on the same date as his suspension from practising before the Bombay High Court. The Court further stated that no order regarding costs would be made. Finally, the Court ordered that the directions set out above be implemented.