Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

B. Sunitha Versus The State of Telengana And Anr.

2017 (12) TMI 395 - SUPREME COURT OF INDIA

Proceedings initiated against the appellant u/s 138 of the NI Act - professional misconduct on the part of an advocate - charging fees as percentage of reward - Held that:- Mere issuance of cheque by the client may not debar him from contesting the liability. If liability is disputed, the advocate has to independently prove the contract. Claim based on percentage of subject matter in litigation cannot be the basis of a complaint under Section 138 of the Act. - In view of the above, the claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it this prayer. Having committed a serious professional misconduct, the respondent No.2 could not be allowed to avoid the adverse consequences which he may suffer for his professional misconduct. The issue of professional misconduct may be dealt with at appropriate forum. - Criminal Appeal No. 2068 of 2017, (Arising Out Of Special Leave Petition (Crl.) No.10700 of 2015) - Dated:- 5-12-2017 - Mr. Adarsh Kumar Goel And Mr. Uday Umesh Lalit JJ. For the Petitioner : Mr. Baij Nath Patel,Adv., Ms. Swe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pellant under Section 138 of the Negotiable Instruments Act, 1881( the Act ). 2. The proceedings were initiated by the respondent who is an advocate in whose favour the appellant executed a cheque allegedly towards his fee. The same was dishonoured. The stand of the appellant is that Section 138 of the Act is not attracted as there was no legally enforceable debt. The appellant having already paid a sum of ₹ 10 lakhs towards fee, the cheque was taken from the appellant by way of abuse of p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sumption of enforceable debt arises, specially when no account maintained in regular course of business was furnished. 3. Reference may be briefly made to the facts on record. The appellant s husband died in a motor accident on 30th July, 1998. She along with her children and parents of the deceased filed a claim before the Motor Accident Claims Tribunal (MACT) through the respondent as an advocate. The MACT awarded compensation. The appellant paid a sum of ₹ 10 lakhs towards fee on variou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y having been returned unpaid for want of funds, the appellant committed the offence for which she was liable to be punished. The appellant was summoned by the Court against which she approached the High Court stating that there was no legally enforceable debt as fee claimed was exorbitant and against law. The claim was in violation of Advocates Fee Rules and Ethics as fee could not be demanded on percentage of amount awarded as compensation to the appellant. Her signatures were taken when she w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at the fee claimed by the respondent was against the A.P. Adovcates Fee Rules, 2010 of Subordinate Courts. It was also submitted that the claim of the respondent was against ethics and public policy and hit by Section 23 of the Contract Act. 7. The High Court held that Advocates Fee Rules are only for guidance and there was no bar to fee being claimed beyond what is fixed under the Rules. The claim of the respondent was that the amount included his fee for engaging an advocate in the High Court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

favour of the respondent that the cheque represented legally enforceable debt. In any case, such presumption stood rebutted by settled law that claim towards Advocate s fee based on percentage of result of litigation was illegal. Signing of the cheque was by way of exploitation of fiduciary relationship of Advocate and the client. 10. In support of his submission that charging of exorbitant fee and calculating the sum with reference to the result of the litigation was against public policy, reli .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e was no legal bar to the claim of the complainant towards his professional fees. Learned counsel for the complainant did not dispute that a sum of ₹ 10 lakhs has already been received towards fee. There was no written agreement about the quantum of fee nor any account was maintained. He also did not dispute the e-mail dated 2nd November, 2014 wherein basis of the claim of fee is 16% of the decretal amount received by the appellant. 12. The first question which needs consideration is wheth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nch Judgment of the Madras High Court in C. Manohar versus B.R. Poornima (2004) Crl.L.J 443. R. Banumathi, J (as her Lordship then was) held that no presumption could arise merely by issuance of a cheque that amount stipulated in the cheque was payable towards fee. In absence of independent proof, issuance of cheque could not furnish cause of action under Section 138 of the Act in the context of an advocate or client. The observations relevant in the context are as follows : The case in hand is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ged ... profession has almost became a trade. There is no more service orientation. 12. The relationship between the lawyer and the client is one of trust and confidence. The client engages a lawyer for personal reasons and is at liberty to leave him for the same reasons. Considering the relationship between the lawyer and the client and the present day trend in the profession, it has to be carefully seen whether the complainant has proved that the amount due of ₹ 43.600/- is being payable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bt or other liability, even if it is returned unpaid-, will not meet with penal consequences. 14. Case of the complainant is that on behalf of the accused, he has filed claim petitions in M. C. O. P. Nos. 2339 of 1992 and 246 of 1993. Two civil cases were also filed. There is nothing to show that the complainant/Advocate himself has paid the stamp duty and bore the legal fees. The complainant has not produced any agreement showing as to what was the arrangement between him and the accused, as to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cheque is issued by the drawer a presumption under Section 139 N. I. Act must follow and merely because the drawer issues a notice to the drawee (Payee) or to the Bank for stoppage of the payment it will not preclude an action under Section 138 of the Act by the drawee (Payee) or the holder of a cheque in due course. Of course, under Section 139 N. I. Act, there is a presumption that unless the contrary is proved, the holder of the cheque received the cheque for the discharge in whole or in par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom any infirmity warranting interference. 14. The Bombay High Court in Re: KL Gauba AIR 1954 Bom 478 held that fees conditional on the success of a case and which gives the lawyer an interest in the subject matter tends to undermine the status of the profession. The same has always been condemned as unworthy of the legal profession. If an advocate has interest in success of litigation, he may tend to depart from ethics. 15. In in the matter of Mr. G.: A Senior Advocate of the Supreme Court (195 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt on the results of litigation or agree to share the proceeds thereof. 18. Thus, mere issuance of cheque by the client may not debar him from contesting the liability. If liability is disputed, the advocate has to independently prove the contract. Claim based on percentage of subject matter in litigation cannot be the basis of a complaint under Section 138 of the Act. 19. In view of the above, the claim of the respondent advocate being against public policy and being an act of professional misc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dent No.2 could not be allowed to avoid the adverse consequences which he may suffer for his professional misconduct. The issue of professional misconduct may be dealt with at appropriate forum. 21. Thus, while proceedings against the appellant will stand quashed, the issue of professional misconduct is left to be dealt with at the appropriate forum. 22. However, apart from the present individual case, the general issue, having been highlighted, may need further consideration by this Court in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

? This Court has even earlier expressed the concern on the falling professional norms in the legal profession (R.K. Anand v. Delhi High Court (2009) 8 SCC 106, para 333 ; Sanjiv Datta, Deputy Secretary, Ministry of Information and Broadcasting, In Re. (1995) 3 SCC 619, para 20.) In Tahil Ram Issardas Sadarangani versus Ramchand Issardas Sadarangani 1993 Supp. (3) SCC 256, this Court noted the trend of increasing element of commercialization and decreasing element of service. In VC Rangadurai (su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

observed earlier in the decisions of this Court (O.P. Sharma versus State of Punjab (2011) 6 SCC 86, paras 18 to 23; R.D. Saxena versus Balram Prasad Sharma (2000) 7 SCC 264, paras 14,28,41,42). 24. In its 131st Report dated 31st August, 1988, the Law Commission of India, examined the role of the legal profession in strengthening the system of administration of justice. The issue considered included : (i) the state of profession and its public image; (ii) profession s attitude towards the policy .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

had contributed to the piling up of arrears jeopardizing the consumers of justice and has thus led to weakening the system of administration of justice (Para 2.17). While considering the mounting cost of litigation, it was observed that fee charged by some senior advocates are astronomical in character. The corporate sector is willing to retain talent at a high cost. It develops into a culture and it permeates down below (Paras 2.22, 2.24). Role of the legal profession in strengthening the admin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y of the legal profession (Paras 3.4, 3.8, 3.25). The methodology was required to be devised as a part of social audit of the profession wherein consumers of justice were required to be given role (Para 3.31.) 26. Referring to the lawyers fee as barrier to access to justice, it was observed that it was the duty of the Parliament to prescribe fee for services rendered by members of the legal profession. First step should be taken to prescribe floor and ceiling in fees (Para 3.28). 27. With regard .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-trial conciliation proceedings (Para 3.21). Reducing the number of witnesses to be examined by deleting the irrelevant witnesses reducing the length of cross-examination by avoiding unnecessary questions (Para 3.17) and avoiding adjournments could help the administration of justice. 28. Though the 131st Report was submitted in the year 1988, no effective law appears to have enacted to regularize the fee or for providing the public sector services to utmost needy litigants without any fee or at .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Mandate for the Bench and the bar is to provide speedy and inexpensive justice to the victim of justice and to protect their rights. The legal system must continue to serve the victims of injustice. 29. In view of this mandate, this Court requested the Law Commission to have a re-look at the regulatory mechanism and expressed the hope that the Government of India will consider the recommendation of the Law Commission. In its 266th Report dated 23rd March, 2017 submitted in the light of decision .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version