Interview

RD SAXENA vs BALRAM PRASAD

Author: Gitika Sonthalia, a student at KIIT University


Introduction

In this case, it is determined whether a legal professional has a right to lien on the papers of the client? If so, in what way can the right of lien be exercised? 

This can be viewed under the perspective of section 148 and section 171 of The Indian Contract Act,1872 as well as Section 38 of the Advocates Act, 1961. The debate is about whether the lawyer could retain the client’s papers and if it was legal for him to do so?

Essential details of the case

Citation: AIR 2000 SC 2912

Court: Supreme Court

Bench: K T Thomas

Petitioner: R D SAXENA 

Respondent: BALRAM PRASAD

Date of judgment: 22.08.2002

Current status: Valid

Facts of the case

  • The appellant was appointed the legal advisor of the Madhya Pradesh State Co-operative Bank Ltd. (further referred to as ‘bank’). 
  • The bank on 17.7.1993. terminated the retainers of the appellant, and requested him to return the files related to the bank. 
  • Instead of returning the files, the appellant asked for his dues to be cleared first, an amount of Rs. 97,100, only then would he return the files. 
  • The bank files a complaint against the State Bar Council of Madhya Pradesh on 3.2.1994.
  • The appellant contended that he has a right of lien on those files, the defendant contended that the appellant is guilty of professional misconduct by not returning the files to his client. 
  • The matter was transferred to the disciplinary committee of the Bar Council of Madhya Pradesh on 3.2.1994. 
  • The appellant was found guilty of professional misconduct and a fine of Rs. 1000 was imposed and was debarred from practicing for 18 months, along with a direction to return all the files without any delay. 

Issues

  • Whether the advocate can have a lien on the litigation papers entrusted to him by his clients for pending fees?

Arguments

  • The BCI failed to consider the defense of the appellant, wherein he had a lien over the files for unpaid fees dues to him. It resulted in a miscarriage of justice.
  • Section 171 of the Contract Act, 1872 clearly states that; “Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as security for a general balance of the account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them unless there is an express contract to that effect”; and hence he can have a lien on litigants’ paper.
  • An advocate after the termination of engagement with the client, an advocate must return the files and holds no lien over them. 

Judgment

  • Section 148 of the Indian Contract Act defines bailment which states that; if the goods are transferred from one person to another for some purpose; and after completion of the purpose the goods have to be returned to; or otherwise disposed of according to the directions of the person delivering them then such transfer can be termed as a bailment.
    But in this case, the goods are not bailed to the appellant/advocate as there was no delivery of the goods; because the advocate owned paper on his account. 
  • Hence, the goods which fall in the purview of section 171 should have marketability i.e., they should be saleable. 
  • The case files in the given are neither saleable nor convertible into money, thus s 171 is of no merit. 
  • The divisional bench of Madras High Court in the case of P. Krishnamachariar Vs. The Official Assignee of Madras; held that an advocate could not have such a lien; unless there was an express agreement to the contrary; and the same view was held by the Patna High Court in In RD SAXENA Vs BALRAM PRASAD. 

Analysis

In the case, it was established that there is a requirement of possession for the start of a lien, which must occur in the case of bailment. A transfer of goods is required for a bailment; however, a lien on a case file is not considered good because it lacks marketability in the legal sense. For the sake of marketability, a person cannot sell a client’s case files to another client. As a result, it will be seen as illegal in the eyes of the law, resulting in professional misconduct.

The punishment, in this case, was reduced, but the court established that it should not be considered under the ambit of precedent. Also, if any individual performs professional misconduct such acts may be severely reprimanded by the Bar Council of India. 

Conclusion

The client-counsel connection is built on trust, which implies a fiduciary relationship; as a result, the relationship should be respected throughout its duration. Ordinarily, a prior agreement between the council and the client is assumed, in which it is specified that the client will pay a set amount as legitimate fees, which will assist counsel in addressing future problems.


References

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