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Narayandas Sundarlal Rathi v. Narayandas Harbhagat
Factual and Procedural Background
This opinion concerns a dispute between two sets of attorneys regarding the handing over of papers and proceedings in a suit filed in 1930, involving the question of a solicitor's lien for costs. The plaintiff, a karta of a joint Hindu family firm conducting business in Bombay, was originally represented by Messrs Tyabji, Dayabhai and Co., who acted as attorneys in various suits for the plaintiff including one from 1919. Due to outstanding unpaid costs and expenses, the attorneys requested further payment in May 1931 and threatened to seek discharge if payments were not made. Subsequently, Messrs Lala and Co. sought to replace Messrs Tyabji, Dayabhai and Co. as the plaintiff's attorneys and applied for an order for change of attorneys. A dispute arose over a clause in the order requiring the former attorneys to hand over all papers and proceedings on payment of their taxed costs, which Messrs Tyabji, Dayabhai and Co. objected to, claiming a general lien over the papers for all outstanding costs. The matter was argued before the Chamber Judge for directions.
Legal Issues Presented
- Whether Messrs Tyabji, Dayabhai and Co. had discharged themselves from acting as solicitors for the plaintiff, thereby obliging them to hand over the papers and proceedings to the new solicitors.
- The extent and application of a solicitor's lien on client papers and costs under Indian and English law, especially in the context of a change of attorneys.
- The conditions under which a solicitor who is discharged by the client must deliver or produce papers and documents.
Arguments of the Parties
Messrs Tyabji, Dayabhai and Co.'s Arguments
- They claimed a general lien on all papers, documents, and books of account relating to the plaintiff's suits for payment of all taxable costs, charges, and expenses incurred.
- They objected to the clause requiring handover of papers upon payment of taxed costs, arguing that they were entitled to retain possession until all outstanding costs were paid.
- They asserted that they had not discharged themselves as solicitors since they continued to act on behalf of the plaintiff after the May 18, 1931 letter, including instructing counsel for adjournment on June 22, 1931.
Messrs Lala and Co.'s Arguments
- They contended that by the letter dated May 18, 1931, Messrs Tyabji, Dayabhai and Co. had effectively discharged themselves by refusing to continue litigation without further payment.
- They argued that the former solicitors must hand over the papers and proceedings to the new solicitors in accordance with the order for change of attorneys.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Lord v. Wormleighton | Discharged solicitor entitled to withhold papers until costs are paid. | Supported the principle that a solicitor discharged by the client may withhold papers until payment of taxed costs. |
| In re Faithfull | Confirmed solicitor's right to withhold papers when discharged by client; lien extends to all costs due. | Used to illustrate the solicitor's lien and right to withhold papers despite client’s embarrassment. |
| Robins v. Goldingham | Solicitor who discharges himself must hand over papers on undertaking by new solicitor. | Distinguished from the present case as the court found former solicitors had not discharged themselves. |
| Bluck v. Lovering & Co. | Even with special stipulations, solicitor discharging himself must hand over papers on proper undertakings. | Reinforced the principle from Robins v. Goldingham regarding self-discharge and handover of papers. |
| Heslop v. Metcalfe | Solicitor entitled to security not inconsistent with progress of the cause. | Supported the solicitor's right to protect costs and obtain security. |
| Griffiths v. Griffiths | Solicitor discharged by client cannot be compelled to deliver papers until all costs are paid. | Applied to confirm the solicitor's lien and right to withhold papers. |
| Bozon v. Bolland | Reinforces solicitor's right to withhold papers when discharged by client. | Supported the court's view on solicitor's lien and withholding papers. |
| In re Broomhead | Courts generally do not interfere with solicitor's lien even if client is prejudiced by delay. | Used to explain the court’s reluctance to order delivery of papers against solicitor’s lien. |
Court's Reasoning and Analysis
The court analyzed the nature of solicitor's lien under Indian and English law, distinguishing between a solicitor who discharges himself and one discharged by the client. It emphasized that a solicitor who discharges himself must hand over papers to the new solicitor on appropriate undertakings, whereas a solicitor discharged by the client is entitled to withhold papers until all taxed costs are paid. The court examined the conduct of Messrs Tyabji, Dayabhai and Co. and found that despite their May 18, 1931 letter threatening to cease work without payment, they continued to act for the plaintiff, including arranging an adjournment on June 22, 1931. Therefore, they had not discharged themselves. Consequently, the court held that the former solicitors were entitled to retain the papers under their general lien for costs, but to avoid hardship to the plaintiff, it ordered that the papers be handed over upon payment or deposit of the taxed costs or estimated costs with an undertaking to refund any excess. The court also allowed the possibility of the new solicitors giving an undertaking to pay the costs when taxed to facilitate handover of the papers.
Holding and Implications
The court held that Messrs Tyabji, Dayabhai and Co. had not discharged themselves and were entitled to retain possession of the suit papers under their general lien for costs.
However, to mitigate hardship to the plaintiff, the court ordered that the papers and proceedings be handed over to the new solicitors either upon payment of the taxed costs or upon deposit of a sufficient sum to cover the costs with an undertaking to refund any excess. The court also permitted the new solicitors to provide an undertaking to pay the costs when taxed to facilitate transfer. No order was made as to the costs of this application. This decision clarified the application of solicitor's lien in the context of a change of attorneys but did not establish new precedent beyond applying established principles to the facts.
1. This suit: has been mentioned to me in chambers for obtaining directions regarding the handing over of the papers and proceedings in the suit by one attorney to another, as the question of solicitor's lien for costs is involved therein. The suit was filed on a commission agency account as a short cause on 17th June 1930. Messrs Tyabji, Dayabhai and Co. are the attorneys on the record for the plaintiff who is the karta or manager of a joint Hindu family firm and residing at Amraoti in the Central Provinces and carries on business in Bombay through his munim and constituted attorney. It appears from the affidavit of Mr. Chhaganlal Dayabhai, a partner in the firm of Messrs Tyabji, Dayabhai and Co., that his firm have acted as attorneys for the plaintiff in various suits and proceedings in this Court, one of the suits being a suit which was filed as far back as 1919. According to the affidavit a large sum of money is due to the firm in respect of the several suits and proceedings even for their out-of-pocket costs and expenses. On 18th May 1931, Messrs Tyabji, Dayabhai and Co. wrote a letter to the plaintiff in connexion with a suit pending in this Court between the plaintiff and Sukhdev Nandram and another, and also several other suits filed by the plaintiff that their, out-of-pocket cost's had exceeded the advances they had received from the plaintiff, and that unless they received a further sum of Rs. 5,000 in the least by the end of the week, and a further assurance from the plaintiff that further moneys would be paid to them from time to time every month against their several outstanding bills, they would have no alternative but to obtain an order for discharge in the plaintiff's several pending suits. Presumably the attorneys also referred to this suit, viz., Suit No. 1174 of 1930, which was also pending. No reply was sent by the plaintiff to that letter, nor were any moneys paid to the attorneys. In the meantime the suit appeared on the board of Tyabji, J. on 22nd June 1931, and Messrs Tyabji, Dayabhai and Co. instructed counsel to apply for an adjournment, and the suit was accordingly adjourned to 22nd August 1931. On 26th June 1931, Messrs Tyabji, Dayabhai and Co. received a letter from Messrs Lala and Co., attorneys, that they were now concerned for the plaintiff in this suit, that they intended to take an order for change of attorneys from the Prothonotary and Senior Master of this Court on 29th June 1931, and they asked Messrs Tyabji, Dayabhai and Co. to be present on that day in the Prothonotary's office. A member of Messrs Tyabji, Dayabhai and Co. accordingly attended the Prothonotary's office on 29th June 1931, and an order for change of attorneys was presented to the Prothonotary for signature by Messrs Lala and Co. The said order contained the following clause:
“And it is further ordered that Messrs Tyabji, Dayabhai and Co. do hand over to Messrs Lala and Co. all the papers and proceedings in the above suit on payment of their taxed costs.”
2. Messrs Tyabji, Dayabhai and Co. objected to this clause and applied for its deletion. They pointed out that large sums of money were due to them in respect of the plaintiff's several suits and proceedings, even for their out-of-pocket costs and that they claimed a general lien for their costs on all the papers and proceedings and books of account in this as well as in other suits in their possession. The Prothonotary thereupon asked Messrs Tyabji, Dayabhai and Co. to obtain the directions of the Chamber Judge, intimating that in the absence of any such directions he would have to sign the order for change of attorneys.
3. Both the attorneys were represented before me by counsel, and the question was argued in chambers on 14th August last. Some decided cases were cited on either side by counsel, though their authority was not disputed by the one side or the other. The law on the subject of a solicitor's lien has been well settled by now in numerous decisions. A solicitor has a lien upon the funds, money or property recovered for his client, but this lien id unlike a lien on documents and papers, not a general lien, but restricted to costs incurred in the recovery of the funds, money or property. He has however a general lien upon all his client's papers and documents for payment of all taxable costs, charges and expenses incurred by him on behalf of his client; and the lien entitles him to refuse production of the papers and documents to his client except on certain conditions. There is however a distinction according to English law, and the same law also applies in India, according to which the rule is quite different when the solicitor discharges himself from what it is when the solicitor is discharged by his client. If a solicitor discharges himself, the client or his new solicitor is entitled to an order not merely for inspection or production of the papers and documents in the former solicitor's possession, but also for delivery thereof on an undertaking to hold them without prejudice to the former solicitors' lien, and subject to the redelivery thereof after the hearing of the suit, and if necessary subject also to an undertaking to prosecute the suit in an active manner. If, on the other hand, the client discharges the solicitor, the solicitor is under no obligation to deliver, nor even to produce or allow inspection of the documents and papers in his possession for the client's benefit, until all his taxed costs are paid. The discharged solicitor is, according to the impression of Lord Eldon in Lord v. Wormleighton (1), in which the representatives, deceased executor declined to continue to employ the solicitor, entitled to make use of the non production of the papers to get at what is due to him, and is entitled to hold over even if the client is embarrassed by the non production of the papers: see In re Faith full (2).
4. In the case of Robins v. Goldingham (3) a solicitor applied to his client for funds to carry on a suit and declined to continue the litigation unless his costs were secured. No moneys were given to him, nor was any security iurnished, and the client obtained an order appointing fresh solicitors. It was held that the solicitor had discharged himself and was bound to hand oyer papers in his possession to the new solicitor on the latter undertaking to hold the same without prejudice to the former solicitor's lien. The result would be the same even if there was a special stipulation for the supply of funds to the solicitor in the retainer: see Bluck v. Lovering & Co. (4). The case of Robins v. Goldingham to which I have referred above, follows the decision in Heslop v. Metcalfe (5), in which the Lord Chancellor stated that the solicitor (p. 190)
“should have every security not inconsistent with the progress of the cause, and (p. 188) the rule of Court must be adopted to every case that may occur.”
5. On the other hand, it was held in Griffiths v. Griffiths (6) and Bozon v. Bolland (7), which are followed in the decision in In re Faithfull to which I have referred above, that the solicitor who is discharged by his client cannot be compelled to afford his client any facilities, and that his right of lien extends to all that is due to him and not only to the amount due in respect of the particular matter or spit to which the papers sought to be produced related. As a rule the Court does not interfere with that lien by ordering the solicitor to deliver up the papers on payment of his bill of costs in that particular suit even if the possession of the papers is necessary for the client to carry on the proceedings and he is damnified by the delay: see In re Broomhead (8); see also Halsbury, Vol. 26, part 1, para. 1340, at p. 818, where the law on the subject of solicitor's lien has been set out in short as settled by the leading cases on the subject. It is however clear that when a solicitor takes up a case and undertakes to conduct it he is bound whether his client is rich or poor to proceed with due diligence and honesty to prosecute or to defend the claim even if he is not put in funds, for it is open to him when he takes up the case to assure himself whether his client is 1 a person of substance. It may be said that this rule will operate harshly on a solicitor because a dishonest client can turn round and not pay his solicitor's dues. To that the answer is that the solicitor can protect himself if he doubts the credit and honesty of his client by insisting on a sufficient advance at the outset to cover all probable costs. It will be really dangerous if a solicitor can be heard to say in the middle of a case that he refuses to act any further for his client unless he is paid all the costs incurred by him and at the same time object to give the papers over to another solicitor.
6. The only question therefore for consideration before me is whether Messrs Tyabji, Dayabhai & Co. have discharged themselves. Counsel for Messrs Lala & Co. said that by reason of the letter dated 18th May 1931, Messrs Tyabji Dayabhai & Co. must in law be deemed to have discharged themselves and that all consequences of such a discharge should therefore follow. If the matter had rested merely with the letter I would have had no hesitation in holding that they had so discharged themselves. But after the date of the said letter the suit appeared on Tyabji, J's., board on 22nd June 1931, and even before the letter of 26th June 1931, from Messrs Lala & Co. intimating the change of attorneys, the former attorneys Messrs Tyabji, Dayabhai & Co. appeared before Tyabli, J., on 22nd June 1931 and instructed counsel for the adjournment, and the suit was peremptorily adjourned to 22nd August. So that after the letter of 18th May they continued to act for the plaintiff and although that letter contains a threat not to proceed with the hearing of the different suits of the plaintiff they seem to have carried on his litigation, especially the present suit. At least there is nothing in the affidavit of Mr. Chhaganlal Dayabhai to show that after the letter they had expressed any unwillingness to carry on the litigation, and the statements therein remain uncontradicted. They have therefore not discharged themselves at any rate not so far as this suit is, concerned and it is a rule of the Court not to sanction a change of solicitors when the former solicitor has not discharged himself so long as his costs remain unpaid.
7. Under the circumstances I hold that Messrs Tyabji, Dayabhai & Co. are entitled to retain the papers in this suit for their costs of this suit as well as of the other suits of the plaintiff. But as this would work hardship upon the plaintiff who is interested in getting the papers, I will not make the extreme order that Messrs Tyabji, Dayabhai & Co. do not hand over the papers in the suit until all their costs of this and the other suits have been paid. I order that Messrs Tyabji, Dayabhai & Co. do hand over the papers and proceedings in this suit either on payment of their taxed costs of this suit or if the costs have nob been taxed on a deposit being made by the plaintiff with them sufficient to cover what would be due to them under their bill of costs including the costs of taxation, on their undertaking to refund the balance if any, over the taxed costs to the plaintiff.
8. Counsel for Messrs Tyabji, Dayabhai & Co. stated that they would also hand over the papers in this suit to Messrs Lala & Co. on the latter giving their undertaking to pay the costs of this suit to Messrs Tyabji, Dayabhai & Co. when taxed. I cannot impose any personal undertaking upon a solicitor, but if Messrs Lala & Co. are willing to give their undertaking as suggested by counsel for the other Bide, Messrs Tyabji, Dayabhai & Co. will hand over the papers in this suit to them. It is also open to Messrs Tyabji Dayabhai & Co. to transfer the papers in this suit to Messrs Lala & Co. on the latter paying the bill of costs and taking the benefit of the lien.
9. As this matter has come up for directions from the Prothonotary's office, in which both the solicitors were equally interested I make no order as to the costs of the application.
B.V/R.K
10. Order accordingly.
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