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Hormusji K. Bhabha v. Nana Appa
Structured Summary of the Opinion (Murphy, J.)
Factual and Procedural Background
On November 30, 1931 Mr. Sorab B. Dadyburjor, advocate for Mr. Hormusji K. Bhabha, applied to the Registrar of the Small Causes Court to institute a suit for rent of Rs. 24. The application was signed by Mr. Dadyburjor who stated he was acting for Mr. Bhabha on the strength of a vakalatnama (an appointment in writing), which was unstamped.
Prior to that, on November 7, 1931, Order III, Rule 4 of the Civil Procedure Code was applied to the Small Causes Court by amendment of the Schedule and Rules of Practice. On November 12, 1931 the Chief Judge issued a notice holding that vakalatnamas used in the Small Causes Court fall within the definition of "power-of-attorney" in section 2(21) of the Indian Stamp Act and are chargeable with a Re. 1 stamp under Article 48(b) of Schedule I of the Indian Stamp Act; the Chief Judge directed that unstamped vakalatnamas should not be accepted.
Acting on that notice, the Registrar on December 1, 1931 refused to file the suit unless the plaintiff himself signed the application because the vakalatnama was unstamped. An appeal to the Chief Judge resulted in upholding the Registrar's order, the impounding of the vakalatnama, and sending it to the Collector of Bombay. The Collector held it to be a power-of-attorney requiring a Re. 1 stamp and imposed a penalty of Rs. 5. The rent suit therefore remained unfiled.
Two civil revision applications were presented to the High Court: one by Mr. Bhabha (the plaintiff) and one by Mr. Dadyburjor (the advocate) against the Chief Judge and the Registrar of the Small Causes Court. Rules issued in each matter. The Advocate General raised preliminary objections as to locus standi (against Mr. Dadyburjor) and the applicability of section 115 of the Civil Procedure Code (against Mr. Bhabha). The Court discharged the rule issued on Mr. Dadyburjor's application for want of locus and proceeded to consider Mr. Bhabha's application on the merits.
Legal Issues Presented
- Whether the written appointment authorizing an advocate to act and plead for a client in the Small Causes Court (a vakalatnama) requires a Re. 1 revenue stamp under Article 48(b) of Schedule I of the Indian Stamp Act.
- Whether such a vakalatnama falls within the definition of "power-of-attorney" in section 2(21) of the Indian Stamp Act (i.e., whether it "empowers a specified person to act for and in the name of the person executing it").
- Preliminary jurisdictional issues: whether the advocate (Mr. Dadyburjor) had locus standi to apply for revision, and whether Mr. Bhabha's revision lay under section 115 of the Civil Procedure Code (or whether the High Court's jurisdiction to interfere arose under other provisions such as section 7 of the Government of India Act, the Letters Patent, or Regulation II of 1827).
Arguments of the Parties
Advocate General (for the Chief Judge and Registrar)
- Objected to Mr. Dadyburjor's application on the ground that he had no locus standi to bring the revision.
- Objected to Mr. Bhabha's application on the ground that it did not lie under section 115 of the Civil Procedure Code.
Arguments advanced on behalf of the petitioner(s) (as recounted in the opinion)
- It was urged (by counsel identified as Mr. Coyajee and more generally on behalf of the petitioner) that vakalatnamas used in the Small Causes Court did not require stamping under the Indian Stamp Act because they were exempted by reason of their court-fees status; a legal distinction was drawn between "exempted" and "not chargeable" with court-fee stamp and argued to be material.
- It was contended that a vakalatnama does not authorise an advocate to act "in the name of" his client, and therefore does not satisfy the language of the definition of "power-of-attorney" in section 2(21) of the Indian Stamp Act.
- It was also argued that the juxtaposition of "document in writing" and "power-of-attorney" in Order III, Rule 4(1) CPC demonstrates a legislative distinction between a vakalatnama and a power-of-attorney.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bombay Steam Navigation Co. v. Vasitdev | Cited for the High Court's jurisdiction to review orders of subordinate courts under section 7 of the Government of India Act / Letters Patent / Regulation II of 1827. | Referred to as supporting authority for the Court's competence to entertain Mr. Bhabha's revision despite issues with section 115 CPC. |
| Bai Chandan v. Chhotalal | Cited, along with the above, in relation to the High Court's revisional jurisdiction under Letters Patent / Regulation II of 1827. | Referred to as an authority showing alternative bases for the High Court's jurisdiction to examine subordinate court orders. |
| Appa Rao v. Subba Rao | Authority for the proposition that the relation between client and advocate engaged to act for him is that of principal and agent. | Used to support the view that a vakalatnama creates an agency relationship between client and advocate. |
| Sheikh Abdul Ghaffar v. F.B. Downing | Deals with the distinction between a power of appointment to a barrister and to a non-barrister advocate; observes that a power of appointment to an advocate who acts for his client comes within the category of a power-of-attorney. | Not treated as decisive on the precise point in the present case but noted as addressing related distinctions. |
| Parmanund v. Sat Prasad | Decides that a power of appointment given to a person who is not a pleader or a certified mukhtyar cannot fall under Article 10 of Schedule II of the Court-fees Act. | Observed as not touching the present question; cited to distinguish the present issue from other court-fees questions. |
Court's Reasoning and Analysis
The Court proceeded in stages. First, it disposed of the preliminary locus point: Mr. Dadyburjor, not being a party to the suit, had no personal grievance redressible by the revision application and therefore the rule issued on his application was discharged.
On Mr. Bhabha's application the Court examined the jurisdictional question. Although the application raised issues about the proper scope of section 115 CPC, the Court held that the matter could also be entertained under other jurisdictional heads (section 7 of the Government of India Act, the Letters Patent, and Regulation II of 1827), citing earlier authorities (Bombay Steam Navigation Co. v. Vasitdev and Bai Chandan v. Chhotalal). Having decided it had jurisdiction, the Court proceeded to the merits.
The merits turned on the statutory definition of "power-of-attorney" in section 2(21) of the Indian Stamp Act: "'Power-of-attorney' includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it." The Court analysed the components of this definition in light of the vakalatnama used in the Small Causes Court.
Key steps in the Court's analysis:
- The vakalatnama in the case expressly appointed the advocate "to appear, plead and act as Advocate for him in the above suit." Prima facie this empowers a specified person to act for the client, and signing a pleading is clearly an act performed by that advocate in the litigation.
- The Court examined whether the vakalatnama also enabled the advocate to act "in the name of" the client. It concluded that when an advocate acts for his client he carries on the litigation in the client's name by virtue of substitution; the advocate does not litigate in his own name but in the client's name. Thus the requirement of acting "in the name of" is satisfied.
- The relationship between client and advocate was held to be one of principal and agent; Appa Rao v. Subba Rao was cited for the proposition that the document creates agency. The Court acknowledged that advocates are a special class of agent with particular privileges and restrictions, but these distinctions do not take the vakalatnama out of the category of a power-of-attorney if it meets the statutory definition.
- The Court addressed the bracketed phrase in section 2(21) concerning instruments "not chargeable with a fee under the law relating to court-fees." It held that vakalatnamas filed in Presidency Small Causes Courts are not chargeable with a court-fee stamp (by reason of the Court-fees Act and its application to Presidency Small Causes Courts). The Court rejected arguments that a meaningful distinction existed between "exempted" and "not chargeable" in this context, treating the vakalatnama as falling within the intended scope of the definition's bracketed limitation.
- Having found that all conditions of the statute's definition were fulfilled by the vakalatnama in the present case, the Court concluded that the document was a "power-of-attorney" within section 2(21) and therefore required stamping under Article 48(b) of Schedule I of the Indian Stamp Act.
- The Court noted that the authorities cited by counsel were not decisive of the precise question before it (for example, Sheikh Abdul Ghaffar and Parmanund were considered but found not to settle this point).
Divatia, J. delivered a concurring view reflecting similar legal reasoning: he accepted the principal-agent analysis, rejected the distinction between "exempted" and "not chargeable" for present purposes, and concluded that if a vakalatnama meets the statutory definition of a power-of-attorney it must be stamped under the Indian Stamp Act.
Holding and Implications
Core Ruling: Applications dismissed.
More specifically:
- The revision application presented by Mr. Dadyburjor was discharged for want of locus standi.
- The revision application presented by Mr. Bhabha was considered on the merits and dismissed; both rules issued were discharged — the first (Mr. Bhabha's) without costs and the second with costs (as the opinion records).
- The Court held that a vakalatnama used in the Presidency Small Causes Court, where it is not chargeable with a court-fee stamp, nevertheless falls within the definition of "power-of-attorney" in section 2(21) of the Indian Stamp Act when it empowers a specified person to act for and in the name of the person executing it, and consequently such an instrument is chargeable with a Re. 1 stamp under Article 48(b) of Schedule I of the Indian Stamp Act.
Direct consequences stated in the opinion (as left in force by the Court's dismissal):
- The Chief Judge's notice of November 12, 1931 (treating vakalatnamas as falling within the Stamp Act definition and requiring a Re. 1 stamp) was upheld as correct in law.
- The Registrar's order refusing to file the plaint when supported by an unstamped vakalatnama, the impounding of the vakalatnama, and the Collector's determination that the document required a Re. 1 stamp (and imposition of a Rs. 5 penalty) remained effective given the dismissal of the revisions.
The opinion does not claim to establish a wider novel precedent beyond applying the statutory definition to vakalatnamas in the circumstances described; it records that cited authorities were not decisive and rests its ruling on statutory construction and on the principal-agent analysis.
Applications dismissed.
Judgment delivered by: Murphy, J. (with Divatia, J. concurring).
Murphy, J.:—
The question raised in these two civil revision applications is, whether the appointment in writing required to be given to an advocate to act and plead for a client in the Small Causes Court, requires a revenue stamp of Re. 1 or not, and the answer depends on the further question of, whether such a document is a power-of-attorney, or not.
The facts on which these applications are based were, that on November 30, 1931, Mr. Hormusji K. Bhabha's advocate, Mr. Sorab B. Dadyburjor, made an application to the Registrar of the Small Causes Court to institute a suit for rent due—Rs. 24—from one of Mr. Bhabha's tenants. The application was in order, except that it was not signed by Mr. Bhabha as it might have been, but by Mr. Dadyburjor purporting to act for him, on the strength of what is called in our Courts a vakalatnama, which was unstamped.
It appears that, on November 7, 1931, what is Order III, rule 4, of the Civil Procedure Code, was applied by the High Court to the Small Causes Court, Bombay, by an amendment of the Schedule and Rules of Procedure and Practice of the Court of Small Causes.
On November 12, 1931, the Chief Judge of the Court of Small Causes issued a notice to the effect that from that date the document referred to in the amendment, which authorizes any advocate to act and plead on behalf of his client and which is commonly known as a vakalatnama, falls within the definition of “power-of-attorney” in section 2(21) of the Indian Stamp Act, and is chargeable with a stamp duty of Re. 1 under Article 48(b) of Schedule I of the Indian Stamp Act, as amended. The Chief Judge, therefore, directed that no such document should be accepted in Court or office, without the requisite stamp, as from November 12, 1931.
These orders being in force, the Registrar of the Small Causes Court, on December 1, 1931, made an order that the suit could not be filed unless the plaintiff himself signed the application, as Mr. Dadyburjor's vakalatnama was unstamped. Against this order an appeal was made to the Chief Judge, and the question was argued before him. He upheld the Registrar's order, impounded the document, and sent it to the Collector of Bombay, who held that it was a power-of-attorney and required a stamp of Re. 1 and imposed a penalty of Rs. 5. This is the stage matters have reached in that Court, and the suit for rent remains unfiled.
Two Revision Applications have been presented to this Court, and rules have issued in each. One is by Mr. Bhabha the plaintiff, and the second by Mr. Dadyburjor, hi advocate, against the Chief Judge and Registrar of the Small Causes Court, for whom the learned Advocate General has appeared.
The learned Advocate General has objected that Mr. Dadyburjor's application does not he at all, as he has no locus standi, and that Mr. Bhabha's does not lie within section 115 of the Civil Procedure Code, but we have also heard both sides on the merits.
It is clear, in the first place, that Mr. Dadyburjor, not being personally a party to the suit, can have no grievance, or at any rate, cannot have it redressed by means of such an application, and that the rule issued on his application must be discharged.
As to the application made by Mr. Bhabha, the usual difficulty of defining a question of jurisdiction under section, 115, its exercise or not, and its exercise with material irregularity or not, has arisen. We have been referred to all the relevant rulings, but the point has been so often discussed that it seems unnecessary to add yet another discussion to those already reported.
The relevant facts here are that on a consideration of the question of the necessity or otherwise of a stamp on this vakalatnama, the learned Chief Judge came to the conclusion that it was not in order for lack of the necessary stamp. This is, I think, a finding on a question of law, and not of jurisdiction. Some order should then have been made, rejecting the plaint or what takes the place of the plaint in the Small Causes Court, on the ground that it had not been legally presented—as not having been signed by the plaintiff or his duly empowered attorney or recognised agent, but no such order appears to have been made. Assuming, however, that it has been, the result does not seem to me to involve a question of jurisdiction, for a Court can have none to exercise until the claim is before it according to law—and the question whether it is so or not, is still a question of law—the interpretation of, in this case, the rules of procedure governing the Small Causes Court and the Indian Stamp Act. I think that the application does not lie under section 115 of the Civil Procedure Code. But it has been held by this Court that it is not only under that section, but also under section 7 of the Government of India Act, under the Letters Patent, and under Regulation II of 1827, that this Court has jurisdiction to consider, and, if necessary, to rectify orders passed by Courts subordinate to it. I need only refer to Bombay Steam Navigation Co. v. Vasitdev and Bai Chandan v. Chhotalal. I must, therefore, I think, discuss the merits of Mr. Bhabha's application.
It is common ground that until the Chief Judge's notice of November 12, 1931, “vakalatnamas”, as I will call them for short, used in the Small Causes Court, did not need to be stamped, as that Court is one of those exempted from the application of the Court-fees Act.
The definition of a “power-of-attorney” in section 2(21) of the Indian Stamp Act is—
“‘Power-of-attorney’ includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it:”
It is clear that a vakalatnama to be used in the Small Causes Court comes within the portion of the definition in brackets as not chargeable with a fee under the Court-fees Act. That Act does not apply to the High Court and the Presidency Small Causes Court, as a different scale of fees is enforced in these two Courts.
Mr. Coyajee has argued that vakalatnamas to be used in the Small Causes Court are exempted a ad that there is a legal difference between the expressions “exempted” and “not chargeable”, but if there is, it can be only verbal, for the effect is exactly the same, and they are but different expressions for the same idea.
The vakalatnama in this case is in the following words—
“The plaintiff abovenamed appoints Mr. Sorab B. Dadyburjor, B.A, LL.B, Advocate, High Court, to appear, plead and act as Advocate for him in the above suit.”
Prima facie, this document empowers a specified person to act for Mr. Bhabha, and to sign a pleading is clearly an act. The pleading, called a cause of action, is as follows:—
“Cause of Action.”—
“Rent of Room No. 7 in House No. 8-52A, and 2, Khetwady, 13th Lane, for September, October and November 1931 at Rs. 8 per month.”
P. Colaba.
D. Khetwady.
(Signed) Sorab B. Dadyburjor,
Plaintiff's Advocate.”
“The cause of action” is headed with Mr. Bhabha's name as plaintiff. Mr. Dadyburjor was clearly deputising for Mr. Bhabha, and signing the cause of action for him. Mr. Coyajee has suggested that he was not acting in the name of Mr. Bhabha. To act in the name of another, is to act on behalf of that other and not on one's own behalf—to represent that other person in proceedings carried ou in that other person's name, and not in one's own, and this was clearly the case here. In the ordinary course the expression used would be—“For Mr. H.K Bhabha by his constituted power-of-attorney—Sorab B. Dadyburjor”. The expression “Sorab B. Dadyburjor plaintiff's Advocate”, is, I think, an equivalent, differing only in the description of the person acting in the special case of an advocate. It is true that a barrister is not technically his client's agent—the special character of a barrister depending on an ancient historical reason. But the contract between an advocate, A.S, and his client is one governed by the general rules of contract of the Indian Contract Act. He may be sued for negligence as an agent and can sue for his fees. He is a special kind of agent, or an agent selected out of a special class, for whom this kind of agency contract is reserved by law, but nevertheless governed by the law relating to agency.
I think that the distinctions sought to be made on the strength of the expression “in the name of” in the definition of a “power-of-attorney” and the argument that an advocate, A.S, is not his client's agent, are not real ones. If I am correct in so thinking the document in question is a power-of-attorney falling within the definition of that class of documents, and, if so, chargeable with the appropriate stamp duty.
Both these rules are discharged, the first by Mr. Bhabha without costs and the second with costs.
Divatia, J.:—I agree. As regards the preliminary objection, the order applied against is no doubt an interlocutory order made even before the plaint was entertained, and ordinarily this Court would not interfere with such an order. However, in view of the fact that the order implies a reversal of a longstanding practice and the point is not covered by any judicial authority, we have allowed counsel to argue the point on its merits.
It is common ground that a vakalatnama filed in a Court of Small Causes at the Presidency-towns does not require any Court-fee stamp by virtue of sections 3 and 6 of the Court-fees Act, and, therefore, the provisions of Article 10 of Schedule II of that Act which provides generally for Court-fee stamps on a mukhtyarnama or a vakalatnama do not apply to a vakalatnama filed in Presidency Small Causes Courts. The question is, whether the latter is required to be stamped under the Indian Stamp Act as being a sort of power-of-attorney and as such requiring a stamp of one rupee under Article 48(b) of the First Schedule of that Act, as applied to Bombay. The answer must be that if it falls under the definition of “power-of-attorney” as that term is defined in section 2(21) of that Act, it must be so stamped. If not, it does not require to be stamped at all under the Indian Stamp Act. Nona that definition runs thus:—
“‘Power-of-attorney’ includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it.”
The contention urged on behalf of the petitioner is that a vakalatnama does not come under this definition because, although it empowers an advocate to act for the party giving it, it does not authorise him to act in the name of his client, and it is also contended that the definition applies to an instrument which is not chargeable with a Court-fee stamp while a vakalatnama in a Presidency Small Causes Court is exempt from the Court-fees Act, and is not simply not chargeable, as contrasted with documents stated in section 19 of that act which are made not chargeable under the Act. It is finally urged that the words “document in writing” used in Order III, rule 4(1), of the Civil Procedure Code, in juxtaposition with the words “a power-of-attorney” in the same sub-rule would show that the legislature has made a distinction between a vakalatnama and a power-of-attorney.
Now in the first place it is necessary to observe that the relation between a client and his advocate who is engaged to act for him is that of a principal and agent. If any authority is necessary, it would be found in Appa Rao v. Subba Rao. The document, therefore, creates agency and clearly enables the advocate to act for his client, but does it empower him to act in his name also? I think when an advocate acts for his client, he does all his work in the name of his client in the sense that it is by virtue of his vakalatnama which is an instrument of substitution that he does all acts in the litigation which otherwise his client would have done himself in his own name, and he carries on the litigation not in his own name but in the name of his client. It is true that his rights and liabilities under the vakalatnama are different from those of a lay agent holding a power-of-attorney on behalf of a litigating party, called a recognised agent, e.g, he can plead and exercise all the rights accorded to an advocate, which a mere recognised agent cannot enjoy. At the same time he cannot terminate his appointment without the leave of the Court, while a recognised agent can do so without any such leave. But all these considerations do not take a vakalatnama out of the category of a power-of-attorney if it fulfils all the conditions laid down in its definition. The fact that under Order III, rule 4(1), the appointment of a pleader could be made not only by a party himself but also by a person holding a power-of-attorney from the party to make such appointment does not mean that the pleader's authority itself does not amount to a power-of-attorney. It only means that a party can authorise a person to do all acts on his behalf in a litigation including the appointmnet of a pleader. That, however, does not imply a contra-distinction between a pleader and a person holding a power-of-attorney. A pleader can derive his authority not only from his client directly but from any person who is specially authorised to make such appointment.
Then there remains the expression “not chargeable with a fee under the law relating to Court-fees for the time being in force” in the said definition. It is clear as stated above that a vakalatnama in the Presidency Small Causes Court is not chargeable with a Court-fee. This expression includes all instruments which do not require a Court-fee stamp and this vakalatnama is such an instrument. The distinction sought to be made between “exempted” and “not chargeable” does not, in my opinion, hold good, because just as section 19 of the Court-fees Act enacts that certain documents are not chargeable with any fee, so also under section 6 of that Act the present document is excepted from chargeable documents which would mean that it is not made chargeable. The intention of the legislature, therefore, appears to be that a document fulfilling the requirements of a power-of-attorney, must be stamped under the Indian Stamp Act provided it does not require a Court-fee stamp.
In my opinion, all the conditions of the definition are fulfilled in this case, and, therefore, the vakalatnama requires to be stamped under Schedule I, Article 48(b), of the Indian Stamp Act.
None of the authorities cited during the arguments are decisive of the point. The case of Sheikh Abdul Ghaffar v. F.B Downing is concerned with the distinction between power of appointment filed by a barrister advocate and a non-barrister advocate, although it is observed there that a power of appointment to an advocate who acts for his client comes within the category of a power-of-attorney. The case of Parmanund v. Sat Prasad also does not touch the present point. It simply decides that a power of appointment given to a person who is not a pleader or a certified mukhtyar cannot fall under Article 10 of Schedule II of the Court-fees Act.
For these reasons, I agree that the order made by the learned Chief Judge is correct and both these applications should be dismissed.
Applications dismissed.
J.G.R
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