Frame Guidelines To Regulate Lawyers' Fee, Delhi HC Asks BCI [Read Order]

Justice Prathiba M. Singh observed that conduct of a lawyer of taking blank cheques as security for fees from the client and encashing the same without the permission of the client clearly constitutes professional misconduct.

The court made this observation in a case where the plaintiff had filed an application before the court stating that she had engaged Advocate P.K. Chauhan as her counsel and later she withdrew his services and requested him not to appear in any of her cases. She submitted that he had with him various blank signed cheques which he had taken as security for his professional fee.

The court also noted that there are 3 criminal complaints under Section 138, one complaint by the counsel against his client as also her newly engaged lawyer and finally another complaint with the police by the client against her counsel. Disapproving this conduct, the court said:

"One fact is clear from the statements made by both the counsel and the client, i.e. that several cheques were accepted by the counsel as security for his professional fee. Apart from taking the cheques, he has also clearly presented the same in the bank after his services were withdrawn by the Plaintiff. The facts in the present case are demonstrative of the misconduct that could be indulged in by lawyers against litigants, including in the manner of collection of fees, practices adopted to recover fees etc., While it may be true that litigants may not pay the agreed fees to lawyers, the same cannot justify conduct of taking blank cheques as security for fees and encashing the same without the permission of the client. Such practice clearly constitutes professional misconduct to say the least. The filing of criminal complaints against a client due to alleged non-recovery of fees, is the final straw."

At this juncture, the counsel rendered an unconditional apology and also undertook to withdraw all the complaints filed by him including complaints filed under the Negotiable Instruments Act, 1881. The court then observed that it is not inclined to take any action against him. In this context, the court further observed:

"There is a severe gap/lacuna in the Rules which could lead to harassment and frustration to litigants, as has happened in the present case. In order to ensure that there is some regulation of the manner of charging professional fee by advocates and also for providing a Forum to air grievances of the litigants, there is an urgent need to frame some guidelines/rules".

The court then directed the Bar Council of India to consider framing Guidelines prescribing the manner of charging professional fees by lawyers to address the following issues:

• Manner of determining the fee consistent with the standing in the Bar, as prescribed in Rule 11;

• Manner of determining the fee consistent with the nature of the case, as prescribed in Rule 11;

• Reasonable fee that can be charged by lawyers, especially from individual litigants and whether some broad parameters should be prescribed;

• Reduction of the fee agreement in writing in some form;

• Charging of professional fees in kind and whether the same is permissible;

• Issuance of receipts upon accepting the professional fees and whether the same ought to be mandatory;

• Insistence of payment of fees in cash beyond the prescribed limits in law;

• Demanding and accepting security in any form, for professional fee and whether the same is permissible; modes of recovery of outstanding fees from litigants;

The court also directed the Bar Council of India to consider creation of a resolution mechanism including appointment of an external Ombudsman to deal with any complaints from litigants in respect of professional fees charged or practices adopted. Timelines for resolution of such complaints may also be prescribed, the court suggested.

Read Order