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1970 DIGILAW 27 (KER)

In The Matter Of Company and In The Matter Of Banking Regulation and In The Matter Of Popular Bank Limited v. .

1970-01-23

MADATHIMYALLIL UTHUP ISAAC

body1970
ORDER : M.U. Isaac, J. 1. The short question for decision in this report relates to the fee, if any, payable to an advocate appearing in a suit after remand by an appellate court. I shall briefly state the necessary facts. 2. The Official Liquidator filed two applications in this Court, 1 and 2 of 1959, against the directors and some of the employees of the Popular Bank Ltd. (In liquidation), claiming a sum of Rs. 6,50,000. The first application was under section 542 (1) of the Companies Act, 1956, and the second application was under section 543 (1) of the said Act read with section 45H of the Banking Regulation Act, in the matter 1949. Both the applications were allowed with certain directions in respect of the liabilities of the various respondents. They filed appeals in this Court from the judgments of the learned Single Judge. The appeals were partly allowed by a Division Bench of this Court. Application 1 of 1959 was remanded to the Original Judge for determining the individual liability of the directors in the light of the directions contained in the appellate judgment. The parties were also allowed to adduce further necessary evidence. In application No. 2, the liability of the respondents were reduced to Rs. two and odd lakhs. Accordingly, application No. 1 of 1959 came back to the Original Judge; and on 7th March 1969 it was adjourned to 2nd June 1969. In the meanwhile, the parties negotiated for a settlement of the matter; and the Official Liquidator moved for sanction of the winding up court for a compromise of the claim. Sanction was accorded on 24th October 1969. Pending the sanction, the application was adjourned from time to time, till the compromise petition was filed on 10th December 1969. On 15th December 1969, the compromise petition was recorded by the Original Judge; and accordingly application 1 of 1959 was finally disposed of passing a decree in terms of the compromise. Two other applications were also moved before the Original Judge on 15th December 1969, one for impleading the legal representatives of some of the deceased respondents, and another for re-arraying the respondents in application No. 1 of 1959. They were also ordered by the learned Judge, before recording the compromise. In all, there were seven postings, after the case was remanded by the appellate court. They were also ordered by the learned Judge, before recording the compromise. In all, there were seven postings, after the case was remanded by the appellate court. The first, as already stated, was for evidence. But nothing was in the matter done. The remaining postings were not for any specific purpose; but they were obviously done awaiting the result of the negotiations between the parties for settlement and the sanction of the winding up court for the compromise. The Official Liquidator engaged the same advocate in Applications 1 and 2 of 1959 and in all the appeals which arose out of the said applications. He also appeared before the learned Single Judge on all the seven days on which Application No. 1 of 1959 was posted after remand. He has been paid full fees in both the applications and in all the appeals under the relevant rules relating to payment of fees to advocates. Now he claims a sum of Rs. 2,717 for the above appearances in the case after remand; and the Official Liquidator has sought the orders of this Court in the matter. 3. The claim is made under the rules made by the High Court on 7th March 1969 (hereinafter referred to as the Fees Rules) under Articles 225 and 227 of the Constitution regarding fees allowable to legal practitioners in the High Court and the Subordinate Courts read with item (2) 5 in Appendix III of Companies (Court) Rules, 1959. This item provides that fees to advocates in misfeasance applications under section 542 or 543 shall be the same as in a suit for the amount claimed in the application according to the scales in force for suits. Rule 35 of the Fees Rules reads:— "Where a suit or an appeal is remanded, a fee calculated at one-third of the fee allowable under these rules shall be allowed for the hearing after remand, in addition to the fee allowable for the original hearing. Where the appellate Court has called for a finding only, no additional fee shall be allowed for appearance before the Court from which finding has been called for." According to the Advocate, he is entitled under the above rule to get one-third of Rs. 8,150, which would be the fee allowable for a suit for the amount claimed in the misfeasance application. 8,150, which would be the fee allowable for a suit for the amount claimed in the misfeasance application. The Official Liquidator has referred to the proviso to rule 6 (2) of the Fees Rules, according to which the fee payable shall be one-half of the scheduled rate, when a suit is compromised. If the advocate's claim falls under rule 35, the above proviso obviously applies; and the advocate will be entitled only to Rs. 1,358.50, which is one-half of the amount claimed by him. But the question is whether rule 35 applies to the case. Under this rule, the fee allowed "for the hearing after the remand" is one-third of the fee allowable for the suit and it also provides that no fee shall be allowed for appearance before the Court from which the finding has been called for. In other words, a fee is allowed for the hearing, only when the case is remanded for disposal, and no fee is payable for the hearing, if the case is remanded for a finding. There maybe only one hearing in a case remanded for disposal; while there may be a number of hearings in a case remanded for a finding. Yet, as the Fees Rules stand, one-third of the original fee is allowed in the former case, and nothing at all is allowed in the latter case. This is an apparent defect in the Rules. I am not, however, concerned with it now. The case before me is one remanded for disposal; but all the same fee is allowed under the rule only "for the hearing", and not for appearance for the hearing. 4. The word "hearing" is not defined either in the Fees Rules or in the Civil Procedure Code; but it appears in several contexts and at different places in the Code. Order XVII, rule 2 C.P.C. provides that where any day to which in the matter the hearing of the suit is adjourned, the parties or any of them fail to appear, the court may proceed to dispose of the suit in one of the modes directed, in that behalf by Order IX or make such other order as it thinks fit. The question arose before the Privy Council in Lachmi Narayan v. Balmukund A.I.R. 1924 P.C. 198 whether a day to which a suit was posted after remand for the purpose of further action is a day to which the hearing of the suit is adjourned, and whether the suit can be dismissed for the non-appearance of the plaintiff on that day. In this case, the High Court had held that the hearing mentioned in the above rule occurs only when the Judge is taking evidence or hearing arguments or otherwise coming to the final adjudication of the suit, and also when it is posted for settlement of issues. The High Court also held that a date to which the suit is posted for decision of some interlocutory matter for the future conduct of the suit is not a date of hearing. The Privy Council, however left the question open, after noticing the above view expressed by the High Court. The same question arose in the Lahore High Court in Manohar Dass v. Birandari A.I.R. 1936 Lahore 280. The court held that "by the hearing of the suit is meant the hearing to which the Judge would be either taking evidence or hearing arguments or would have to consider questions relating to the determination of the suit which would enable him finally to come to an adjudication upon it". Reference may also be made to the decision of the Punjab High Court in Sohan Singh v. Hans Raj A.I.R. 1960 Punjab 34. Dealing with the meaning of the word "hearing" appearing in Order IX, rule 6 C.P.C., the court said : "I think the word 'hearing' in rule 6 of Order 9 of the Code of Civil Procedure has been used not in its broad or general sense but in its technical sense to mean a hearing at which the Judge either takes evidence or hears arguments or considers questions relating to the determination of the suit which would enable him finally to come to an adjudication upon it; Balmukund Marwari v. Lachmi Narain Marwari (A.I.R. 1920 Pat. 595), Mt. Barkat Bibi v. Fatch Ali (A.I.R. 1949 Lah. 63). 595), Mt. Barkat Bibi v. Fatch Ali (A.I.R. 1949 Lah. 63). A day on which interlocutory matters concerning the future conduct of the case are taken up for consideration does not fall within the ambit of the expression 'the date of the hearing'." The word "hearing" is a very comprehensive expression; and its meaning may vary to some extent according to the context in which it is used. In the case before me, the application was first posted for evidence. It is certainly a posting for a hearing. All subsequent adjournments were pending negotiation for settlement of the case; and not for any purpose. Nothing was done either on the date to which the application was posted for evidence or on any of the adjourned dates, except on the last date. On this date, the compromise petition was recorded; and in the light of that, two interlocutory petitions were ordered and the suit was decreed in terms of the compromise. None of these things amounts to a "hearing" of the main application in any sense of that term. No evidence was taken and no arguments were heard; and there was no occasion for either. In other words there has been no hearing of the case after the remand. It follows that no fee is allowable under the Fees Rules for the appearance of the advocate in the case after remand.