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Criminal prosecution of client – Non-payment of Legal Fees at 1% of the agreement consideration

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Both the parties appointed the complainant as Legal Advisor for drafting the agreement, power of attorney, notary work and also drafting ancillary documents.   The legal professional fee was fixed at 1% of the consideration of the agreement i.e. Rs.11,00,000/-.

However, the parties did not pay the legal professional fees even after completion of the entire documentation works and receipt of shares of consideration.

On 19.9.2014, on the complaint of the complainant – Advocate filed complaint against the accused, the Magistrate took cognizance under Section 156(3) of Cr PC and directed Naupada Police Station to lodge the FIR for offences under Sections 120B, 406, 417, 427 read with Section 34 of the IPC

Relying on the decision of the Supreme Court in 1954 (2) SCC 171, it was observed that it is not open for a lawyer to have interest in the subject matter of litigation and therefore, entitlement of professional fees of 1% of the consideration of the agreement for each party was not maintainable.

The nature of dispute between the parties being civil in nature, the continuation of the criminal proceedings against the clients – petitioners amount to abuse of process of law.

Judgment dated 19.8.2024 of the Division Bench of the High Court of Bombay in Criminal Writ Petition No.689 of 2016 of Smt. Lilavati Liladhar Thakkar and others   Versus The State of Maharashtra and others

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