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This article will help you better understand whether a lawyer can legally refuse to return the documents if the client has not paid the fees. We shall also explore the legal and ethical aspects and provide valuable insight for lawyers, clients, and law students. So, if you have any confusion whether withholding a client’s document is justified or if the client has an absolute right to their documents, then this article is for you. 

Introduction

So, today, let me tell you an interesting matter my clerk referred to me. 

My clerk mentioned that the client was some of his distant relative and the earlier lawyer took money from him and did nothing substantial in the matter. I asked him to send him after two days. 

When the client came, he seemed disappointed with the unprofessional approach of his earlier lawyer. He wanted to change his lawyer as he was not satisfied with his work. 

I asked him why he wanted to change his lawyer, so that is when he poured his heart out that his earlier lawyer had taken almost Rs.50,000/- as an advance from him and the balance amount of Rs.50,000/- had to be paid after obtaining the interim order.

However, his lawyer did nothing substantial besides taking adjournments and was not paying attention to the matter.

Being dissatisfied and frustrated with his work, the client approached the lawyer and asked him to return the papers and other essential documents so that he could appoint a new lawyer. 

But the client was shocked to hear, “Sure, just clear my outstanding fees, and I will hand over the papers to you.” 

The client looked at me as if his earlier lawyer had committed some heinous crime. At that moment, all I could think was, here we go again.

I have been in this profession long enough now to know that lawyers struggle to recover their fees because either the client is unhappy with the work, or they are short on money or maybe they keep pushing it to the next month. 

It is like a classic case where the important documents of the client act as a mode for negotiation and the lawyers keep it with them till the client pays them their fees.

Most think this tactic will eventually put pressure on the client to pay their outstanding fees.

But is this legal? Ethical? What do you think?

Let us read further to understand what I explained to my client. 

I gave a solution to my client and he was happy to know that he could get his documents back.

Do you want to know what solution I gave my client?

Today, I will share with you what lawyers and clients can do in such a situation.

But first, let us understand the legal provisions that govern it.  

What are the legal provisions?

Do you know that in India, the law is very clear that lawyers cannot withhold documents of the client until they are paid, unlike other countries, where lawyers may have the right to retain documents until they are paid?

Although it is a common practice, but this is definitely not legal.

So, section 49 of the Advocates Act, 1961, lays down the general powers of the Bar Council of India to make rules. As per section 49 (1) (c) of Advocates Act, 1961, the Bar Council of India is empowered to make rules relating to the standards of professional conduct and etiquette to be observed by advocates.

Accordingly, the Bar Council of India has framed rules in Chapter II of Part VI of Bar Council of India Rules that lays down the standards for professional conduct and etiquette.

These rules mention various duties towards the court, client as well as opponent that every advocate is required to abide with. 

You can find all the duties that a lawyer has towards a client here.

But today I will discuss the duties of a lawyer who has not been paid his fees, later in this article.

I know you might ask why this practice is illegal, though. Let us read further to know why.

Why is this practice of refusing to return the documents illegal?

Why do you think lawyers adopting such a practice is not permissible?

The reason is simple.

Unlike other professions, law is considered as a noble profession that is built on mutual trust, fairness and professional ethics between lawyers and clients.

Law is meant to protect its people and lawyers play a very crucial role in ensuring that justice is delivered to the client. Therefore, it is expected that lawyer should never use their position to pressurise the clients for money or act like goons recovering money.

When clients approach lawyers, they trust the lawyers with their important documents, so now you can only imagine what impact it can have on a client if that trust is broken, and the lawyers start using these documents to force payments.

It will take away the trust and faith the public has in the Indian judiciary and the lawyers.

That is why such practices are strictly prohibited.

So, if a lawyer fails to return documents in this manner, it violates professional ethics. I have also covered the legal provisions below for you to understand better. Do you know such conduct on the part of a lawyer would be considered as professional misconduct by the lawyer and the lawyer shall be liable to be punished under section 35 of the Advocates Act, 1961.

Since I am talking about this topic, it will be incomplete if I do not mention about the landmark case on this topic, which is none other than the case of R.D. Saxena v. Balram Prasad Sharma [(2000) 7 SCC 264], the case that put this issue to rest in India. Moving on to the judgement. 

What was the ratio laid down in the case of R.D. Saxena v. Balram Prasad Sharma?

For easy understanding, I am explaining the judgement under various headings.

First, let us see what the issue was? 

Background of the case

• R.D. Saxena was appointed as the legal advisor for the Madhya Pradesh State Co-operative Bank Ltd. in 1990 and the bank terminated his services on July 17, 1993.
• The bank requested R.D.Saxena to return back all the papers. However, he refused to return back the papers stating that he had a right of lien over the papers until he was paid Rs.97,100, which were his pending legal fees.
• The managing director filed a complaint with the Madhya Pradesh State Bar Council on February 3, 1994, alleging professional misconduct on the part of R.D.Saxena.
• The matter was then referred to the Bar Council of India’s disciplinary committee under Section 36B of the Advocates Act, 1961.
• The Bar Council held R.D.Saxena guilty of professional misconduct and he was fined Rs.1,000. He was also debarred from practicing for 18 months and was directed to return the papers to the bank immediately.  
• R.D.Saxena being, aggrieved, filed an appeal to the Supreme Court and argued that he had a legal right to retain case files until his dues were cleared.

These were the facts of the case. Let us move to the issues that were involved in the case

Legal issues that are involved in this case

• Can an advocate for unpaid fees have a lien over the client’s documents?
• Can litigation papers be considered ‘goods’ under section 171 of the Indian Contract Act, 1872?
• Does withholding papers of a client amount to professional misconduct?

Next, we see the provisions that were dealt with in this case

Legal provisions that have been discussed in this case

• Section 148 of the Indian Contract Act, 1872 – This section defines bailment as delivery of goods for a specific purpose with an obligation to return it back. In this case, the court examined whether the papers or documents of the client be considered as goods under bailment.
• Section 171 of the Indian Contract Act, 1872 – This section outlines the general lien of bankers, wharfingers and attorneys, allowing them to retain goods bailed to them as security for a general balance of account unless there is a contract to the contrary. In this particular case, the court examined whether this section would apply to client’s documents and papers.
  
• Article 22 of the Constitution of India – This article provides for the right of a person to consult and choose a legal practitioner. The court, in this case, considered whether a lawyer withholding case files restricted this right under Article 22(1).
  
• Section 35 of the Advocates Act, 1961 – This deals with disciplinary action to be taken against lawyers for misconduct. The court, in this case, considered whether refusal to return the papers would amount to professional misconduct. 

Coming to the observation of the judges in this case

Observations of the court and the final judgement

• R.D.Saxena was found guilty of professional misconduct. 

• The court observed that advocates cannot claim a lien over the papers of the client. Hence, the papers or documents of the client are not covered under section 171 of the Contract Act. It also went on to clarify that these documents or papers cannot be sold or transferred. To come under the purview of goods, it has to either be moveable or saleable.
  
• The court also observed that the relationship between a lawyer and client is not that of a bailment as is under Section 148 of the Contract Act. The documents or the papers were not delivered by the client with an obligation for return like in any bailment contracts. 
• The Court ruled that such conduct on the part of a lawyer to withhold papers or documents of the client is a breach of professional ethics and violates a lawyers fiduciary duty.
  
• The court also held that every person has a right to appoint and also to change their lawyers. By not returning the papers or documents to the client, the lawyer violates the right of the client to legal representation.
• The court also held that the advocate must return the papers and documents and that the lawyer can recover the unpaid fees through legal channels but not by holding papers and documents as ransom.
  
• The court upheld the decision of the Bar Council but reduced the punishment. Instead of an 18-month suspension, R.D.Saxena was only reprimanded as there was no clear precedent on this issue earlier.

What did you understand reading about this judgement? Let me tell you. 

The Supreme Court in this landmark judgement defined the professional and ethical responsibilities of a lawyer towards their client. It also set a precedent that the lawyers cannot hold onto papers as a means to recover unpaid fees. This decision also ensures that clients have uninterrupted access to their legal documents and can seek justice without any hurdles.

Now that we know about the legal provisions and also why such a practice is not legal, you must understand what the duties of an unpaid lawyer are.

What are the duties of an unpaid lawyer?

You might indeed be wondering whether you are duty-bound towards your client even if you are unpaid.

Let us break it down

1. You need to give prior notice before refusing to act on behalf of a client

Let me explain this to you with an example: A has not been paid by his client and A decides to drop the case and not appear for his client in the future dates, leaving the client in lurch. But that’s not how it works.

If a lawyer plans to withdraw from a case due to non-payment, the lawyer must give notice to the client in advance. The purpose of giving notice is that the client is aware that you won’t be appearing in the matter. So, with that, the client will either pay the fees or find a new lawyer. The purpose is to prevent the client from being stranded without legal representation and to avoid unnecessary litigation.

2. Duty to appear in court even when unpaid

Not being paid means a lawyer can refuse to show up in court if you think that then you have got it all wrong.

Let me tell you that a lawyer’s duty to appear in court is not conditional on being paid. This was held in Basanta Kumar Mitter v. Kusum Kumar Mitter [1900 SCC OnLine Cal 146], where the court held that a lawyer is still duty-bound to represent their client unless formally discharged. This means that, with fees or no fees, a lawyer cannot just walk away from a case they have taken.

The lesson? Non-payment is no excuse; a lawyer has a duty to represent their client, even if the fees are pending.

3. Lawyer cannot refuse to give consent for change of lawyer

At times, clients are just not comfortable with their lawyers. It could either be the fees being too high or, like the client who came to me, not being happy because his lawyer was not keeping up with the case. So, in that case, can the lawyer hold onto the case and refuse to let the client switch? The answer is no. 

Courts have clarified in several cases that a lawyer cannot refuse to allow clients to change lawyers because of unpaid fees. This shows that the client’s interest is of utmost importance. 

We saw a lawyer’s duties now; let us also see the remedies available for a lawyer. Let us discuss that.

What remedies are available to a lawyer if a client does not pay?

It is common when we hear about clients not paying their lawyers fees and lawyers chasing the client to recover what is rightfully theirs. Above, we saw that even if the client has not paid, specific duties are cast upon the lawyers and the lawyers have to abide by those. So, now let us also see the remedies available to a lawyer to recover money. 

1. Remedy available under civil law

The civil remedy that the lawyer can avail of can be to file a summary suit under Order XXXVII of the Code of Civil Procedure, 1908. 

This provision gives power to the person who wants to recover his money for suits based on negotiable instruments or also where the plaintiff seeks to recover debt or a liquidated amount. 

This is a summary procedure and aims to resolve such disputes faster. 

So, in our case, the earlier lawyer can file a summary suit to recover his pending fees. Once the suit is filed and summons are served, the defendant only has 10 days to defend the suit. Unlike regular suits, the Defendant has to seek leave to defend.

If defendant does not file an application for leave to defend or the court rejects his application, then the court shall pass judgment in favour of plaintiff when the plaintiff provides evidence and completes the cross-examination. 

2. Remedies under criminal law

You can also file a police complaint against the client to build pressure on the client for offenses of criminal breach of trust and cheating under sections 316 and 318 of Bharatiya Nyaya Sanhita, 2023, respectively.

To prove cheating, you must show that the client initially had fraudulent intent and never intended to pay. This applies when:

• The client engages the lawyer with a false promise to pay fees but never intended to do so.
• The client induces the lawyer to provide services by making fake assurances (e.g., forged proof of payment or post-dated cheques that were dishnoured).
• The client disappears or refuses to pay immediately after getting a favorable judgment without any valid reason.

However, it will not apply if the client fails to pay due to financial constraints or a fee dispute.

To prove criminal breach of trust, there must be an entrustment of property (money or documents) and subsequent dishonest misappropriation. This applies when:

•  The client gives a post-dated cheque as a fee guarantee but deliberately cancels it.
• The client collects reimbursement from a third party (e.g., company/employer/insurer) meant to pay legal fees but pockets the amount instead.

However, it will not apply if there is no clear entrustment of money or property, and a mere fee dispute does not amount to a criminal breach of trust.

If there is a cheque that has been handed over towards the fees of the lawyer and the same is dishonoured upon presentation, then you can issue a statutory demand notice and if the same is not complied then you can proceed to file a complaint under section 138 of the Negotiable Instruments Act,1881.

This is a special act that deals with non-payment through cheques, promissory notes or bill of exchange, etc.

3. Out of court settlement

If the court proceedings take a lot of time, then the best and most simple way is to settle the matter out of court. 

We have spoken about what the lawyers can do and must do, but what can clients do in such a scenario?

What can the client do if a lawyer withholds documents?

We saw what remedies are available to a lawyer, let us also see what a client can do if the lawyer refuses to return your documents. Here’s what you can do:

Step 1: Talk to your lawyer

Before taking any drastic step, try talking it out with your lawyer. Communication is the key. In most cases, a polite conversation can work wonders. Lawyers, too, like others, are human and if you are genuinely going through some financial trouble, something could be worked out. 

Step 2: Legal notice

If communicating does not work, then the next step is to send a legal notice demanding the return of your documents. This is a formal way to remind the lawyer of their legal obligation to return your papers. 

Step 3: Complaint to the Bar Council

If the lawyer is still being difficult, then it is time to take up the matter to the Bar Council of the respective state. You can file a complaint with the state Bar Council under section 35 of the Advocates Act, 1961, which oversees the conduct of lawyers.

The Bar Council is empowered to investigate complaints and if the lawyer is found guilty of misconduct, then the lawyer can face disciplinary action, including suspension or disbarment. You can refer to the steps here.

You must also be aware of how clients and lawyers avoid such conflicts in the first place.

How can such situations be avoided?

Any idea how such issues can be prevented from happening? 

Here are some tips to prevent this from happening and to ensure that things remain smooth and conflict-free between lawyers and their clients. 

1. Terms of payment and scope of work can be set upfront 

It is advisable that a letter of engagement or the terms be recorded in writing. It shall contain the scope of work, mode of payment and as and when the installments are to be paid. It shall also contain any other terms that would be agreed upon between the parties. This will ensure that any future misunderstandings are avoided. 

2. Keep copies of important documents

Lawyers shall, instead of taking original copies, take photocopies from the client. Lawyers shall refrain from keeping any original document in their custody. This is only to safeguard the document from being misplaced or any damage happening to the document. 

These are some of the pointers to keep in mind in order to ensure there are no issues in the future. 

Conclusion

We read above that even though a client has not paid fees to the lawyer, the lawyer is entitled to perform his duties. This is in complete contrast to other professionals in different fields. We now understand that a lawyer who fails to discharge his duty, even if unpaid, can be liable for professional misconduct, as we saw above. The reason behind it is the nature of the profession of a lawyer.

Law being a noble profession, which a person takes up not simply to earn profit but to ensure that justice is delivered to the public and also that the faith of the public continues to be vested in the judiciary. So, if you are a practicing lawyer, you know what to do if you ever get stuck in such a situation and if you are an intern or a junior, this knowledge will come to your rescue when you start your practice.