-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. Suit No. 2448 of 2000 Motiwalla and Co. ..Plaintiffs vs. Baldev Shipbreakers Ltd.& Anr. ..Defendants Mr.Janak Dwarkadas, Sr.Advocate with Mr.Rahul Narichania with Ms.Priti Shah i/b M/s K.V.Chheda and Co. for plaintiffs. Mr.D.N.Motiwalla, partner of the plaintiffs’ firm present. None for defendant. CORAM: S.J.KATHAWALLA J. CORAM: S.J.KATHAWALLA J. CORAM: S.J.KATHAWALLA J. 9th February, 2009 9th February, 2009 9th February, 2009 P.C. P.C. P.C. 1. This suit has appeared on board under the caption "for exparte decree" when on behalf of the plaintiffs affidavit of oral evidence dated 9th February, 2009 of Mr.Deepak N.Motiwalla, partner of the plaintiffs’ firm is tendered on record. The same is taken on record and marked "X" for identification. The defendants who were served with the writ of summons as can be seen from the affidavit dated 28th January, 2001 proving service have failed to appear before this Court. -2- 2. The plaintiffs are a partnership firm and carry on profession of Advocates, Solicitors and Notary. The first defendant is a company incorporated under the Companies Act, 1956 and carries on business as shipbreakers at the address mentioned in the cause title. The second defendant is the Director of the first defendant, who, according to the plaintiffs, guaranteed to make due payments of the plaintiffs’ bills due and payable by the first defendants. 3. The plaintiffs have stated that in the first week of March, 1998, the second defendant along with Mr.Dilip Gosalia attended the office of the plaintiffs and briefed the deponent in connection with the Admiralty Suit bearing suit no.24 of 1998 (the said suit) filed by Raiffeisen Zentral Bank Osterreich Akteiengesellschaft against the vessel "m.v."Victory" owned by the defendants. The first and second defendants instructed the plaintiffs to act, appear and plead for the first defendant and other Directors of the first defendant company in the said suit. -3- 4. The plaintiffs have stated that during the course of meeting the second defendant also briefed the plaintiffs with respect to Admiralty suit bearing no.23 of 1998 filed by Raiffeisen Zentral Bank Osterreich Akteiengesellschaft against the vessel m.v."Tiger 2" and its owners Ajay Alloy Cast Pvt.Ltd. The second defendant informed the plaintiffs to act, appear and plead for m.v."Tiger 2" and its owners Ajay Alloy Cast Pvt.Ltd. The second defendant informed the plaintiffs that the second defendant was a former director of Ajay Alloy Cast Pvt.Ltd. and that the said Ajay Alloy Cast Pvt.Ltd. was controlled by his friend. 5. The plaintiffs have stated that during the course of initial instructions the deponent appraise the second defendant that the plaintiffs were willing to act for the defendants on payment of their professional fees, expenses and fees of Senior Counsel and Junior Counsel for appearing in the matter. The second defendant was further informed that as solicitors the plaintiffs would charge on hourly basis for the work done by the firm and that hourly charge would be Rs.1,500/- per hour and -4- in complicated matters the charges varied upto Rs.2,500/- per hour for each partner’s attendance and separately for Advocate Assistant’s attendance. The plaintiffs have stated that after studying the papers they informed the second defendant that that the said suit involved complicated questions of law and facts and stakes involved were large and thus both the partners and Advocate Assistants would be required to handle the matter. The second defendant was further informed that owing to the complicated matter a set of Senior and Junior Counsel will have to be engaged to defend the suit. The second defendant was further informed that the plaintiffs were not in a position to estimate the total fees payable to the plaintiffs as the same would depend upon the number of hours engaged by the deponent, his partner and Advocate assistants as well as number of days the matter would be tried in Court and number of conferences he would have to attend with the defendants and their representatives as well as with the Counsel. The plaintiffs have stated that the defendants agreed to the scale of fees quoted by the plaintiffs and also agreed to pay the fees of -5- the senior and junior counsel. The deponent has stated that the second defendant had stated that the first defendant would pay the fees of the plaintiff and he would personally guarantee to pay the fees of the plaintiffs in the event the same was not settled by the first defendant. 7. The plaintiffs have stated that they informed the second defendant that they would have to pay sufficient advance to cover the Senior and Junior Counsel’s fees as well as to cover out of pocket expenses as well as towards the plaintiffs’ fees, to which the second defendant informed the deponent that they would pay the plaintiffs’ advance as and when called upon by them. The plaintiffs state that on the basis of the said agreement arrived at between the plaintiffs and the defendants the plaintiffs undertook to act as solicitors and Advocates for the defendants. 8. The plaintiffs state that on 10th March, 1998 the defendants executed the vakalatnama in favour of the plaintiffs’ firm in the said suit. The plaintiffs state that the second defendant pleaded with the deponent that they would make -6- payment towards Counsel’s fees as and when fees become payable to the Counsel for conferences and appearances and that the plaintiffs’ fees and other out of pocket expenses would be settled on the conclusion of the suit. The said plea was made by the defendants on the ground that plot bearing no.65 formerly numbered as 24-L wherein the shipbreaking work of the defendants had come to a grinding halt in view of the injunction order of the Bombay High Court made on 8th May, 1998 and that the business had come to stand still and that no sooner the matter was concluded, the plaintiffs’ fees would be settled by the defendants in full within a week from the receipt of the plaintiffs’ bill. The plaintiffs have stated that they agreed to the aforesaid request of the defendants in good faith and only by way of concession on the clear understanding that the plaintiffs’ bill would be settled by the defendants within a week from the date of receipt of the bill. 9. The plaintiffs have stated that the consent terms were filed in Admiralty suit no.24 of 1998 on 9th April, 1999 and the suit concluded on 9th April, 1999. The plaintiffs thus became -7- entitled to their professional charges. The plaintiffs, therefore, raised their bill for the sum of Rs.46,16,794/- on 13th April, 1999. The deponent has stated/submitted that the contents of the bill are correct save and except that the plaintiffs are not pressing the claim for Sheriff’s charges in the sum of Rs.2,12,500/- and that the said original bill of the plaintiffs would be reduced to Rs.44,49,294/- The plaintiffs have stated that in the course of their engagement as Advocates and Solicitors the plaintiffs’ firm was required to draft notice of motion, affidavit in reply, take search of court papers, took inspection with the Advocates for the plaintiffs in the said suit, compare documents given during inspection, take search of the Register of Shipping, give opinions oral as well as in writing from time to time, draft power of attorney, prepare compilation of documents, chronology of dates and events etc. as more particularly set out in paragraph 4 of the affidavit of evidence. Various proceedings in the said suit came up for hearing on 53 days and the matters were heard for more than 10 days. The total counsel fees paid by the plaintiffs firm in the said suit on behalf of -8- the defendants works out to Rs.21,30,300/- Apart from the above the plaintiffs incurred substantial out of pocket expenses to the tune of Rs.93,994/- by way of courier charges, fax charges, taxi charges, xerox, telephone, typing, clerkage and other miscellaneous expenses etc. The plaintiffs fees for professional work came to Rs.35,00,0000/- As against the above, the plaintiffs received an advance of Rs.12,75,000/- The plaintiffs have stated that on conclusion of the said suit the plaintiffs vide their letter dated 13th April, 1999 (wrongly stated as 13.3.1999 Exh.A to the plaint) forwarded their bill to the defendants in the sum of Rs.46,61,794/- after giving credit of Rs.12,75,000/- already received by the plaintiffs. 10. The plaintiffs have stated that by their registered A.D.letter dated 17th July, 1999 addressed to the defendants, the defendants were called upon to remit to the plaintiffs a sum of Rs.46,61,794/- towards the plaintiffs’ fees for conducting the said suit. The said letter was addressed at the office address of the first defendant by the plaintiffs. The copies of the -9- said letter were also sent by the plaintiffs at three addresses of the first and second defendants as set out in paragraph 5 of the affidavit of evidence. 11. The plaintiffs have stated that on or about 21st July, 1999 the plaintiffs received two cheques from the defendants bearing Nos.047971 and 047972 drawn on Bhavnagar Welfare Cooperative Bank Ltd. each for the sum of Rs.2,50,000/- in part payment of the plaintiffs’s bill. The plaintiffs have stated that by their registered letter dated 26th August, 1999 addressed to the defendants the plaintiffs placed on record that they had received Rs.5,00,000/- towards part payment of the plaintiffs’ bill and that sum of Rs.41,61,794/- was still due and payable by the defendants to the plaintiffs. In the said letter the plaintiffs also recorded the discussion that they had with the second defendant and at his instance with his authorised representative Shri Haji Kaderbhai Pirwani. Once again the said letter was addressed at the office address of the first defendant and copies thereof were sent to the -10- address of the first and second defendants as set out in paragraph 7 of the affidavit of evidence. 12. The plaintiffs have stated that the plaintiffs have by their letters dated 23rd September, 1999, 5th October, 1999, 28th October, 1999 and 22nd February, 2000 addressed to the defendants called upon them to settle the dues of the plaintiffs. In the said letter the plaintiffs have also recorded his telephonic conversation with the second defendant and the authorised representative of the second defendant Mr.Peerwani and have further recorded that the assurance given by the defendants and the said Shri Peerwani were never fulfilled. The plaintiffs also recorded that the defendants have betrayed the confidence and trust deposed in them by the plaintiffs. 13. I have gone through the averments made in the plaint and documents annexed to the affidavit of evidence by the plaintiffs. Exh.P-1 shows that a sum of Rs.46,61,794/- (after giving credit of advance received to the tune of Rs.12,75,000/-) is the bill of costs -11- raised by the plaintiffs on defendant no.1. By Exh. P-2 the plaintiffs recorded that the plaintiffs have not received any payment towards the said bill of costs and requested the defendants to forward their cheque for Rs.46,61,794/- at the earliest. The said document also shows that the plaintiffs recorded that they have not taken sufficient advances from the defendants in their matter since no work has been done at the plot owned by defendant no.1. The plaintiffs have recorded that it is their practice to take sufficient advance and conduct the matters. However, in the instant case, having regard to the fact that defendant no.1’s plot was closed the plaintiffs did not insist for sufficient advance. They have further recorded that when the above matter was concluded the defendants promised that the plaintiffs’ bill would be settled within couple of days. From the acknowledgment cards annexed to the said Exh.P-2, it is established that the defendants have received the said letter but have paid only a sum of Rs.5,00,000/- to the plaintiffs on 21st July, 1999. The document at Exh.P-3 shows that the plaintiffs have recorded having received the said sum of Rs.5,00,000/- on -12- 21st July, 1999 and have called upon the defendants to pay the balance of Rs.46,61,794/- It is further recorded that the authorised representative who was to come to Mumbai and was to settle the plaintiffs’ fees on 21st August, 1999 did not turn up. By the said letter it is further established as to how the defendants kept on making assurances to the plaintiffs as regards clearing their outstandings which they ultimately failed to fulfill. This is further established from the documents at Exhs.P-4, P-5 and P-6. From the document at Exh.P-5 it is established that defendant no.2 had given oral guarantee to the plaintiffs that in the event of defendant no.1 being unable to pay the professional fees of the plaintiffs he shall pay the same personally. In fact as pointed out by the learned Counsel appearing for the plaintiffs, the defendants in reply to the contempt petition bearing No.76 of 2001, have admitted thed fact of oral guarantee. The validity of oral guarantee is recognised by the provisions of section 126 of Indian Contract Act, 1872. 14. The defendants have not filed any written -13- statement and, therefore, the entire case putforth by the plaintiffs has gone unchallenged. There is no reason as to why the case put up by the plaintiffs should not be accepted. The plaintiffs have, as stated earlier, not pressed the claim for Sheriff’s charges in the sum of Rs.2,12,500/- The plaintiffs have, therefore, as set out in paragraph 11 of the affidavit of evidence sought an order and decree for a total sum of Rs.41,49,895/- comprising of the principal sum of Rs.39,49,294/- along with interest at the rate of 18% p.a. on the said principal sum from 22nd February, 2000 till 5th June 2000 i.e. from the date of filing of the suit. The plaintiffs have also claimed interest from the date of filing of the suit till payment and/or realisation at the rate of 18% p.a. 15. In view thereof, following order is passed in the suit: "The defendants are jointly and severally ordered and decreed to pay to the plaintiffs a sum of Rs.41,49,895/- with interest at the rate of 18% p.a. -14- on the sum of Rs.39,49,294/- from the date of filing of the suit till payment and/or realisation. The defendants to also pay costs of this suit to the plaintiffs. 16. In view of the above suit stands disposed of. In view of disposal of suit, chamber order stands disposed of. (S.J.KATHAWALLA J.) (S.J.KATHAWALLA J.) (S.J.KATHAWALLA J.)