Tribunal permits legal reps' discharge in Company Petition due to fee dispute, stresses Advocates' fee rights

The Tribunal allowed the discharge of the previous legal representatives in the main Company Petition due to a fee dispute, emphasizing the need to protect Advocates' legitimate rights for fees. The order required settling outstanding fees before providing a NoC, warning of potential legal action if fees were not resolved promptly. The Tribunal directed the Applicant to resolve the fee matter amicably and scheduled the main CP for a future hearing.

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Issues:
Change of legal representation in the main Company Petition CP (IB) No. 2259/2019.

Analysis:
The Miscellaneous Application (MA) sought a change of legal representation in the main Company Petition due to a dispute over fees between the Applicant/Corporate Debtor and the previous legal representatives, M/s. Taurus Legal, Advocates. The Applicant wished to switch legal representation before the Tribunal. The Tribunal ordered private notice to the previous representatives and scheduled a hearing. The dispute arose as the Applicant had engaged the services of another Advocate, Ms. Neha Gupta, leading to non-payment of fees to her as per the Memo of Fees forwarded. The previous representatives stated they had not exercised any lien over the papers and were willing to provide NoC upon payment of the outstanding balance.

The previous representatives cited a Bombay High Court judgment emphasizing the obligation of a client to settle fees before changing representation. They highlighted the moral obligation of a Solicitor to receive just fees for services rendered. The Tribunal noted the claim against the Corporate Debtor by the Operational Creditor in the main Company Petition. The Applicant's contention that the fee issue was not fully settled was deemed untenable. The Tribunal observed the timeline of events regarding fee discussions and exchanges between the parties.

Considering the Advocates' willingness to provide NoC upon payment of the outstanding fee, the Tribunal decided to allow the discharge of the Advocates on record, subject to settling the fees. The Tribunal emphasized the need to protect the legitimate rights of the Advocates for their fees. The order directed the Advocates to give discharge within two days and instructed the Applicant to resolve the fee issue amicably. Failure to resolve the fee matter could lead to the Advocates initiating legal proceedings to recover their legitimate fees. The Tribunal disposed of the MA accordingly and scheduled the main CP for a hearing on a future date.

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