Advocate Entitled To Adjust Unpaid Professional Fees From Compensation Recovered For Client If Such Adjustment Was Agreed: Delhi High Court

The Delhi High Court has held that where a client and advocate had agreed that professional fees would be adjusted from the compensation amount recovered in litigation, the advocate would be entitled to such adjustment if the client failed to prove payment of the agreed fees.

Justice Neena Bansal Krishna upheld a decree allowing an advocate's counterclaim for recovery of ₹36,000 towards professional fees, while dismissing a second appeal filed by the client.

“From the evidence, it emerges that the Plaintiff was liable to pay the fee to the Counsel, which never got paid by him. It was agreed between them that the fee would be adjusted from the compensation, as and when received by him,” the bench observed.

The dispute arose from compensation proceedings pursued by the client against his former employer.

During contempt proceedings initiated for non-compliance with an earlier court order, the employer paid ₹80,000 towards settlement of the client's dues.

Out of this amount, ₹20,000 was paid through a demand draft and ₹60,000 in cash, which was received by the advocate on behalf of the client.

Subsequently, the client filed a recovery suit alleging that the advocate had failed to hand over the cash component of ₹60,000.

The advocate filed a counterclaim seeking recovery of ₹36,000 as professional fees agreed for appearing in the writ and contempt proceedings.

The trial court decreed the client's suit for recovery of ₹60,000 but rejected the advocate's counterclaim. However, the first appellate court allowed the counterclaim and directed adjustment of ₹36,000 from the decretal amount payable to the client.

The High Court observed that the evidence on record established that the parties had agreed that the advocate's fee would be adjusted from the compensation amount received by the client.

It noted that although the advocate's conduct in retaining the entire amount received on behalf of the client was unfair, the client had not produced any evidence to show that the agreed professional fee had ever been paid.

As such, the Court dismissed the client's appeal.

Appearance: Mr. B. Anand, Advocate for Appellant; Respondent in person.

Case Title: Prem Singh v. C.S. Rathore

Case no.: RSA 91/2025

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