The Hindu Business Line : It's lawyers vs lawyers...

Long, long ago, professional education happened at the feet of the senior. How is it now? "An environment of more cutthroat competition where everyone is looking to their self-interest," rued Justice Sanjay Kishan Kaul of the Delhi High Court in an important decision delivered on May 8.

His lament was about legal practice. For, sadly, the dispute in Diljeet Titus vs Alfred A. Adebare and Ors, was between advocates. Sadder still, it was `a saga of broken relationships which was started with all good intentions'.

According to Titus (the plaintiff), the defendants (comprising four advocates, viz. Seema Ahluwalia Jhingan, Alishan Naqvee, Dimpy Mohanty and Alfred A. Adebare) were working for him. They were paid remuneration in the form of fee while he remained in control of the professional business of the organisation. According to the defendants, though, they were working more in the nature of partnership with Titus.

When the four decided to break from Titus, the parting was not `very amicable'. Titus said that the defendants, who were associates in his law firm, Titus and Company, left and at that stage took away privileged information of the law firm the use of which other than by Titus, could make him liable to his clients.

"There is grievance of infringement of copyright and apart from the injunction suit filed in this Court even criminal complaints were filed. The data continues to be in possession of the defendants and it is in view thereof that interim reliefs have been claimed," notes the text of the judgment.

`We created the data'

The claim of the four defendants was that they were the owners of the copyright in what they had created. "It is their contention that the creation was independent and the same was so created by advising and counselling the clients and the computer-generated data was lying in the computer system of the plaintiff," records the text.

Through a counter suit, the four advocates sought a decree of declaration that they were the owners of the copyrights in what they had created. They also sought a permanent injunction against Titus and his firm from using and parting with the same. "The question thus arises as to whether there is exclusive right of any of the parties in what they have created or is it a joint right," said Justice Kaul.

Arun Jaitley, appearing for Titus, emphasised that the essence of copyright was `Thou shalt not steal'. He said that there was an implicit term of confidentiality in the relationship between advocates; and that the defendants had breached this implicit term.

Stolen info!

What was the information that the defendants had taken away? Two things: List of clients and law firms, and opinions and advice in respect of which Titus had an obligation to maintain confidentiality. "The information included due diligence carried out for companies to come into India and advice as to how to structure their investments, etc."

Titus wasn't unhappy that his ex-employees set up a new law firm. His grievance was about the copyright infringement. "Just a couple of days before leaving the plaintiff, the defendant No 1 (Adebare) is stated to have visited the office of the plaintiff after office hours and requested the security guard to allow him to enter the office on the pretext of downloading some information from the computer for a project handled by him."

It seems Adebare brought a CD-writer with him and connected the same to the computer in Titus' office, which in turn was on a LAN (local area network) linked to a server holding 7.2 GB of data. "Thus, all the confidential information was copied using the CD-writer." This was apart from `hard copy precedents comprising over 10 proprietary drafts' stolen from Titus!

CDs, e-mails and visiting cards

It was also alleged that Adebare had e-mailed the data using Internet access installed on Titus' computer. The recipients were the other three defendants. "Defendant No. 1 is stated to have taken away with him licensed CDs of all foreign judgements, precedents, conveyances and forms that were actually licensed in the name of the plaintiff and further is alleged to have stolen over 3,000 visiting cards belonging to the plaintiff's law firms given by different clients and contact persons."

On criminal complaints filed by Titus, police had raided the residence-cum-office of Adebare in September 2004 and found four computers. "The hard disk of all the four computers was, thus, taken by the Delhi Police and after making two copies of the same, one copy was given back to the defendants and the other copy was taken by the police for investigation purposes." The defendants admitted in their possession all the documents of the plaintiff's law firm, but their contention was that they had prepared the same.

Jaitley could not seriously dispute the proposition that there would be some amount of information, which could be retained in the memory of an advocate parting ways, which may be utilised. That was a natural corollary of separation, he reasoned. However, this would not include deliberate copying and transmission of the data for the own use of the defendants, he added.

Employees or partners

According to the plaint of Titus, all the defendants were his full time employees; billing to clients was in his name; the defendants were paid performance-linked remuneration; they had to maintain daily time sheets and adhere to the discipline of Titus' law firm; there was no separate clientele of the defendants; nor did they independently represent any client of Titus.

A snatch from the text of the judgment informs: "The plaintiff (that is, Titus) claims that under his guidance, direction, supervision and control defendants and other associates using the plaintiff's knowledge, skill, experience, resources and investment, developed and created various extremely confidential, crucial and vital electronic records, documents, data and information utilising the computer system at the office of the plaintiff. Such record is stated to comprise various proprietary drafts of precedents, agreements, forms, presentation, petitions, confidential documents, legal opinions, legal action plans, computerised database containing client information, proprietary client list, proprietary potential client list and other related information."

On their part, the defendants submitted that they and Titus `stood at par with each other in the firm' and that Titus did not enjoy a better status inter se. They said that Titus alone was not rendering the legal services. "The arrangement is stated to be a camouflage as right from the inception, the firm consisted of a group of lawyers, consultants, professionals, who were only for the sake of convenience christened as Titus and Company, which is alleged to be a mere nomenclature to identify the group."

The arrangement was one of fee sharing, they said. It seems they were paid "their share of the professional fee after deducting 20 per cent of the gross professional fee paid by all the clients which went towards a separate common pool for the purpose of meeting client development and other related expenses of the group and for payment of referral fee (on a reducing percentage basis) to any person within or outside the firm responsible for introducing a new client to it." While Titus concerned himself with organisational and accounts-related functions, the legal work was discharged by the defendants, they averred.

The defendants also claimed that they had independently exercised their professional skills and knowledge and were at sole discretion to advice and serve clients without any supervision including that of Titus. "There was no daily supervision. There were no minimum pre-determined hours provided for professional services. In fact, the plaintiff's interaction on a daily basis with the clients was stated to be minimal and insignificant. The time sheets were stated to be maintained for billing purposes. There was no fixed salary or remuneration."

Many an Act

"An advocate shall not, directly or indirectly commit, a breach of the obligations imposed by Section 126 of the Evidence Act," state the Rules framed by the Bar Council of India. Section 126 is on `professional communications'. It stipulates that no barrister, attorney, pleader or vakil shall at any time be permitted, unless with his client's express consent, to disclose any communication made to him in the course and for the purpose of his employment as such barrister, pleader, attorney or vakil.

For the law-avid, there are references in the text also to: Advocates Act, Code of Civil Procedure, Criminal Procedure Code, Indian Penal Code, Information Technology Act, Copyright Act, Partnership Act, Income Tax Act, Consumer Protection Act and so on. Don't miss the many precedents that the verdict discusses.

The judgment

Fast forward to paragraph 85 of the judgment. "The relationship between advocates associated together has become more complex in view of the change in the traditional nature of work. It has thus become necessary to define the rights and obligations of such persons and the occasion for the same has arisen in the present case," said Justice Kaul.

"The defendants left for what they have perceived to be a betterment of their prospects but the unfortunate part is that to advance the same they decided to copy the material developed during the course of their work with the plaintiff for the benefit of the clients of the plaintiff and spirited the same away. This they could not have done," he said.

The judge cited John W. Gardner thus: "All laws are an attempt to domesticate the natural ferocity of the species. We can't stop murder, but we can make it tougher to get away with it. We can't stop a banker from stealing the widow's money, but we can make it harder for him to steal it."

Elsewhere, the text refers to Aristotle: "It makes no difference whether a good man defrauds a bad one, nor whether a man who commits an adultery be a good or a bad man; the law looks only to the difference created by the injury."

The relationship between Titus and the defendants was one of `contract of service', and not `for', said Justice Kaul. One of the points that weighed in favour of Titus was the nature of payments made to the defendants: Titus had been making payments to them after deducting TDS/advance tax on the same.

In the end, the judge found that the balance of convenience lay in favour of Titus and against the defendants.

"The defendants having worked with the plaintiff cannot utilise the agreements, due diligence reports, list of clients and all such material which has come to their knowledge or has been developed during their relationship with the plaintiff and which is per se confidential," he ruled.

A decision of great import.

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