A, an advocate, received money on behalf of a client, C. A did not intimate C of the receipt of money, but noted in his accounts that he had received money on behalf of C and set aside the amount as his fees in full. On discovering that A had received the money, C demanded the money. A assumes that once the proceedings is over, C would have had to pay A fees anyway, and that he has already recorded in his accounts that his fees have been paid in full. In light of these facts, which of the following statements is the most accurate application of the principle below?

All India Bar Examination (AIBE) 3-III Previous Year Question Papers with Answers

Practice Mode:

68.

A, an advocate, received money on behalf of a client, C. A did not intimate C of the receipt of money, but noted in his accounts that he had received money on behalf of C and set aside the amount as his fees in full. On discovering that A had received the money, C demanded the money. A assumes that once the proceedings is over, C would have had to pay A fees anyway, and that he has already recorded in his accounts that his fees have been paid in full. In light of these facts, which of the following statements is the most accurate application of the principle below?

Principle :

where moneys are received from or on account of a client, the entries in the accounts should contain a reference as to whether the amounts have been received for fees During the or course expenses. of the proceeding, advocate no may, except with the consent in writing of the client concerned, be at liberty to divert any portion of the expenses towards fees.

A: A has clearly fulfilled his duty by recording in the register that he has received C's money as fees.

B: A had fulfilled his duty by recording in the register that he has received C's money as fees, but should have handed over the money to C on his demand.

C: A erred in setting aside C's money for fees without written permission.

D: is entitled to his fees, and was within his rights to se aside the money as fees, as he noted in his accounts that his fees had been paid in full.

E: The money was received on behalf of C and was not from C, and A was therefore entitled to set the money aside as fees.

The answer is: C

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Explanation

The most accurate application of the principle in this scenario is option C:

C: A erred in setting aside C's money for fees without written permission.

Explanation:
The principle states that when an advocate receives money from or on behalf of a client, the entries in the accounts should indicate whether the amounts have been received for fees or for expenses. Furthermore, it explicitly mentions that an advocate may not divert any portion of the expenses towards fees without the client's written consent.

In the given scenario, A received money on behalf of the client C but did not obtain written permission to set aside the money as fees. While A noted in his accounts that he had received the money as fees, he made an error by doing so without C's consent. A should have properly accounted for the money as either expenses or fees based on the client's instructions or with their written consent.

Option C correctly identifies this error and reflects the violation of the principle. A should have acted in accordance with the principle and obtained the necessary written permission from C before setting aside the money as fees.