Facts

Appellant was a co-operative society registered under the Delhi Cooperative Societies Act, 1972. It comprised of 150 members who had enrolled themselves with the society for allotment of residential quarters/apartments. Despite repeated demand notices, the Respondents failed to make the necessary payments and were expelled from the society following a resolution that was approved by the Registrar. The appeal before the Revisional Authority failed and the matter reached the High Court. The High Court also noted that the actions of the society were  legal. However, the Respondents sought the issuance of directions  to the Appellant for consideration of their request to construct and allot additional residential quarters/apartments. Noting the acceptance of this request by the Appellant’s counsel, the High Court passed the necessary directions in its judgement. A review was preferred by the Appellants stating that they had not authorised their counsel to make any concessions in favour of the Respondent, which was dismissed. Hence the appeal before the Supreme Court.

Issues

Inter alia the following issues were considered:

• Whether the counsel appearing for an Appellant could make concession(s) for or on behalf of the Appellant without any express instructions/ authorisation in that regard?
• Whether such a concession would bind the Appellant?
• Since the subject matter of the concession made by the counsel was not the issue before the High Court, whether the same would bind the Appellant?

View

The Court was of the view that the High Court should not have issued the impugned directions merely because a request was made by the Respondents, notwithstanding a concession made by the Appellant’s counsel. Since the request made was not the subject matter of the petition, the High Court should have

| Allied Laws – 20. Advocates Act, 1961 |

enquired into whether the Appellant had authorised its counsel in this regard   and whether a resolution was passed allowing for such concessions. The client     is not bound by a statement or admission which he or his lawyer was not authorised to make. The lawyer generally has no implied or apparent authority      to make an admission or statement which would directly surrender or conclude   the substantial legal rights of the client unless such an admission or statement       is clearly a proper step in accomplishing the purpose for which the lawyer was employed. A lawyer has to be specifically authorised to enter in to a settlement     or compromise. He has no implied authority to bind his client to such a compromise/settlement. It is always better to seek appropriate instructions from  theclient.

Held

The impugned directions were set aside as the counsel for the Appellants was  held to not have the requisite authority to enter into a settlement/compromise.    (CA Nos 4363-4364 of 2015 Arising out of SLP (Nos. 9305-9306 of 2013 & Ors       dt. 4-9-2015)

Editorial : Ratio is relevant in determining the scope of authority delegated to       an advocate by the client in reaching a compromise/settlement on his/her behalf. Ratio also highlights the code of professional conduct to be followed by advocates in making such concessions.

“Anger is the enemy of Ahimsa and pride is a monster that swallows it up.”

– Mahatma Gandhi