ADVOCATE-CLIENT ACCOUNTABILITY, WHETHER A LITIGANT CAN RESILE FROM ORDERS PASSED ON THE STRENGTH OF ITS OWN COUNSEL’S SUBMISSIONS BEFORE A LOK ADALAT
INTRODUCTION
The Hon’ble High Court of Delhi clarified the legal boundaries of the advocate-client relationship, specifically addressing whether a litigant can back out of a court settlement by blaming their own lawyer. Hon’ble Mr. Justice Saurabh Banerjee delivered a significant verdict in Equitas Small Finance Bank Ltd. v. Mrs Nirmala Bai Shanthilal & Ors. (W.P.(CRL) 2380/2026) on September 24, 2026. The Court firmly established that a litigant cannot resile from orders passed on the strength of their own counsel’s submissions before a Lok Adalat, as doing so undermines the sanctity of the judicial process and the legal profession.
BRIEF FACTS
The dispute originated when the Respondents availed a loan of Rs. 14,50,000 from Equitas Small Finance Bank Ltd. After the borrowers defaulted on their payments, their account was declared a Non-Performing Asset. A post-dated cheque provided by the borrowers to clear their dues was presented for encashment by the Bank, but it was dishonored with the remark “Refer to Drawer.” Consequently, the Bank filed a Complaint under Sections 138 and 142 of the Negotiable Instruments Act.
During the pendency of the case, the Bank’s Counsel stated before the Magistrate on August 8, 2024, that the matter had been fully settled and the entire cheque amount was received. Based on this statement, the case was referred to a National Lok Adalat. On September 14, 2024, before the Lok Adalat, the counsel reiterated that the dispute was resolved to the Bank’s satisfaction, leading the forum to dispose of the case as compounded and acquit the borrowers.
Thirteen months later, the Bank filed an Application to revive the Complaint. They claimed their Counsel completely misunderstood the instructions, no settlement had actually occurred and no money was ever received. The Magistrate dismissed this request, prompting the Bank to approach the High Court.
ISSUES OF LAW
The High Court focused its evaluation on fundamental legal questions regarding court procedures and the authority of legal representatives:
- Whether a litigant can challenge a Lok Adalat award and revive a compounded case by claiming their own counsel made settlement statements without authority or instruction?
- Whether an inordinate delay in raising a grievance against a counsel’s submission, coupled with continued representation by the same counsel, renders the litigant’s plea unsustainable?
ANALYSIS OF THE JUDGMENT
The High Court took a strong stance against litigants attempting to undo judicial Orders through belated allegations against their legal representatives, laying down the following key observations:
- Binding Nature of Counsel’s Submissions:The Court emphasized that an Advocate is an officer of the Court, not merely a mechanical agent of the client. Statements made by a nominated Counsel holding a valid Vakalatnama are binding. Since the Counsel voluntarily stated before two separate forums (the Magistrate and the Lok Adalat) that the matter was settled, the Bank could not suddenly wriggle out of those recorded statements.
- Unexplained Delay and Inaction:The Court noted a glaring inconsistency in the Bank’s behavior. The Bank waited a full thirteen months to allege that its Lawyer acted without authority. Crucially, despite blaming the Counsel for a massive error, the Bank continued to be represented by the exact same Lawyer and initiated no disciplinary proceedings against him. The Court found this stoic silence highly suspicious and fatal to their claim.
- Sanctity of the Adjudicatory Process:Permitting a litigant to casually resile from Court Orders based on an alleged “misunderstanding” between them and their Lawyer would create a chaotic situation. The Court firmly noted that litigants cannot be allowed to have a “second bite at the cherry” or change their narrative whenever convenient.
- Protection of Advocate-Client Relationship:The Court held that allowing a party to nullify a settlement merely by pleading a “lack of instructions” strikes at the very foundation of the advocate-client relationship and undermines the critical role lawyers play in assisting the judicial process.
ANIKET KUMAR PARCHA
Legal Associate
The Indian Lawyer & Allied Services
EDITOR’S COMMENT
CONCLUSION
Finding that the Bank’s attempt to disown its Counsel’s statements was a mere afterthought, the High Court dismissed the Writ Petition in threshold without imposing costs. The Judgment serves as a strong reminder that litigants are bound by the submissions made by their authorized legal representatives in open court, especially when such statements lead to a final Lok Adalat award. Parties cannot use alleged miscommunications with their Lawyers as a backdoor to reopen closed disputes. We therefore as a Firm only act upon written instructions as clients have a habit of blaming the lawyer if the matter does not go in their favour.
SUSHILA RAM VARMA
Advocate & Chief Consultant
The Indian Lawyer & Allied Services
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