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Commitment by lawyer without express consent of client will not bind the client : SC

Supreme Court held in Himalayan Cooperative Group Housing Society Vs Balwan Singh that the lawyers owe fiduciary duties to their clients, so they should act with the express consent of clients. Lawyers should not make any commitment without the consent of their clients and any commitment

Brief of the case:

Supreme Court held in Himalayan Cooperative Group Housing Society Vs Balwan Singh that the lawyers owe fiduciary duties to their clients, so they should act with the express consent of clients. Lawyers should not make any commitment without the consent of their clients and any commitment made by the lawyers without the consent of client would not bind the client to a settlement. Lawyers should follow the instructions of clients and argue on the matter on which consent had been taken.

Facts of the case:

The respondent was enrolled with the appellant society for the allotment of the residential apartments and the respondent was unable to pay the amount for the allotment of apartments which appellant society reminded him lots of time but still he had not paid the due amount so the appellant society removed the name of the respondent from the list of members of society. Aggrieved by which the respondent appealed with the presiding officer, Delhi cooperative tribunal and during the proceedings the counsel of the appellant-society agreed to the settlement that the appellant-society would construct the apartments and allot to the respondent which was not agreeable to the society so it appealed with Supreme Court.

Contention of the Appellant:

Appellant was of the view that as the client had not asked its lawyer to make the settlement on its behalf for the construction of the apartments, so as the lawyer had made the commitment before the court regarding the fact that the appellant society would construct the apartments and handover to the members of the society for which the society has never given the consent.

So the commitment made by the lawyer was without the express consent of the client so it was void and not binding on the client. The lawyer had no right for concession. He should not have given any direction of concession without the express consent of the appellant – society.

Contention of the Respondent:

Respondent was of the view that as the Ld. Counsel had agreed with the concession with the respondent for the construction of apartments by the appellant-society and handover the same to the respondent so now he could not resile from that concession afterwards. Moreover he had not disputed the same in review petition. Now appellate society was bounded to construct the apartments and handover the same to respondent.

Held by Supreme Court:

Supreme Court held that Lawyers owe fiduciary duty to the clients. They just act on behalf of the clients. They were not supposed to act on their discretion. They just had to act with the express consent of the clients. Lawyers were only the link between the client and the court so they were authorized to act upon the only matters on which they are given consent. They were supposed to follow the instructions of the clients rather than substitute their judgment.

Further where doubt arises regarding the admission if the facts by the lawyer then the court should wary to accept such admissions until or unless lawyer was authorized by the client to make such admissions. So appellant-society was not bound to act with the commitment made by the counsel of the appellant-society.

Categories: Corporate Law
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