Counsel appearing for a party is fully competent to put his signature to the terms of any compromise upon which a decree can be passed in proper compliance with the provisions of Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC) and such decree is perfectly valid.
The consent decree as passed by the Court on the basis of settlement endorsed by Government Pleader on behalf of the government was the subject matter of challenge. It was contended that in the absence of any authority by government to the pleader any endorsement given to compromise is not binding. The basic rationale of argument was that a lawyer cannot enter into any settlement when there is no authority to this effect in his favour.
The Court held otherwise. It was observed that the Counsel appearing for a party is fully competent to put his signature to the terms of any compromise upon which a decree can be passed in proper compliance with the provisions of Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC) and such decree is perfectly valid. The authority of a Counsel to act on behalf of a party is expressly given in Order III Rule 1 of CPC.
In the present matter, arbitral awards were passed and the same were challenged under Section 34 of the Arbitration and Conciliation Act. When these proceedings were pending, a proposal was floated to negotiate to amicably settle the matters. The government pleader appearing on behalf of the government endorsed the proposal arising from negotiation workable and consented to same. The consent decree as was passed was never challenged before the original court and the said government pleader infact still continued to appear on behalf of government.
The Court accordingly held that the consent decree as passed operated as an estoppel and was binding on the parties and plea that its lawyer was not authorised to enter into such a settlement was held to be an afterthought.
The Court affirmed the view that the counsel who was duly authorised by a party to appear by executing the vakalatnama and in terms of Order III Rule 4 of CPC, empowers the counsel to continue on record until the proceedings in the suit are duly terminated. The counsel making a statement on instructions of client is well within his competence and if really the counsel has not acted in the interest of the party or against the instructions of the party, the necessary remedy is elsewhere.
[Y. Sleebachen vs. Supertintending Engineer & Anr.]