Himalayan Co-operative Group Housing Society vs Balwan Singh

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 4360-4361 OF 2015 (Arising out of S.L.P.(C) Nos. 9302-9303 of 2013)

HIMALAYAN COOPERATIVE GROUP HOUSING SOCIETY ...APPELLANT

VERSUS BALWAN SINGH ...RESPONDENT WITH CIVIL APPEAL NOS. 4363-4364 OF 2015 (Arising out of S.L.P.(C) Nos.9305-9306 of 2013)

CIVIL APPEAL NOS. 4347-4348 OF 2015 (Arising out of S.L.P.(C) Nos.9308-9309 of 2013)

CIVIL APPEAL NOS. 4365-4366 OF 2015 (Arising out of S.L.P.(C) Nos.9310-9311 of 2013)

CIVIL APPEAL NOS. 4353-4354 OF 2015 (Arising out of S.L.P.(C) Nos.9314-9315 of 2013)

CIVIL APPEAL NOS. 4351-4352 OF 2015 (Arising out of S.L.P.(C) Nos.9316-9317 of 2013)

AND WITH

CIVIL APPEAL NOS. 4355-4356 OF 2015 (Arising out of S.L.P.(C) Nos.9318-9319 of 2013) Signature Not Verified

Digitally signed by Charanjeet Kaur Date: 2015.05.18 13:12:39 IST Reason: 2

O R D E R

1. Leave granted.

2. These appeals are directed against the

judgment and order passed by the High Court in Writ

Petition No.7546 of 2005 and connected matters,

dated 25.11.2010 and in Review Petition No.138 of

2010 and connected matters, dated 12.10.2012. By the

impugned judgment and order in the Writ Petition,

the High Court has affirmed the orders passed by the

Courts/authorities below and, on the basis of a

concession made by the counsel appearing on behalf

of the appellant, issued certain directions to the

appellant.

3. For convenience, we would only notice the

facts in Civil Appeals arising out of S.L.P.(C)

Nos.9302-9303 of 2013.

4. The appellant is a co-operative society

registered under the provisions of the Delhi 3 Cooperative Societies Act, 1972 (for short, “the

Act”). The appellant-Society comprised of 150

members, including the respondents, who had enrolled

themselves with the said Society for allotment of

residential quarters/ apartments. The

appellant-Society raised a demand for payment

towards allotment of residential quarters/

apartments on 28.05.1998. The respondents failed to

comply with the demand. They continued to be

defaulters in spite of continuous demand notices. In

view of the default in payment of initial deposit

amount, the appellant-Society after following the

due procedure had passed a resolution expelling the

respondents from the membership of the Society.

5. The resolution requires confirmation of

the Registrar of Co-Operative Societies (respondent

No.2-herein) under Rule 36 of the Delhi Co-Operative

Societies Rules, 1973 (for short, “the Rules”) and

therefore, was placed before the Registrar for his 4

consideration and approval. The Registrar, after due

verification of the records of the appellant-Society

and in compliance with the procedure as contemplated

under the provisions of the Act and the Rules, by an

order dated 29.01.2004, has approved the resolution

passed by the appellant-Society. However, in the

interest of justice the Registrar has provided a

last opportunity to the respondents to pay their

outstanding dues to the appellant-Society within

four weeks, failing which their expulsion from the

appellant-Society would come into effect. The

respondents not having complied with the aforesaid

order, the said resolution stood confirmed and the

respondents ceased to be members of the appellant-

Society.

6. The aforesaid order of the Registrar was

carried in appeal by the respondents before the

Presiding Officer, Delhi Co-operative Tribunal under

Section 86(4) of the Delhi Co-operative Societies 5

Act, 2003. However, on a later date, the respondents

withdrew the said appeal and preferred Revision

Petition before the Financial Commissioner,

Government of NCT of Delhi under Section 80 of the

Act. The Revisional Authority has carefully

considered the documents on record and the

submissions made by parties to the lis and concluded

that the Registrar has rightly confirmed the

expulsion of members of the Society. The Revisional

Authority, while dismissing the revision petitions,

by its order dated 24.02.2005 has noticed that

despite ample opportunity provided to the

respondents, they have failed to pay the outstanding

amount and therefore, their expulsion is proper and

justified.

7. The respondents, aggrieved by the

aforesaid orders passed by the Registrar and the

Revisional Authority, had approached the Writ Court.

In the Writ Petition filed, their main prayer was to 6

set aside the orders passed by the Registrar and the

revisional authority by exercising supervisory

jurisdiction of the Court.

8. The Writ Court, after duly considering

the contentions raised in the Writ Petition has come

to the conclusion that the Registrar and the

revisional authority have not committed any error in

arriving at their respective conclusions and have

rightly confirmed the resolution expelling the

respondents from the membership of

appellant-Society. The Writ Court has observed that

the respondents have not made out a case for

interference with the orders of the authorities

below. However, on a request made by the respondents

seeking issuance of direction to the

appellant-Society for consideration of their request

to construct and allot the additional quarters/

apartments to them, the same being agreeable to by

the learned counsel appearing for the appellant- 7

Society, the Court has issued certain directions to

the appellant-Society for construction of additional

quarters/ apartments and their allotment to the

respondents, by judgment and order dated 25.11.2010.

9. Being of the firm view, that, the

appellant-Society had not authorized the learned

counsel who had appeared for them before the Writ

Court to make any concession in favour of the

respondents had preferred Review Petitions against

the aforesaid common judgment and order of the Writ

Court. The said Review Petitions were confined to

the limited question of feasibility of

implementation of the directions issued by the Writ

Court in the impugned judgment and order. The High

Court after considering the merits of the Review

Petitions has dismissed the same by its order dated

12.10.2012.

10. Aggrieved by the aforesaid judgment and

order passed by the High Court in the Writ Petitions 8

as well as in the Review Petitions, the

appellant-Society is before us in these appeals.

11. We have heard learned counsel appearing

for the parties to the lis.

12. Shri Jayant Bhushan, learned counsel

appearing for the appellant-Society contends that in

the Writ Petitions filed under Article 226 read with

Article 227 of the Constitution of India, the Writ

Court was not justified in passing the incidental

and ancillary directions in respect of construction

and allotment of the additional flats/apartments to

the respondents. In support of his contention, Shri

Bhushan would rely upon the concurrent finding of

the Registrar, Revisional Authority and the Writ

Court and submit, that, the respondents are indeed

the defaulters and, therefore, they were not

entitled to continue as members of the appellant-

Society. Further, Shri Bhushan would submit that

appellant-Society at no point of time had authorized 9

the learned counsel for the appellant-Society to

make any concession before the Writ Court and such

being the case, the Writ Court ought not have issued

any further direction to the appellant-Society

solely on the basis of a concession made by the

lawyer appearing on its behalf without any express

consent by the appellant-Society.

13. Learned counsel, Shri N. Prabhakar,

appearing for one set of the respondents submits

that the Writ Court had only issued the impugned

directions in light of the concession made by the

learned counsel for the appellant-Society. Shri

Prabhakar would state that the appellant-Society

having made a concession before the Writ Court,

cannot now dispute the authority of the lawyer to

settle and compromise a claim before this Court and

therefore, submits that the Writ Court was justified

in issuing the said directions to the appellant-

Society.

10

14. Shri Huzefa Ahmadi, learned counsel

appearing for some of the respondents contends that

the jurisdiction exercised by the Writ Court was not

under Article 227 of the Constitution but only under

Article 226 of the Constitution of India and

therefore, such directions could be issued and have

been rightly issued by the Writ Court. Shri Ahmadi,

would submit that since, the appellant-Society in

the affidavit filed before this Court has stated

that certain apartments are still lying vacant, the

same may be allotted to the respondents in the

interest of justice. Further, Shri Ahmadi would

support the directions issued by the Writ Court and

submit that the counsel who had appeared for the

appellant-Society had not only given his consent for

the same before the Writ Court but also not disputed

the same in the Review Petition preferred by the

appellant-Society and therefore, the appellant-

Society now cannot resile from the concession made

by its counsel before the Writ Court. 11

15. The issues that would arise for

consideration and decision are:

(a) What is the jurisdiction of the Court while dealing with a petition filed under Articles 226 and 227 of the Constitution of India?

(b) whether the counsel appearing for an appellant-Society could make concession for or on behalf of the appellant-Society without any express instructions/ authorisation in that regard by the Society?

(c) Whether such a concession would bind the appellant-Society and its members?

(d) Since the subject matter of the concession made by the counsel was not the issue before the Writ Court, whether the same would bind the appellant-Society and its members?

16. The first issue need not detain us for

long. It is the stand of the learned counsel for the 12

respondents, that, since the Writ Petition that was

filed was both under Articles 226 and 227 of the

Constitution of India, the Court apart from

examining the merits of the Writ Petition could also

issue incidental and ancillary directions to do

complete justice between parties litigating before

it. We do not agree. The issue in our view is no

more debatable in view of the decision of this Court

in the case of Jaisingh and Ors. vs. Municipal

Corporation of Delhi and Anr. (2010) 9 SCC 385. The

Court has stated:

“15. …we may notice certain well recognised principles governing the exercise of jurisdiction by the High Court under Article 227 of the Constitution of India. Undoubtedly the

High Court, under this article, has the jurisdiction to ensure that all subordinate courts as well as statutory or quasi-judicial tribunals, exercise the powers vested in them, within the bounds of their authority. The High Court has 13

the power and the jurisdiction to ensure that they act in accordance with the well-established principles of law. The High Court is vested with the powers of superintendence and/or judicial revision, even in matters where no revision or appeal lies to the High Court. The jurisdiction under this article is, in some ways, wider than the power and jurisdiction under Article 226 of the Constitution of India. It is, however, well to remember the well-known adage that greater the power, greater the care and caution in exercise thereof. The High Court is, therefore, expected to exercise such wide powers with great care, caution and circumspection. The exercise of jurisdiction must be within the well- recognised constraints…”

(emphasis supplied)

17. The scope and extent of power of the Writ

Court in a petition filed under Article 226 and 227

of the Constitution came up for consideration before 14

three Judge Bench of this Court in the recent case

of Radhey Shyam and Anr v. Chhabi Nath & Ors., Civil

Appeal No.2548 of 2009. This Court observed that the

Writ of Certiorari under Article 226 though directed

against the orders of a inferior court would be

distinct and separate from the challenge to an order

of an inferior court under Article 227 of the

Constitution. The supervisory jurisdiction comes

into play in the latter case and it is only when the

scope and ambit of the remedy sought for does not

fall in purview of the scope of supervisory

jurisdiction under Article 227, the jurisdiction of

the Court under Article 226 could be invoked.

18. In the present case, what was challenged

by the members of the Society was an order passed by

the Registrar and the Revisional Authority under the

provisions of the Act and the Rules framed

thereunder. The prayer was to set aside the orders

passed by the authorities below. Even if the said 15

petitions(s) were styled as a petition under Article

226, the content and the prayers thereunder being

ones requiring exercise of supervisory jurisdiction

only, could be treated as petitions filed under

Article 227 of the Constitution only.

19. Having said so, we will now consider the

issues that falls for our consideration and decision

in the present appeals.

20. In the present case, the subject matter

of the petitions was the orders passed by the

Registrar and the Revisional Authority under the

provisions of the Act and the Rules framed

thereunder. The Registrar and the Revisional

Authority in their order have considered the

validity of the expulsion of the respondents from

the membership of the appellant-Society for having

defaulted in paying the principal amount to the

appellant-Society. The Registrar and the Revisional

Authority have recorded a concurrent finding that 16

despite notice and repeated opportunities to deposit

the required amounts to the appellant-Society, the

respondents have continued to be in default and

hence, the said authorities have confirmed the

resolution passed by the appellant-Society expelling

the respondents from the membership of the

appellant-Society. The Writ Court, in the impugned

judgment and order, has also reached the conclusion

that since the respondents had defaulted in paying

the principal amount to the appellant-Society, the

appellant-Society was justified in expelling them

from the membership of the appellant-Society and

hence, confirmed the orders passed by the

authorities below.

21. The Writ Court after considering the

merits of the case has come to the conclusion that

the expulsion of respondents from the appellant-

Society was justified. Having said so, in our view,

the Court ought not to have issued the impugned 17

directions merely because a request was made by the

learned counsel appearing for the

respondents-herein. The same would hold true even if

a concession was made by the counsel for the

appellant-Society. The Court, while, exercising its

powers under Article 227 of the Constitution of

India, ought to have confined itself to the subject

matter and the issues raised by parties in the Writ

Petition. The digression of or expansion of the

supervisory jurisdiction under Article 227 of the

Constitution of India, would open precarious

floodgates of litigation should the limitation on

the supervisory jurisdiction not be observed

mindfully.

22. If for any reason, the Writ Court

perceived the oral request made by the respondents

to have justified the ends of justice and desired to

accept the concession so made by the counsel for

appellant-Society, the said request not being the 18

subject matter of the Writ Petition required the

Court to query whether the counsel for the

appellant-Society has been authorized to make such a

statement by the appellant-Society or whether any

such resolution has been passed by the

appellant-Society giving concession in matters of

this nature. Since the required caution was not

exercised by the learned Judges of the Writ Court,

the directions issued by the Writ Court suffer from

infirmity and hence require to be set aside.

23. Apart from the above, in our view lawyers

are perceived to be their client’s agents. The law

of agency may not strictly apply to the client –

lawyer’s relationship as lawyers or agents, lawyers

have certain authority and certain duties. Because

lawyers are also fiduciaries, their duties will

sometimes more demanding than those imposed on other

agents. The authority-agency status affords the

lawyers to act for the client on the subject matter 19

of the retainer. One of the most basic principles of

the lawyer-client relationships is that lawyers owe

fiduciary duties to their clients. As part of those

duties, lawyers assume all the traditional duties

that agents owe their principals and, thus, have to

respect the client’s autonomy to make decisions at a

minimum, as to the objectives of the representation.

Thus, according to generally accepted notions of

professional responsibility, lawyers should follow

the client’s instructions rather than substitute

their judgment for that of the client. The law is

now well settled that a lawyer must be specifically

authorised to settle and compromise a claim, that

merely on the basis of his employment he has no

implied or ostensible authority to bind his client

to a compromise/ settlement. To put it

alternatively that a lawyer by virtue of retention,

has the authority to choose the means for achieving

the client’s legal goal, while the client has the

right to decide on what the goal will be. If the 20

decision in question falls within those that clearly

belong to the client, the lawyers conduct in failing

to consult the client or in making the decision for

the client, is more likely to constitute ineffective

assistance of counsel.

24. The Bar Council of India Rules, 1975 (for

short, “the BCI Rules”), in Part VI, Chapter II

provide for the ‘Standards of Professional Conduct

and Etiquette’ to be observed by all the advocates

under the Advocates Act, 1972 (for short, “the Act,

1972”). In the preamble to Chapter II, the BCI Rules

provide as follows:

“An advocate shall, at all times, comport himself in a manner befitting his status as an officer of the Court, a privileged member of the community, and a gentleman, bearing in mind that what may be lawful and moral for a person who is not a member of the Bar, or for a member of the Bar in his non-professional 21

capacity may still be improper for an advocate. Without prejudice to the generality of the foregoing obligation, an advocate shall fearlessly uphold the interests of his client and in his conduct conform to the rules hereinafter mentioned both in letter and in spirit. The rules hereinafter mentioned contain canons of conduct and etiquette adopted as general guides; yet the specific mention thereof shall not be construed as a denial of the existence of others equally imperative though not specifically mentioned.” (emphasis supplied)

25. The Preamble makes it imperative that an

advocate has to conduct himself and his duties in an

extremely responsible manner. They must bear in mind

that what may be appropriate and lawful for a person

who is not a member of the Bar, or for a member of

the Bar in his non-professional capacity, may be

improper for an advocate in his professional

capacity.

22

26. Section II of the said Chapter II

provides for duties of an advocate towards his

client. Rules 15 and 19 of the BCI Rules, has

relevance to the subject matter and therefore, they

are extracted below:

“15. It shall be the duty of an advocate fearlessly to uphold the interests of his client by all fair and honourable means without regard to any unpleasant consequences to himself or any other. He shall defend a person accused of a crime regardless of his personal opinion as to the guilt of the accused, bearing in mind that his loyalty is to the law which requires that no man should be convicted without adequate evidence. *** *** ***

19. An advocate shall not act on the instructions of any person other than his client or his authorised agent.” 23

27. While Rule 15 mandates that the advocate

must uphold the interest of his clients by fair and

honourable means without regard to any unpleasant

consequences to himself or any other. Rule 19

prescribes that an advocate shall only act on the

instructions of his client or his authorized agent.

Further, The BCI Rules in Chapter I of the said

Section II provide that the Senior advocates in the

matter of their practice of the profession of law

mentioned in Section 30 of the Act, 1972 would be

subject to certain restrictions. One of such

restrictions contained in clause (cc) reads as

under:

“(cc) A Senior Advocate shall, however, be free to make concessions or give undertaking in the course of arguments on behalf of his clients on instructions from the junior advocate.”

28. Further, the ‘Code of Ethics’ prescribed

by the Bar Council of India, in recognition of the 24

evolution in professional and ethical standards

within the legal community, provides for certain

rules which contain canons of conduct and etiquette

which ought to serve as general guide to the

practice and profession. Chapter of the said Code

provides for an ‘Advocate’s duty to the Client’.

Rule 26 thereunder mandates that an “advocate shall

not make any compromise or concession without the

proper and specific instructions of his/her client.”

It is pertinent to notice that an advocate under the

Code expressly includes a group of advocates and a

law firm whose partner or associate acts for the

client.

29. Therefore, the BCI Rules make it

necessary that despite the specific legal stream of

practice, seniority at the Bar or designation of an

advocate as a Senior advocate, the ethical duty and

the professional standards in so far as making

concessions before the Court remain the same. It is 25

expected of the lawyers to obtain necessary

instructions from the clients or the authorized

agent before making any concession/ statement before

the Court for and on behalf of the client.

30. While the BCI Rules and the Act, does not

draw any exception to the necessity of an advocate

obtaining instructions before making any concession

on behalf of the client before the Court, this Court

in Periyar & Pareekanni Rubber Ltd. v. State of

Kerala, (1991) 4 SCC 195 has noticed the sui generis

status and the position of responsibility enjoyed by

the Advocate General in regards to the statements

made by him before the Courts. The said observation

is as under:

“19. …Any concession made by the government pleader in the trial court cannot bind the government as it is

obviously, always, unsafe to rely on the wrong or erroneous or wanton concession made by the counsel appearing for the 26

State unless it is in writing on instructions from the responsible officer. Otherwise it would place undue and needless heavy burden on the public exchequer. But the same yardstick cannot be applied when the Advocate General has made a statement across the bar since the Advocate General makes the statement with all responsibility.”

(See: Joginder Singh Wasu v. State Of Punjab, 1994 SCC (1) 184).

31. The Privy Council in the case of

Sourendra Nath Mitra v. Tarubala Dasi, AIR 1930 PC

158 has made the following two observations which

hold relevance to the present discussion:

"Two observations may be added. First, the implied authority of counsel is not an appendage of office, a dignity added by the Courts to the status of barrister or advocate at law. It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate. Secondly, the 27

implied authority can always be countermanded by the express directions of the client. No advocate has actual authority to settle a case against the express instructions of his client. If he considers such express instructions contrary to the interests of his client, his remedy is to return his brief."

(See: Jamilabai Abdul Kadar v. Shankarlal Gulabchand, (1975) 2 SCC 609, Svenska Handelsbanken vs Indian Charge Chrome Ltd, 1994 SCC (2) 155)

32. Therefore, it is the solemn duty of an

advocate not to transgress the authority conferred

him by the client. It is always better to seek

appropriate instructions from the client or his

authorized agent before making any concession which

may, directly or remotely, affect the rightful legal

right of the client. The advocate represents the

client before the Court and conducts proceedings on

behalf of the client. He is the only link between

the Court and the client. Therefore his 28

responsibility is onerous. He is expected to follow

the instructions of his client rather than

substitute his judgment.

33. Generally, admissions of fact made by a

counsel is binding upon their principals as long as

they are unequivocal; where, however, doubt exists

as to a purported admission, the Court should be

wary to accept such admissions until and unless the

counsel or the advocate is authorised by his

principal to make such admissions. Furthermore, a

client is not bound by a statement or admission

which he or his lawyer was not authorised to make.

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. We hasten to add neither the client nor 29

the Court is bound by the lawyer’s statements or

admissions as to matters of law or legal

conclusions. Thus, according to generally accepted

notions of professional responsibility, lawyers

should follow the client’s instructions rather than

substitute their judgment for that of the client.

We may add that in some cases, lawyers can make

decisions without consulting client. While in

others, the decision is reserved for the client. It

is often said that the lawyer can make decisions as

to tactics without consulting the client, while the

client has a right to make decisions that can affect

his rights. We do not intend to prolong this

discussion. We may conclude by noticing a famous

statement of Lord Brougham:

“an advocate, in the discharge of his duty knows but one person in the world and that person is his client.” 30

34. In view of the above, while allowing

these appeals, we set aside the directions issued by

the Writ Court to the appellant-Society as also the

judgment and order passed by the High Court in

Review Petition.

Ordered accordingly.

............CJI.

[H.L. DATTU]

..............J. [S.A. BOBDE]

..............J. [ARUN MISHRA]

NEW DELHI, APRIL 29, 2015.

ITEM NO.17 COURT NO.1 SECTION XIV

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petitions for Special Leave to Appeal (C) Nos. 9302-9303/2013

(Arising out of impugned final judgment and order dated 12/10/2012 in RP No. 188/2011,12/10/2012 in WPC No. 7546/2005, & order dated 25/11/2010 in WPC No. 7546/2005 passed by the High Court Of Delhi At New Delhi)

HIMALAYAN CO-OPERATIVE GROUP HOUSING SOC Petitioner(s)

VERSUS

BALWAN SINGH & ORS. Respondent(s) (With appln. (s) for permission and permission to file additional documents and permission to file affidavit of correct facts and interim relief and office report)

WITH SLP(C) No. 9305-9306/2013 (With Office Report)

SLP(C) No. 9308-9309/2013 (With Office Report)

SLP(C) No. 9310-9311/2013 (With Office Report)

SLP(C) No. 9314-9315/2013 (With Office Report)

SLP(C) No. 9316-9317/2013 (With Office Report)

SLP(C) No. 9318-9319/2013 (With Office Report)

Date : 29/04/2015 These petitions were called on for hearing today.

CORAM :

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE S.A. BOBDE HON'BLE MR. JUSTICE ARUN MISHRA

For Petitioner(s) Mr. Jayant Bhushan, Sr. Adv.

Mr. Ravikesh Sinha, Adv.

Mr. Abhijat P. Medh,Adv.

2 For Respondent(s) Mr. N. Prabhakar, Adv.

Mr. Gopal Jha, Adv.

Mr. Kaushik Poddar,Adv.

Mr. Huzefa Ahmadi, Sr. Adv. Ms. Ranjeeta Rohtagi,Adv. Ms. Pragya Baghel, Adv.

Mr. Jaya Khanna, Adv.

UPON hearing the counsel the Court made the following O R D E R

Leave granted.

The appeals are allowed in terms of the signed order.

[ Charanjeet Kaur ] [ Vinod Kulvi ] A.R.-cum-P.S. Asstt. Registrar

[ Signed reportable order is placed on the file ]