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Rejects 's Plea to Revive Cheque Case, Counsel Stated Full Payment
The has firmly refused to allow to revive a cheque dishonour complaint after its own counsel twice informed judicial forums that the dispute had been fully settled and payment received. Justice Saurabh Banerjee dismissed the bank’s writ petition, holding that a litigant cannot from statements voluntarily made by its counsel before a magistrate and the , as doing so would undermine the integrity of judicial proceedings and the advocate-client relationship.
The case originated from a loan of ₹14.50 lakh sanctioned by to the respondents in . The borrowers mortgaged an immovable property as collateral and issued a post-dated cheque in the bank’s favour. After the loan account was classified as a non-performing asset on , the bank issued a notice under demanding clearance of outstanding arrears. The cheque, presented on , was returned unpaid on January 18 with the remark “Refer to Drawer.” Following a legal notice and non-payment, the bank filed a complaint under on .
Background of the Case
During the complaint proceedings, a significant turn of events occurred. On , the bank’s counsel, , appeared before the judicial magistrate and stated that the matter had been settled and that the bank had received full and final payment towards the cheque amount. Relying on this representation, the magistrate referred the case to the . On , the same counsel repeated the statement before the , leading to the complaint being disposed of as under , and the respondents were acquitted.
The Crucial Representation by Counsel
However, nearly thirteen months later, on , the bank filed an application seeking revival of the complaint. It claimed that its then counsel had misunderstood instructions and made the representation without authority. The bank maintained that no settlement had occurred and no payment had been received. The judicial magistrate dismissed the revival application, holding that a criminal court lacks the power to alter or review its earlier order.
Bank's Attempt to
The bank then approached the , arguing that its counsel acted without authority and that the representation was made amid confusion. Justice Banerjee rejected this contention, noting that the same representation had been made twice—first before the magistrate and then before the —with separate statements recorded on both occasions. The court observed that the bank had not initiated any proceedings against the counsel nor sought any clarification from him about what transpired.
The court underscored that the counsel held a duly executed and was “an and not a mere mechanical agent of the petitioner.” It further noted that the bank had raised the issue of lack of authority only after a long gap of thirteen months, and that it had taken contradictory positions: while maintaining no settlement occurred, it also claimed it had merely given the respondents an oral opportunity to pay, which they later reneged upon after the complaint was disposed of.
Legal Principles and Observations
Justice Banerjee held that “the petitioner now by way of the present petition cannot be permitted to come out with a new version to overcome the voluntary/ uncontroverted statements made before two forums, and that too, before the learned JMFC after a long gap of thirteen (13) months and thereafter before this Court after a further gap of more than nine (9) months.” The court emphasised that allowing such a course would create a “chaotic situation” and undermine the advocate-client relationship and the role of counsel in assisting the court in the adjudicatory process.
The judgment reaffirms the principle that a litigant is bound by the statements of its counsel made during judicial proceedings, especially when those statements are made voluntarily and without any contemporaneous challenge. The court also noted that the bank did not take any steps to clarify or correct the record at the time the statements were made, and only sought to disown them after the complaint was disposed of.
Impact on Legal Practice
This ruling has significant implications for financial institutions and other litigants who may be tempted to disavow their counsel’s representations after obtaining a favourable outcome or after a delay. The decision underscores the importance of clear instructions to counsel and the need for immediate corrective action if a mistake is perceived. It also reinforces the sanctity of statements made before courts and Lok Adalats, which are relied upon by opposing parties and the judiciary.
For legal practitioners, the judgment serves as a reminder that a counsel’s authority, once vested through a , carries binding effect. The court’s observation that counsel are officers of the court, not mere agents, elevates the ethical duty of advocates and the trust reposed in them. Banks and other corporate litigants should ensure robust internal communication and verification before any representation is made in court, as a change of stance later will rarely be countenanced.
Conclusion
The dismissed the bank’s writ petition with , leaving the earlier order of compounding intact. The case is a stark illustration of how a litigant’s own counsel’s words can decisively conclude litigation, and how belated attempts to walk back those words will be met with judicial resistance. The judgment is likely to be cited in future cases where parties seek to from concessions made by their advocates, reinforcing the finality of court orders based on such concessions.
