Counsel has the implied authority to settle a client's litigation on such terms as he thinks proper, unless the client has limited or restricted that authority.

Headnote:
COMPROMISE - AUTHORITY OF COUNSEL - IMPLIED AUTHORITY - LIMITATION OR RESTRICTION - WITHDRAWAL OF AUTHORITY - EFFECT - ENFORCEABILITY OF SETTLEMENT - COURT'S DISCRETION.
Fact of the Case:

The plaintiffs filed a suit to eject the defendant, who they alleged was a licensee. During the hearing, counsel for both parties agreed to a compromise, which was to be placed at the bottom of the list for a consent decree. However, when the suit was called out for the taking of a consent decree, a new counsel appeared on behalf of the defendant and informed the Court that the defendant was not agreeable to the consent terms. The plaintiffs then took out a notice of motion for recording the compromise, which was dismissed by the trial judge.
Finding of the Court:

The court held that the compromise was binding on the defendant because counsel for the defendant had the implied authority to settle the suit on behalf of his client. The court found that the defendant had not limited or restricted counsel's authority until after the compromise had been reached, and that the defendant's subsequent withdrawal of authority could not enable her to resile from the agreement.
Issues: 1. Whether counsel had the implied authority to settle the suit on behalf of his client. 2. Whether the defendant had limited or restricted counsel's authority before the compromise was reached. 3. Whether the defendant's subsequent withdrawal of authority could enable her to resile from the agreement.
Ratio Decidendi: 1. Counsel has the implied authority to settle a client's litigation on such terms as he thinks proper, unless the client has limited or restricted that authority. 2. A client's withdrawal of authority after a compromise has been reached cannot enable the client to resile from the agreement.
Final Decision: The appeal was allowed, the order passed by the trial judge was set aside, and a decree was entered in consent terms.

Judgment

1. This appeal raises a rather important question as to the authority of counsel to enter into a compromise on behalf of his client. The plaintiffs filed a suit, in which the compromise is alleged to have been arrived at, to eject the defendant who they alleged was a licensee.

The suit appeared as a short cause before Coyajee, J. This was on 22-6-1954. Before the suit reached hearing terms of settlement, were discussed between the defendant her husband and the solicitors on the two sides, and it was agreed that the suit should be placed at the bottom of the list so that the consent terms may be handed in.

At 4 p. m. the suit reached hearing and counsel for the plaintiffs, Mr. Laud, and counsel for the defendant. Mr. Bhat, applied to the Court that the suit should be placed at the bottom of the list as negotiations were going on. The learned Judge was not prepared to place the suit at the bottom of the list and asked the parties to discuss the matter in Court.

Thereupon the plaintiffs and the defendant and her husband the attorneys discussed the matter further in the corridor of the Court the solicitors of the plaintiffs informed Mr. Laud as to what the consent terms were which had been arrived at, and the consent terms were that time was to be given to the defendant to vacate upto 31-3-1955,that the compensation payable up to the end of May, 1954, was Rs. 1,200 and the same was payable by monthly instalments, and future -compensation was to be payable at the rate of Rs. 150 on the 10th day of every month, and it was further agreed that there was to be a clause for possession, a default clause, and a clause with regard to payment of costs.

Mr. Laud mentioned to the Court that these were the terms agreed upon and he also asked the learned Judge that the suit should be placed the following day on board for a consent decree. The two solicitors then met and drew up more fully the terms of settlement and the two solicitors and Mr. Bhat counsel for the defendant asked Mr. Laud to draw up these terms in a proper formal shape.

It was then agreed that Mr. Bhat and the solicitors should attend Mr. Lauds chambers, which are in the High Court, at 6 p. m. to look through the terms which were to be drafted by Mr. Laud.

2. The terms which were handed over to Mr. Laud, and it should be noted banded over by the plaintiffs solicitors, defendants solicitors and the defendants counsel, contained, besides the terms already mentioned to Court, a specific term that the defendant should pay the costs of the suit fixed at Rs. 300 and also a default clause that in default of payment of two compensation amounts the decree for ejectment was to be executed immediately.

Mr. Laud drew up the terms and Mr. Bhat attended his chambers and the final consent terms were approved by Mr. Bhat on behalf of his client. These terms were engrossed and a copy of the terms was sent to the solicitors of the defendant.

When the suit was called out before Coyajee J. on 23-6-1954, for the taking of a consent decree, a new counsel appeared on behalf of the defendant, Mr. M. R. Mody, and he informed the Court that the defendant was not agreeable to the consent terms which had been forwarded to the defendants attorneys.

Thereupon Coyajee J. directed the plaintiffs to take out a notice of motion for recording the compromise. Accordingly a notice of motion was taken out, and the learned Judge has dismissed the notice of motion, and the plaintiffs have now conic in appeal.

3. Now, the defendant does not dispute that the terms with regard to the amount of compensation in arrears and the compensation to be paid in future were agreed to by her. She says that the time within which she had to vacate was not agreed to by her and that she also had not agreed to the default clause provided in the consent terms.

In the final consent terms, it may be mentioned, there is one other term and that is that the defendant has to pay electric charges in respect of the premises. We may dispose of

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