1. Petitioner filed writ under Article 226 to set aside Lok Adalat award disposing NI Act complaint as compounded. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )
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2026 Supreme(Online)(Del) 18566
IN THE HIGH COURT OF DELHI AT NEW DELHI
Saurabh Banerjee, J
Equitas Small Finance Bank Ltd. – Appellant
Versus
Nirmala Bai Shanthilal – Respondent
W.P.(CRL) 2380/2026
Important Points
A litigant cannot resile from statements made by their nominated counsel in court on the grounds of lack of authority or instructions, as such a plea undermines the advocate-client relationship and the sanctity of the adjudicatory process.
Subject
Criminal Law - Negotiable Instruments Act
Act Referred
Headnote
(A) Advocate-Client Relationship - Statements made by Counsel - A party cannot resile from a statement made by their nominated counsel holding a valid vakalatnama on the plea of lack of instructions or authority, as it undermines the sanctity of the judicial process. (Para 17, 23)
(B) Lok Adalat Award - Finality of Proceedings - Once a matter is disposed of as compounded based on statements made by the party's representative, the party cannot seek revival by introducing a new version after a significant delay. (Para 15, 21)
Issues: Whether a petitioner can seek revival of a complaint case by claiming that the statement of settlement made by its counsel before the Court and Lok Adalat was unauthorized.
Result: Petition dismissed.
(B) Lok Adalat Award - Finality of Proceedings - Once a matter is disposed of as compounded based on statements made by the party's representative, the party cannot seek revival by introducing a new version after a significant delay. (Para 15, 21)
Issues: Whether a petitioner can seek revival of a complaint case by claiming that the statement of settlement made by its counsel before the Court and Lok Adalat was unauthorized.
Result: Petition dismissed.
Legal Category Hierarchy
- practice and procedure
- crime and sentencing
-
constitutional law
-
writ jurisdiction
- certiorari (Para 1)
-
writ jurisdiction
- criminal procedure
- alternate dispute resolution
- banking and finance
- contract law
Advocates:
For the Appellants/Petitioners: K.S. Mahadeva, Swati Bansal, R. Rangarajan
For the Respondents: None
For the Appellants/Petitioners: K.S. Mahadeva, Swati Bansal, R. Rangarajan
For the Respondents: None
Table of Contents
2. Petitioner argued counsel misunderstood instructions and made erroneous settlement statement without authority or ratification. (Para 11 , 12 )
3. Court doubted petitioner's claim, noting statements were made twice by counsel and petitioner remained silent for 13 months. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 )
4. A litigant cannot resile from orders passed on counsel's submissions; such attempt undermines advocate-client relationship and court sanctity. (Para 22 , 23 )
5. Writ petition dismissed in limine as without merit, with no order as to costs. (Para 24 )
6. Can a party resile from a statement made by its counsel before a court or Lok Adalat?
No, a party cannot resile from a statement made by its own counsel before a court or Lok Adalat, as it strikes at the foundation of the advocate-client relationship and undermines judicial sanctity. (Para 22 , 23 )
7. What is the effect of a party's silence after its counsel makes a statement in court?
Maintaining stoic silence for a long period after the statement raises doubt about the genuineness of a subsequent challenge and indicates the challenge is an afterthought. (Para 16 , 17 , 18 )
8. Can a party claim its counsel acted without authority after a settlement statement to a Lok Adalat?
A party cannot claim lack of authority when the same counsel continued to represent it and no action was initiated against the counsel for alleged misconduct. (Para 16 )
J U D G M E N T
1. By virtue of the present writ petition under Article 226 of the Constitution of India read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, the petitioner seeks issuance of a writ in the nature of Certiorari for setting aside/ recall of the Award dated 14.09.2024 passed by the learned Lok Adalat and restore the complaint case being C.C. NI Act No.3302/2024, Hereinafter “Complaint Case” before the learned JMFC (NI Act)-04, Saket District Court, South, New Delhi, Hereinafter “learned JMFC” alongwith other ancillary reliefs.
2. The facts involved are such that the respondents approached the petitioner for availing a Loan for a sum of Rs.14,50,000/-. The petitioner, vide sanction letter dated 24.03.2021 and pursuant to entering into the Facility Agreement dated 26.03.2021 sanctioned the aforesaid loan in favour of the respondents and as collateral security, the respondents, on 23.04.2021, mortgaged the title deed of their immovable property bearing Municipal No.40 (Old No.23/A), Second Cross, Wheeler Road, Cleveland Town, Ward No.91, Bangalore-560 005. Also, the respondents issued a post-dated cheque bearing the signatures of respondent no.2 issued from the joint account of the respondents in favour of the petitioner.
3. Subsequently, on account of the respondents failing to repay the loan amount, their account was declared as Non-Performing Asset on 03.08.2023. Thereafter, on 08.09.2023, the petitioner issued a Notice under Section 13(2) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 calling upon the respondents to clear the outstanding arrears.
4. Pursuant to the aforesaid classification, the respondents though made intermittent payments towards settlement of the loan amount, however, such payments were irregular and not on the stipulated dates. Subsequently, based on the mutual understanding between the parties and the assurances/ representations made by the respondents, their account was regularized by the petitioner on 16.09.2023.
5. Aggrieved by the respondents’ conduct, the petitioner presented the post-dated cheque for encashment on 08.01.2024 towards discharge of the credit liability, however, the said cheque was returned dishonoured vide Return Memo dated 18.01.2024 with the remark “Refer to Drawer”.
6. Pursuant thereto, though the respondents received the Legal Notice dated 01.02.2024, however, they failed to make payment for the balance loan amount. Hence, the petitioner filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881, being Complaint Case No.3302/2024 dated 19.03.2024 against the respondents herein.
7. During the pendency of the Complaint Case, on 08.08.2024, the counsel for the petitioner stated before the learned JMFC that the matter has been settled between the parties and the petitioner had received full and final payment towards the cheque amount from the respondents. Accordingly, the matter was referred to the National Lok Adalat to be held on 14.09.2024. For ease of reference, the order dated 08.08.2024 passed by the learned JMFC is reproduced as under: 
8. Thereafter, before the National Lok Adalat on 14.09.2024, it was again stated on behalf of the petitioner that the present case has been settled with the respondents and that the petitioner has received the entire payment towards settlement to its satisfaction against the cheque in question and that the present matter be disposed of as compounded.
Pursuant to the settlement arrived at between the parties and the aforesaid statement, the complaint case was disposed of as compounded under Section 147 NI Act and the respondents were acquitted. For ease of reference, the Award dated 14.09.2024 is reproduced as under: 
9. Subsequent to passing of the aforesaid Award dated 14.09.2024, on 25.09.2025, the petitioner moved an application for revival of the Complaint Case No.3302/2024, which came to be dismissed by the learned JMFC as t
