A litigant cannot resile from its counsel’s unchallenged settlement statements before two judicial forums.

The respondents obtained a loan of ₹14,50,000 from the petitioner-bank, secured by a mortgage and a post-dated cheque.

After repayment defaults and dishonour of the cheque, the bank issued a statutory notice and instituted a complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881.

During the pendency of the complaint, the bank’s counsel stated before the learned JMFC on 8 August 2024 that the dispute had been settled and that full payment had been received; the matter was consequently referred to the National Lok Adalat.

On 14 September 2024, the bank’s counsel repeated the settlement and full-payment representation before the Lok Adalat, which compounded the complaint under Section 147 of the NI Act and acquitted the respondents.

Approximately thirteen months later, the bank sought revival of the complaint, contending that its counsel had acted under a misunderstanding, without authority, and that no settlement or payment had occurred.

The application was rejected by the JMFC, leading to the present writ petition under Article 226 of the Constitution read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Whether the petitioner-bank could resile from the statements made by its duly nominated counsel before the JMFC and the Lok Adalat that the dispute had been settled and the cheque amount had been paid in full.

Whether the Lok Adalat Award dated 14 September 2024, by which the complaint was compounded under Section 147 of the NI Act and the respondents were acquitted, could be recalled or set aside and the complaint restored on the plea of lack of instructions or authority.

The Court applied Article 226 of the Constitution and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in considering the challenge to the criminal-court and Lok Adalat orders.

Section 147 of the Negotiable Instruments Act, 1881 permits offences under the Act to be compounded, forming the basis for disposal of the complaint and acquittal of the respondents pursuant to the settlement statement.

The Court further applied the established procedural principle that a litigant cannot resile from or disown statements and concessions made by its duly authorised counsel before a court, particularly where those statements have formed the basis of judicial orders.

A party represented by a counsel holding a valid vakalatnama is ordinarily bound by the counsel’s representations, absent credible and timely proof of want of authority, fraud, or other exceptional circumstances.

The Court found that the settlement and full-payment representation was not an isolated or inadvertent statement: it was made before the JMFC on 8 August 2024 and reiterated before the Lok Adalat on 14 September 2024, with separate statements recorded on both occasions.

The petitioner was represented by its nominated counsel under a duly executed vakalatnama, and the counsel’s statements were acted upon by both forums.

The bank raised the alleged lack of authority only after approximately thirteen months, continued to be represented by the same counsel, did not initiate proceedings against him, and produced no supporting affidavit or satisfactory particulars explaining the alleged misconduct.

The Court also noted inconsistencies in the petitioner’s competing versions—namely, that there was neither a settlement nor payment, while simultaneously asserting that the respondents had been given an opportunity to pay and later reneged after obtaining the Lok Adalat Award.

In these circumstances, permitting the petitioner to withdraw its counsel’s uncontroverted statements would undermine the advocate–client relationship, the sanctity of counsel’s role in judicial proceedings, and the finality of orders passed on the basis of such representations.

The writ petition was found to be devoid of merit and was dismissed in limine, with no order as to costs.