[Deficient Stamp Duty] Lawyer May Decide To Restrict Prayer To Waiver Of Penalty When Court Is Not Inclined To Grant Any Relief: Allahabad HC

The Allahabad High Court has that the decision of the lawyer to restrict the prayer to waiver of penalty when the court is not inclined to grant any relief cannot be said to be without any authority.

Justice Subhash Vidyarthi held that,

“if the lawyer assessed that there was no chance of success of the entire appeal and he decided to restrict his prayer for waiver of the penalty, it cannot be said that he acted absolutely without any authority and that might be the reason as to why the petitioner did not initiate any proceedings against his Advocate who had given the concession.”

Factual Background

Petitioner approached the High Court against the order of the Collector, Unnao regarding deficiency in stamp duty paid by the petitioner and recovery of the Rs. 15,24,220/- along with same amount of penalty. Further, petitioner challenged the order of the Commissioner, Lucknow Division, Lucknow by which the appeal filed by the petitioner was dismissed upholding the stamp deficiency but waving the penalty.

A preliminary objection was raised by the Standing Counsel stating that the petitioner's counsel had made an offer to the Court that the petitioner will deposit Rs. 15,24,220/- but the penalty be waived. It was on this offer by the counsel that the penalty of Rs. 15,24,220/- was waived and the stamp deficiency was upheld.

Reliance was placed on Sree Surya Developers & Promoters v. N. Sailesh Prasad, B, where the Supreme Court held that where a consent decree is sought to be challenged, the only remedy is to approach the Court before which the consent was entered into.

Per contra, counsel for petitioner argued that there was no compromise entered into between the parties, therefore the aforesaid decision was not applicable in the present case. Reliance was placed on Himalayan Coop. Group Housing Society v. Balwan Singh and others, where the Apex Court held that the lawyers are free to make decisions regarding tactics of the case but the decision regarding the rights of the client has to be made by the client.

“Generally, admissions of fact made by a counsel are 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,” held the Apex Court.

High Court Verdict

The Court relied on State of Maharashtra v. Ramdas Shrinivas Nayak, where when the counsel for State of Maharashtra objected to certain concession being recorded in the order of the High Court, the Supreme Court held that the order of the High Court is a record of what transpired before it. It was held that matters of judicial record cannot be questioned and the Court is barred by public policy to consider such objections.

Further, in Bhavnagar University v. Palitana Sugar Mill (P) Ltd., the Apex Court held that the word of the judges was the last word on what transpired in the Court and had to be taken as is. It was further held that if any party was aggrieved by such order of the Court, it ought to approach the same court when the case was fresh in the mind of the Court.

The Court distinguished the case of Himalayan Coop. Group Housing Society as there it was held that a lawyer's statement on law and legal conclusions are not binding on the parties, however, in the present case, the concession was not regarding any legal aspect of the case.

“The Hon'ble Supreme Court has held that in some cases, lawyers can make decisions without consulting the client, while in others, the decision is reserved for the client. 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.”

The Court held that the asking Court for waiver of penalty when there was no chance of success in the appeal was not without complete authority of the client. Accordingly, it was held that the petitioner could not challenge what happened before the appellant authority i.e. Commissioner Lucknow Division, Lucknow before the High Court, however, petitioner was granted liberty to challenge the same before the appellate authority.

Case Title: Ascent Education Trust,Kanpur Thru. Chairman Mr. Gurusharan Singh v. State Of U.P. Thru. Addl. Chief Secy./Prin. Secy. Deptt. Of Revenue,Lko. And 2 Others 2024 LiveLaw (AB) 542 [WRIT - C No. - 7092 of 2024]

Case citation: 2024 LiveLaw (AB) 542

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