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Lawyer has no implied authority to make an admission that would surrender client’s legal rights: Madras High Court

The Madras High Court recently reiterated that lawyers do not have any implied authority to make concessions to surrender a client’s legal rights unless the same would help achieve the purpose for which the lawyer was employed (Gurukul Lutheran Theological College v. The Commissioner and ors).

The Court explained that unequivocal concessions made by a lawyer on facts are binding on the client. However, such concessions on pure questions of law are not binding on the client.

Pertinently, the Bench of Chief Justice AP Sahi and Justice Senthilkumar Ramamoorthy pointed out,

The Court relied on Supreme Court rulings such as Union of India and others v. Mohanlal Likumal Punjabi and Himalayan Coop. Group Housing Society v. Balwan Singh recounts that lawyers are generally bound by their client’s instructions rather than authorized to substitute their judgment for the client’s judgment.

By retention, a lawyer has the authority to choose the means for achieving the client’s legal goal, while the client has the right to decide on what the goal will be, the top court had ruled in the Himalayan Coop. case.

The case prompting the discussion before the Madras High Court concerned a property tax dispute involving the Gurukul Lutheran Theological (GLT) College.

Demands made by the Chennai Corporation for the payment of property tax on the college and hostel buildings of the GLT College were disputed by it.

The college asserted that its buildings were exempt from property tax under Section 101(c) of the Chennai City Municipal Corporation Act, 1919 (the CCMC Act) since they were meant for imparting education.

Notably, a Single Bench of the High Court disposed of the petition moved by the college disputing the tax demand after recording an undertaking by the counsel appearing for the college that it was ready to pay the amount demanded by the Corporation without interest or penalty.

While challenging the single judge ruling, the College also asserted that it was not bound by this undertaking, specifically given that their petition took a contrary position.

The Division Bench, in turn, agreed that the undertaking did not bind the college, observing that it was clear that the lawyer had admitted liability without authorization. The Bench opined:

“…it cannot be concluded that there was a voluntary relinquishment of the claim for an exemption to constitute a waiver of a statutory right by the Appellant. As such, these contentions of the learned counsel for the Appellant, in this regard, are liable to be accepted.”

Having ruled thus, the Court proceeded to remand the matter back for reconsideration by the Chennai Corporation after observing that the GLT College had not provided it with any evidence to show that the buildings were being used for educational purposes.

The Chennai Corporation was directed to enquire whether the college was entitled to the claimed exemption after giving the college a reasonable opportunity to present their case. The Corporation was further directed to pass its orders in the matter within three months.

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