JUDGMENT 1. THIS is an application for setting aside a decree which was passed on the basis of an agreement between Counsel. 2. THE application arises out of a suit for recovery of price of goods sold and delivered. The suit appeared in my daily list on the 8th August 1966. When the matter was called on shortly before the mid-day recess, counsel appearing for the parties stated that they had agreed to the disposal of the suit on certain terms. The terms were endorsed on the brief and a decree was passed accordingly. The endorsement is in these terms : "by consent there will be a decree for Rs. 7,017/- and for Rs, 350/- in full settlement of claim and costs, but if the defendants pay the said sums of rs. 7,017/- and Rs. 850/- by monthly instalments of Rs. 300/- by the first day of every month starting from on or before 1st September 1966, the plaintiff will accept the same in full settlement of claim and costs. In default of payment of any two instalments within the due period, the entire decretal amount then remaining due together with interest accrued thereon at 6 per cent from 8th August 1966 will forthwith become payable and the plaintiff will be entitled to execute the decree immediately," 3. ON the 9th August 1966, Mr. S. C. Sen of Messrs. Dutt and Sen, solicitors for the plaintiff company, mentioned the suit and asked for an order staying the drawing up of the decree. He said that the suit had been settled by counsel on terms which were highly prejudicial to his client and were considerably worse than the terms which had been offered earlier and rejected by his client. His client, therefore, intended to apply for setting aside the consent decree. In the circumstances, I thought that the decree ought not to be drawn up pending the disposal of the application and I made the order asked for. 4. THE application has now been made. The petition used as grounds of the application has been verified by one Birendra Nath Bannerjee, an officer of the plaintiff company, who was present in Court when the suit was settled by counsel. The plaintiff's case is that Mr. S. C. Sen was in charge of the suit. 4. THE application has now been made. The petition used as grounds of the application has been verified by one Birendra Nath Bannerjee, an officer of the plaintiff company, who was present in Court when the suit was settled by counsel. The plaintiff's case is that Mr. S. C. Sen was in charge of the suit. He had been lying ill for sometime and came to the office on the 8th August 1966 after he had recovered from his illness. Owing to his indifferent health, Mr. Sen did not attend the court himself, but deputed Mr. H. K. Dutt, an assistant of his firm to look after the suit. Mr. Dutt was present in court when counsel discussed the terms of settlement. Then he left the court to consult Mr. Sen. Mr. Sen showed Mr. Dutt certain correspondence which had passed between the parties from which it appeared that certain terms had been offered by the defendants to the plaintiff for settlement of the suit and the plaintiff had rejected the offer. Mr. Sen then told Mr. Dutt to instruct counsel not to consent to any terms. 5. IT is stated in the petition that at the material time neither Mr. Birendra Nath Bannerjee nor Mr. H. K. Dutt had knowledge of these letters. These are the letters : Dear Sirs, we confirm having discussed the following with you on 14. 6. 66. We are enclosing herewith our order dated 21st June 1966 for the total quantity of 1500 kgs. in different gauges to be delivered at the rate of 250 kgs. per month which we hope you will find in order. Regarding old dues it has been mutually agreed that we shall liquidate the outstanding amounting to Rs. 6522. 83 paise at the rate of Rs. 1000/- per month. The suit filed by you shall be withdrawn, each party paying his own costs. Yours faithfully, for D. S. Industrial Corpn, sd. /- Manager. Dear Sirs, clts : National Insulated Cable Co. of India Ltd. Our client has handed over to us your letter of the 21st ultimo with instructions to reply thereto. Our client has no desire to supply any goods to you unless full payment of their dues for which a suit has been instituted against you is made by you. Dear Sirs, clts : National Insulated Cable Co. of India Ltd. Our client has handed over to us your letter of the 21st ultimo with instructions to reply thereto. Our client has no desire to supply any goods to you unless full payment of their dues for which a suit has been instituted against you is made by you. After the said sum is paid, our client can consider supplying you goods against cash payment and not otherwise. The statement about the mutual agreement is absolutely false and there was no agreement whatsoever for payment by instalments or withdrawing the suit or for our clients bearing their own costs. Yours faithfully, sd. /- Dutt and Sen, 6. MR. Dutt himself has filed an affidavit. He says that he was not aware of those letters and when he returned to court after having consulted Mr. Sen, who apprised him of the correspondence, he found that the suit had been disposed of. It is not in dispute that learned counsel on either side had no knowledge of these letters nor had they been told of any earlier offer by the defendants to pay a sum slightly smaller than the claim in suit by monthly instalments which was rejected by the plaintiff. The plaintiff contends that if Mr. Banerjee or the plaintiffs counsel had been aware of these letters, the settlement would not have been entered into. Other grounds have also been taken in support of the application. It is said that on 15th July 1966 the plaintiff had given definite verbal instructions to the plaintiffs solicitors, not to settle the matter. Counsel was not aware of these instructions. The settlement was, therefore, made under misapprehension on the part of counsel and against express instructions of client. The terms of settlement, on the basis of which the consent decree has been passed provide for monthly instalments of Rs. 300/-while the defendants had earlier offered monthly instalments of Rs. 1,000/- which had been rejected by the plaintiff. These terms of settlement, therefore, have not been entered into bonafide and are more prejudicial to the plaintiff the terms which the plaintiff had rejected earlier, In these circumstances, the plaintiff submits that the plaintiff has suffered grave injustice and the consent decree ought to be set aside, The defendant No. 2, in opposing the application, has stated in his affidavit that Mr. Dutt was actually present in court at the time the suit was disposed of. 7. IN my opinion, if Mr. Dutt was not aware, at the material time, of those letters of the alleged specific instruction of the plaintiff not to settle the suit, his presence in court would be a matter of no consequence. It was the duty of the solicitors to pass on to counsel the relevant information with regard to the earlier proposal for settlement and its rejection just as it was their duty also to pass on their client's Instructions not to settle the suit. This was not done on account of Mr. Sen's absence during his illness. Be that as it may, one of the questions which arises in this application is whether the settlement is binding on the plaintiff in spite of the failure on the part of the plaintiff's solicitors to communicate the relevant information or instructions to counsel and in spite of counsel having entered into the terms of settlement in ignorance of the rejection of the earlier terms. 8. A situation in some respects similar, arose in the case of (1)Chunilal Mondal v. Hiralal Mondal, 32 CWN 44. That was a suit for partition. A consent order was passed by agreement between counsel under which a member of the Bar was appointed Commissioner of Partition and Special Referee to enquire into and report on certain matters. One of the parties, Sm. Nistarini was an application for setting aside the consent order. She contended that she had given express instructions to her attorney that certain matters were in no circumstances to be referred to any private individual except on certain conditions and those instructions had been passed on by her solicitors to her counsel. By an affidavit, her solicitor admitted that he had received those specific instructions not to consent to refer to any private individual any of the matters in dispute except on conditions which had not been satisfied in the circumstances of the case. The judgment, as reported, is silent as to whether the solicitor, in fact, as the client contended, passed on those instructions to counsel. Counsel made a statement from the Bar to the effect that in consenting to the terms he was acting under a misapprehension as to the authority which had been conferred on him by his client. The judgment, as reported, is silent as to whether the solicitor, in fact, as the client contended, passed on those instructions to counsel. Counsel made a statement from the Bar to the effect that in consenting to the terms he was acting under a misapprehension as to the authority which had been conferred on him by his client. He was under the impression that he had full power to deal with matters in litigation while, in fact, he had only a limited authority. It is, therefore, reasonable to conclude that the solicitor failed to communicate or imperfectly communicated his client's specific instructions to counsel or counsel misunderstood the instructions. 9. MR. Justice Chotzner who heard the application accepted the contention that counsel had exceeded the limit of his authority and set aside the decree. In dismissing an appeal preferred against his order Rankin, C. J., observed : "if it is really true that the lady objected to the important matters of account (from her point of view) being referred to private arbitration and to a private referee and that was done by mistake of her counsel, I am not prepared to hold that the learned Judge was wrong in taking steps to see that the suit should proceed in the ordinary way. 10. HIS Lordship was of the opinion that in the case before him the court's assistance was invoked in the sense in which Lord Halsbury referred to the matter in his speech in the house of Lords in the case of (2)Neale v. Garden Lennox, 1902 AC 465. Neale v. G. Lennox, (supra), as is well-known, the plaintiff, in a suit by her for defamation, authorised her counsel in writing to consent to a reference on condition that all imputations on her character were publicly disclaimed in court. Her counsel agreed to refer the suit without any disclaimer by the defendant of imputations on her character. 11. ON an application made by the plaintiff, the consent order was set aside by an order made by Lord Alverstone which was reversed by the Court of Appeal but ultimately upheld by the House of Lords. Her counsel agreed to refer the suit without any disclaimer by the defendant of imputations on her character. 11. ON an application made by the plaintiff, the consent order was set aside by an order made by Lord Alverstone which was reversed by the Court of Appeal but ultimately upheld by the House of Lords. In his judgment, the Earl of Halsbury, L. C. said: -The Court is asked for its assistance when this order is asked to be made and enforced that the trial of the cause should not go on ; and to suggest to mo that a Court of Justice is so far bound by the unauthorised act of learned counsel that it is deprived of its general authority over justice between the parties is, to my mind, the most extraordinary proposition that I ever heard. I will only say for myself that I should absolutely repudiate any such principle. Where the contract is something which the parties are themselves by law competent to agree to, and where the contract has been made, I have nothing to say to the policy of law which prevents that contract being undone; the contract is by law final and conclusive. But when two parties seek as part of their arrangement, the intervention of a court of justice, to say that something shall, or shall not be done, although one of the parties to it is not clearly consenting to it, but has in the most distinct form said that the consent to refer - to take it from the jurisdiction of the ordinary tribunal - shall only be on certain terms, to say that any learned counsel can so far contradict what his client has said, and act without the authority of his client as to bind the Court itself, is a proposition which I certainly will never consent to". 12. 12. LORD Lindley agreed with the Lord Chancellor, and said "the judgment of the Court of Appeal proceeds upon the ordinary doctrines of agency but the ordinary doctrines of agency are only half of what is to be considered in a matter of this kind" In (3) Sourendra v. Tarubala, 57 Indian Appeals 133, their Lordships of the Judicial Committee held that, in the facts and circumstances of the case, counsel had properly exercised his authority to settle the matter by compromise, but were careful to indicate that "their Lordships desire to say nothing to prejudge a contention that the courts retain an inherent power not to allow their proceedings to be used to work a substantial injustice such as emerged in the case of Neale v. Gordon Lennox. " 13. IN (4) Furnival v. Bogle, 4 russels Chancery Reports 142 where an order was made by an agreement between counsel, it transpired that a proposition similar to the terms of the consent order had been made to the plaintiff at an earlier stage and had been rejected by him. The plaintiff had told his solicitor of the rejection of the proposition but counsel was not apprised of these facts, and therefore in settling the matter, counsel exercised his discretion in ignorance of those facts. Neither the plaintiff nor his solicitor was present in court at the time of the compromise. The plaintiff applied for setting aside the order. The order was set aside. In the course of his judgment, the lord Chancellor said : "if Mr. Furnival had been in court, when Mr. Sugden made his proposition, I have no doubt that he would have prevented the arrangement from being acceded to, and if the circumstances, to which I have referred, had been communicated to his counsel, they would not have assented to the order ; for it is quite impossible that they should have considered themselves justified in acceding, in the absence of Mr. Furnival and his solicitor, to the proposal of the Messrs. Bogle, had they been aware that a similar offer had been before made to him, and rejected ; Mr. Furnival's counsel, therefore, at the time when they assented to the arrangement, were not apprised of facts, the knowledge of which was essential in reference to the question on which they were to exercise their discretion. " 14. Bogle, had they been aware that a similar offer had been before made to him, and rejected ; Mr. Furnival's counsel, therefore, at the time when they assented to the arrangement, were not apprised of facts, the knowledge of which was essential in reference to the question on which they were to exercise their discretion. " 14. IN (5) Holt v. Jesse, (1876) 3 Ch. D. 177 where an application to set aside an order made by consent of counsel was refused, it having transpired that the applicant had acquiesced in the consent order, Malins, V. C. said : "if consent has been given under a misapprehension, or from a misstatement, or want of materials and if all the information which counsel ought to have when he gives a consent is now before him, it never has been the rule of this Court, and I also trust it never will be the rule of this Court, that the unfortunate client should be bound by such misapprehension. " In (6) Shepherd v. Robinson, (1919) 1 KBD 474, the Court of Appeal upheld an order of Davling, J. by which he set aside an Order made by consent of counsel on finding that the defendant had given instructions to her solicitor not to settle the suit, without the knowledge of counsel on either side or of the plaintiff's solicitor. 15. THE principles, which, in my opinion, emerge from the cases may be stated in these terms : where a compromise is agreed to by counsel in disregard of the restriction imposed upon his authority or under some mistake or misapprehension or in ignorance of materials relevant to the compromise the Court has a discretion to refuse its assistance to the compromise if such compromise results in failure of substantial justice. This is a discretion and a power the Court retains by reason of 'its general authority over justice between the parties' in the sense spoken of by the Earl of Halsbury in Neale v. Gordon Lennox, (supra ). The Court may exercise this power, even though the other side is not aware of the restriction imposed upon Counsel's authority or of the mistake or misapprehension on the part of Counsel. Where however, the party seeking to avoid the compromise, has acquiesced in the compromise, the Court will refuse to interfere. 16. The Court may exercise this power, even though the other side is not aware of the restriction imposed upon Counsel's authority or of the mistake or misapprehension on the part of Counsel. Where however, the party seeking to avoid the compromise, has acquiesced in the compromise, the Court will refuse to interfere. 16. IN my opinion, the decision in furnival v. Bogle, (supra), applies to this case with full force. It is true that there the plaintiff was not present at the time of compromise but here Mr. Bannerjee, an officer of the plaintiff company was present in Court. Mr. Bannerjee was not however aware that the plaintiff had rejected, at an earlier stage, certain terms which, at least in one material particular, that is to say, the amount of monthly instalments payable, was more advantageous to the plaintiff. In view of his ignorance of the relevant facts his presence in Court is hardly a matter of any consequence. As for Mr. H. K. Dutt's presence in court, as I have said, he has denied that he was present at the material time. Whether Mr. Dutt was present or not, it has not been disputed that at the time of entering into the compromise, the plaintiff's solicitors did not intimate to counsel the relevant facts and counsel entered into the compromise under the misapprehension that he had the apparent authority of a counsel, implied in law, to settle the suit, on such terms as he thought proper. 17. LEARNED counsel for the defendant contended that the terms of settlement on the basis of which the suit has been settled are different from the terms which the plaintiff had rejected and are not more prejudicial but more favourable than the terms offered earlier. By the earlier terms, the defendant proposed that the suit was to be withdrawn by the plaintiff and the parties were to pay their own costs. Moreover, the defendants had offered to pay only Rs. 6522. 83. By the agreed terms the defendants have submitted to a decree and are liable to pay Rs. 7017. 00 in respect of the plaintiff's claim and Rs. 850/- as costs. In other words, the defendants are paying more than they were under the earlier terms. I agree that the present terms, are, in these respects, better for the plaintiff. The monthly installment payable under the agreed terms is however only Rs. 7017. 00 in respect of the plaintiff's claim and Rs. 850/- as costs. In other words, the defendants are paying more than they were under the earlier terms. I agree that the present terms, are, in these respects, better for the plaintiff. The monthly installment payable under the agreed terms is however only Rs. 300/- in place of Rs. 1000/- under the earlier terms. This is, therefore, a term which is undeniably prejudicial to the plaintiff. 18. WHEN a proposition for compromise has been rejected by a party and some other proposition is accepted by counsel, on the basis of which the compromise is put through, and the party contends that the other proposition is equally prejudicial or more prejudicial than the earlier proposition, it is not for the Court to enter into the niceties of comparative advantages and disadvantages of parallel terms of settlement. If the proposition accepted by counsel works substantial injustice to his client in some material respect as seen against the background of the earlier proposition, the Court will not enforce the settlement. I do not desire to express any opinion on the question whether the plaintiff had given verbal instructions to Mr. S. C. Sen of Messrs. Dutt and Sen on the 18th July 1966 that the case should not to be settled but fought out. The statement has been verified by Birendra Nath Bannerjee as based on information which has been received from Mr. S. C. Roy, a director of the plaintiff-company. Counsel for the defendant commented on the fact that Mr. S. C. Roy has not filed any affidavit in that behalf. Mr. S. C. Roy has, however, subscribed his signature to the petition. Counsel for the defendant might very well have pointed out that Mr. S. C. Sen to whom the verbal instructions are alleged to have been given, has not made any affidavit to that effect and although Mr. H. K. Dutt in his affidavit has said that Mr. Sen asked him to inform counsel that the matter should not be settled under any circumstances, he does not say that Mr. Sen told him that he had received instructions from client not to settle the suit. 19. IN deciding this application I prefer to go by the admitted correspondence to which I have referred and not by the statement that the plaintiff had verbally instructed Messrs. Sen told him that he had received instructions from client not to settle the suit. 19. IN deciding this application I prefer to go by the admitted correspondence to which I have referred and not by the statement that the plaintiff had verbally instructed Messrs. Dutt and Sen not to settle the suit under any circumstances, 20. HAVING regard to the correspondence which passed between the parties and the fact that the plaintiff's counsel in entering into the settlement acted under a misapprehension and in ignorance of relevant material I am of the opinion that the Court ought not to enforce the compromise in the facts and circumstances of this case. I hear whispers that if I make the order asked for, the Court will be flooded with similar applications. I can only answer in the language of the earl of Halsbury :- "it has been said, if you allow this, every body would be making similar applications. That is policy. It has been said in such and such a case the parties were present in court and did not immediately repudiate the transaction, and therefore we are not satisfied that they did not consent. Those are all examples of what, in the exercise of its discretion, a Court might or might not do because it was or was not satisfied that the circumstances of the case did net justify the undoing of a bargain which had been made. " In the circumstances, the decree dated the 8th August 1966 is set aside and the suit is restored to the paper for hearing. As for costs, I make the same order as was made in the case of furnival v. Bogle, (supra). The plaintiff will pay the costs of hearing on the 8th August 1966 resulting in the consent order and the costs of this application.