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Judgment
Horwill, J.—The first respondent filed an application under Sections 4 and 68 of the Provincial Insolvency Act to set aside a sale held by the
Official Receiver. That petition was dismissed and the matter was carried in appeal to the District Judge. In that Court both sides made
endorsements on the appeal memo that the sale might be set aside on certain terms. The Judge thereupon set aside the sale on the conditions
endorsed on the memo of appeal. The ground for revision to this Court is that the advocate for the petitioner had no authority to enter into this
agreement.
A preliminary objection has been taken that no revision lies; because under the CPC no appeal lies against a decree passed on a compromise;
and by analogous reasoning a revision would not lie. The fallacy of that argument is that it is alleged by the petitioner that no legal compromise was
in fact entered into. If not, he would be entitled to appeal if the alleged compromise had been in an ordinary suit. Here, no appeal lies; but Section
75 of the Insolvency Act provides for a revision where the District Judge has erred in law. If, as the peti-tioner contends, the District Judge acted
illegally in passing an order on agreement between the advocates, then a revision petition against that illegal order would undoubtedly lie.
It is further argued that even though a revision petition lies, this matter need not be gone into in this petition, because the same question forms the
principal issue in a suit filed by the petitioner to set aside the order of the District Judge. It is however very doubtful whether such a suit would lie;
because Section 75 makes the decision of the District Judge final subject to revision by this Court. I do not however wish to pronounce a definite
opinion as to the maintainability of a suit; because I have not had the advantage of hearing counsel on this point.
Mr. Vaidyanatha Aiyar for the petitioner has quoted a number of decisions based on Jagapathy Mudaliar v. Ekambara Mudaliar (1897) 8
M.L.J. 40 : ILR Mad. 274 in which it was held that there was no implied authority to counsel in India to compromise such as there,was to counsel
in England. It was however definitely held in (1930) L.R. 57 I.A. 133 (Privy Council) that in India an advocate had the same implied authority to
compromise as he has in England. That was stated even more definitely in another decision of the Privy Council in (1935) L.R. 62 I.A. 196 (Privy
Council) . There is however no direct decision as to the effect on that implied authority of an express eontract embodied in a vakalatnama. In
Thenal Ammal v. Sokkammal LL.R.(1917) Mad. 233 the learned Judges found that the vakalatnama was inconsistent with an implied, authority to
compromise. Moreover, that decision was prior '' to (1930) L.R. 57 I.A. 133 (Privy Council) . In Soendranaih Mitra v. Herambanath
Bandhopadhya (1923) 45 M.L.J. a decision of 1923, it was found that the parties intended that a further vakalatnama should be executed giving
the counsel express authority to compromise; and it was held that as that intention had not been fulfilled, the counsel did not have such authority. In
(1930) L.R. 57 I.A. 133 (Privy Council) no vakalatnama had been filed and their Lordships said that,
Where the legal representative in Court of a client derives hi? authority from an express written . authority, such as a vakalatnama, different
considerations may well arise-,and in such cases their Lordships express no opinion as to the existence of any implied authority of the kind.
In Sheonandan Prasad Singh v. Hakim Abdul Fateh Mohamed Reza (1897) 8 M.L.J. 40 : ILR Mad. 274 above referred to, it was found that
the circumstances indicated that although counsel had such an implied authority, the compromise was not entered into as a result of that implied
authority; for the clients had been consulted during the course of the negotiations between the parties and the proposals and counter-proposals
emanated from the clients themselves, the counsel merely advising and passing on the proposals and the counter-proposals to the opposite side.
There can be no doubt that if it appears from the terms of the vakalatnama that the client did not intend to authorise his advocate to compromise,
then there would be no implied authority. It is also probably true that where it is clear that under the vakalatnama itself there is no express authority
to compromise, no authority could be implied; for it could then be argued that the parties had entered into a definite contract and had reduced all
the terms of their agreement to writing. In the case under consideration, however, where the form usual in this presidency was used, there is a
clause which might well be construed as authorising the advocate to enter into a compromise. It is this:
I execute this vakalatnama with consent agreeing to accept all the proceedings (conducted) by you therein as if done by me personally.
Although it might be difficult to say that this clause unequivocally authorises the advocate to compromise, yet I think that in construing a clause of
this kind, the scope of which is somewhat uncertain it is not unreasonable to bear in mind that advocates ordinarily have such an authority and to
assume that this clause was intended to embody that authority, which in the absence of a vakalatnama would be implied. I am not therefore
prepared to say that the compromise entered into was illegal.
It does not seem that the agreement was an unreasonable one. The petition is dismissed with costs.