SUPREME COURT DIRECTS BCI TO PROBE AFTER CLIENT DISOWNS ADVOCATES WHO SETTLED CASE WITHOUT CONSENT:

The Supreme Court recently directed the Bar Council of India (BCI) to conduct a detailed inquiry into a case involving an allegedly fraudulent settlement agreement, where a party claimed he had never engaged the advocates who purportedly represented him. The matter came before a bench of Justice PS Narasimha and Justice AS Chandurkar, arising out of a dispute over a property sale agreement.

The dispute related to an agreement to sell (Mahadnama) dated 26 December 1986, under which the petitioner, Bipin Bihari Sinha @ Bipin Prasad Singh, alleged that the respondent, Harish Jaiswal, had agreed to sell a property for Rs. 63,000. The petitioner claimed to have paid Rs. 18,000 as advance at execution and the remaining sum in three instalments of Rs. 15,000 each, with the last payment allegedly completed by December 1989. According to him, despite full payment, the respondent refused to execute the sale deed, prompting legal action for specific performance. However, all three lower courts found that the petitioner had fabricated the payment records and other documents, and held that the agreement was never concluded.

The case reached the Supreme Court in a special leave petition. On 13 December 2024, the Court disposed of the matter after being informed that the parties had reached a settlement. However, this order came under challenge when the respondent, Harish Jaiswal, filed a miscellaneous application seeking recall of the settlement, asserting that he had never engaged any lawyer for the proceedings. He claimed to have come across the Supreme Court’s December order accidentally, and was shocked to find that the High Court’s judgment had been set aside based on the purported settlement.

Jaiswal alleged that when he consulted his Advocate-on-Record regarding the order, he discovered that a caveat had been filed in his name without his knowledge. He contended that this revealed a carefully planned conspiracy, allegedly orchestrated at the behest of the petitioner, in which certain individuals fraudulently entered appearance on his behalf and ensured that no notice was served on him. He maintained that the case had been instituted on the basis of a forged settlement agreement bearing fabricated signatures, with the intent to mislead the Court and secure a favourable order by fraud.

Court records indicated that four advocates, Senior Advocate Muneshwar Shaw, Advocate Rattan Lal, Advocate-on-Record J.M. Khanna, and Advocate Shefali Sethi Khanna, had appeared in the matter. On 13 May, it was submitted on behalf of AoR Khanna that he had left legal practice and was never engaged in the case, while Advocate Shefali Sethi also denied any involvement.

The Supreme Court ordered a preliminary inquiry to determine how it came to appear that the respondent’s counsel had been engaged for the so-called settlement. The Court stated that, depending on the findings, further action could include directions for lodging an FIR. It appointed Advocate Vipin Nair, President of the Supreme Court Advocate-on-Record Association, along with Advocates Nikhil Jain and Amit Sharma, to assist in the matter.

Observing that the facts leading to the disposal of the special leave petition required detailed scrutiny, particularly the role of advocates involved in preparing and filing the settlement agreement, the Court directed the BCI to investigate and submit a report by October 2025.