Patna High Court
The State Of Bihar vs Arena Food And Agro Industries Private ... on 11 July, 2025
Author: Ashutosh Kumar
Bench: Partha Sarthy, Ashutosh Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.676 of 2025
In
Civil Writ Jurisdiction Case No.6873 of 2025
======================================================
1. The State of Bihar through the Principal Secretary, Mines and Geology
Department, Government of Bihar, Vikash Bhawan, Bailey Road, Patna.
2. The Principal Secretary, Mines and Geology Department, Government of
Bihar, Vikas Bhawan, Bailey Road, Patna.
3. The Additional Secretary, Mines and Geology Department, Government of
Bihar, Vikas Bhawan, Bailey Road Patna.
4. The Director, Mines and Geology Department, Government of Bihar, Vikas
Bhawan, Bailey Road, Patna.
5. The District Magistrate cum Collector, Sheikhpura.
6. The Mineral Development Officer, Sheikhpura.
... ... Appellant/s
Versus
Arena Food and Agro Industries Private Limited a Company incorporated
under the provisions of the Companies Act, 1956, having its registered office
at Village Nimi, P.S. Shekhopur, District Sheikhpura, through its Director,
Shreekrishan Kumar, aged about 39 (male) Son of Harangi Singh, resident of
village Nimmi, P.S. Shekhopur, District- Sheikhpura.
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. P.K. Shahi, AG
Mr. Ajay, GA-5
Mr. Ajit Kumar, GA-9
Mr. Pratik Kumar Sinha (AC to GA-5)
Mr. Saurav Kumar, Advocate
Ms. Nivedita, Advocate
For the Respondent/s : Mr. Suraj Samdarshi, Advocate
Mr. Avinash Shekhar, Advocate
Mr. Vijay Shanker Tiwari, Advocate
Ms. Simran Kumari, Advocate
Ms. Abhilasha Jha, Advocate
======================================================
CORAM: HONOURABLE THE ACTING CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE PARTHA SARTHY
ORAL JUDGMENT
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
2/13
(Per: HONOURABLE THE ACTING CHIEF JUSTICE)
Date : 11-07-2025
Re: Interlocutory Application No. 01 of 2025
The learned Advocate for the appellants/
applicants presses the instant interlocutory application for
condoning the delay of 28 days in preferring this appeal.
2. This appeal has been listed on special
mentioning by the learned Advocate General under very
peculiar circumstance. We, therefore, deem it appropriate to
ignore all the defects pointed out by the Stamp Reporter.
3. For the reasons stated in the application, the
delay of 28 days in preferring this appeal is condoned.
4. I.A. No. 1 of 2025 stands allowed.
Re.: L.P.A.No. 676 of 2025
1. The challenge to the judgment dated
05.05.2025
, passed by a learned Single Judge in CWJC No.
6873 of 2025, is only on the limited ground of the lawyer
appearing for the Mines Department having agreed to a
proposal offered by the writ petitioner, pursuant to which
the judgment was passed, and for which concession, the
lawyer did not have the express mandate of the Department
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
of Mines.
2. It has also been argued that without
substantiation by any written instruction/affidavit or any
express instruction to the lawyer, the concession given by
him, even if in the end result is financially beneficial to the
Department, cannot bind the Department. On this slender
issue, the appeal aims at having the judgment set aside and
the matter remanded to the learned Single Judge to decide
afresh.
3. It would not be very necessary to refer to the
facts of the case in detail. What is required to be stated for
appreciation of the argument on behalf of the
appellants/State is that the writ petitioner had obtained a
mining lease in Sheikhpura for Rs.29 crores for 05 years,
which expired sometime in the year 2022. According to the
lease agreement, the amount of Rs.29 crores was to be
deposited in five equal installments. Since the lease was
auctioned, therefore, the settlement amount was actually the
royalty. The writ petitioner also had taken the
environmental clearance by the State Environment Impact
Assessment Authority, which had proposed the capacity of
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
production at 11,41,250 tons per annum.
4. It appears from the judgment impugned that the
learned Single Judge took note of the fact that a lesser
amount of minerals could be extracted during the five-year
tenure. However, after the expiry of the lease, some stones
were found to be stowed on the mining site, for which
additional royalty was demanded. Some part of the
additional demand was met by the petitioner, though
claimed to have been done on wrong advice; but the
petitioner litigated with respect to the rest of the royalty
amount, which ran in about Rs. 6 crores.
5. The learned Single Judge also took note of the
fact that the stowed mineral at the mining site was
contemplated to be auctioned at a much lesser price. In that
context, the conclusion of a judgment in CWJC No.
13532/2023 was taken into account, which read as follows:
"6. Considering the submissions made on behalf
of the parties and taking note of the bonafide
undertaking of the petitioner that he is ready to
deposit the additional royalty amount within a
period of six months, this Court deems it apt and
proper to allow the petitioner to pay the amount
in six equal instalments on monthly basis
7. However, it is needless to observe that the
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
permission to lift the boulder/stones shall be
issued only after payment of first installment,
before 10th of November, 2023. It is also made
clear that within six months i.e., upto
10.04.2023 the entire payment of additional
royalty of Rs. 6,25,34,581/- must be made within
six equal monthly installments. Failure of any
installment in any month would lead to
cancellation of the order, giving liberty to
respondents to take appropriate action. Further,
this order will not prevent the Mines Department
to make any settlement with any lessee in
connection with the site, in question, but during
this period of six months, the site, in question,
will not be handed over to the successful
bidder."
6. Though on behalf of the Mines Department, it
was initially submitted that the directions were very clear
that upon failure of payment of any installment, there
would be cancellation of the order granting liberty to the
respondents to take appropriate action, and the Mines
Department would be free to make any settlement with any
party in connection with the minerals lying at the site
through auction.
7. After having noted the various stages of
litigation between the parties, i.e., the Mines Department
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
and the writ petitioner, the learned Single Judge agreed to
the plan offered by the petitioner for payment of additional
royalty with the permission to the writ petitioner to lift the
minerals already stowed at the site. But before doing this,
the learned Single Judge asked for the response of the
Mines Department.
8. The learned Advocate for the Mines
Department, with initial reluctance, agreed to ratify the plan
proposed by the writ petitioner and agreed to by the Writ
Court, considering that the result in effect would only
bring financial benefits to the Mines Department.
9. Today, the learned Advocate General submits
that if it were the decision of the learned Single Judge, it
might or might not have been challenged; but the decision
is primarily based on the concession of the lawyer
appearing for the Department, who did not have the express
instructions to agree to such a plan. The Writ Court also did
not ask for any affidavit or written instructions to be placed
on record.
10. Hence, the challenge and the request for
remanding the matter to the learned Single Judge for
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
writing out a fresh judgment on the claim of the writ
petitioner after the matter is wrested by both the parties.
11. On being questioned by the Court that if the
plan set out in the order was not on the
instructions/concession of the Mines Department, then,
perhaps, acceptance of money in terms of the order
amounted to a clear acquiescence, the learned Advocate
General submitted that such aspect should, for the moment
not be looked into, and pointed out that since 1990, the
consistent judicial view is that any concession made by a
government pleader cannot bind the government, as it is
obviously always unsafe to rely on the wrong or erroneous
or wanton confession made by the counsel appearing for
the State, unless it is in writing on instructions from the
responsible officer. [refer to Periyar and Pareekanni
Rubbers Ltd. v. State of Kerala; AIR 1990 SC 2192].
12. He has further pointed out that in Periyar and
Pareekanni Rubbers Ltd. (supra), it was clarified that the
same yardstick cannot be applied when the Advocate
General makes a statement across the bar. Since the
Advocate General makes the statement with responsibility
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
and in that case, any concession made would be binding.
13. In the present case, the Department had not
given any express instruction to the lawyer concerned for
agreeing to the proposal of the writ petitioner even though,
in the long run, it would have been beneficial for the
Department financially.
14. In order to buttress his submissions, a few
paragraphs from the decision of the Supreme Court in
Himalayan Coop. Group Housing Society v. Balwan
Singh & Ors.; (2015) 7 SCC 373 were brought to our
notice.
15. We consider it to be more expedient and
profitable to extract those paragraphs in their entirety for
appreciating the law of agency applicable in a client-lawyer
relationship.
"22. Apart from the above, in our view lawyers
are perceived to be their client's agents. The law
of agency may not strictly apply to the client-
lawyer's relationship as lawyers or agents,
lawyers have certain authority and certain
duties. Because lawyers are also fiduciaries,
their duties will sometimes be more demanding
than those imposed on other agents. The
authority-agency status affords the lawyers to
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
act for the client on the subject-matter of the
retainer. One of the most basic principles of the
lawyer-client relationship is that lawyers owe
fiduciary duties to their clients. As part of those
duties, lawyers assume all the traditional duties
that agents owe to their principals and, thus,
have to respect the client's autonomy to make
decisions at a minimum, as to the objectives of
the representation. Thus, according to generally
accepted notions of professional responsibility,
lawyers should follow the client's instructions
rather than substitute their judgment for that of
the client. The law is now well settled that a
lawyer must be specifically authorised to settle
and compromise a claim, that merely on the
basis of his employment he has no implied or
ostensible authority to bind his client to a
compromise/settlement. To put it alternatively
that a lawyer by virtue of retention, 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. If the
decision in question falls within those that
clearly belong to the client, the lawyer's conduct
in failing to consult the client or in making the
decision for the client, is more likely to
constitute ineffective assistance of counsel.
31. Therefore, it is the solemn duty of an
advocate not to transgress the authority
conferred on him by the client. It is always
better to seek appropriate instructions from the
client or his authorised agent before making any
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
concession which may, directly or remotely,
affect the rightful legal right of the client. The
advocate represents the client before the court
and conducts proceedings on behalf of the
client. He is the only link between the court and
the client. Therefore his responsibility is
onerous. He is expected to follow the
instructions of his client rather than substitute
his judgment."
16. It has further been submitted that generally if
an admission of a fact is made by counsel, it would be
binding on the principal as long as it is unequivocal. In case
of any doubt, it would be safer for the court not to accept
such admission until and unless the counsel making it is
authorised by his principal to make such admission. Lastly,
he has submitted that a client, and in this case, the
Department is not bound by a statement of admission,
which his lawyer was not authorised to make. [Also refer to
Bar of Indian Lawyers through its President Jasbir Singh
Malik v. D.K.Gandhi PS National Institute of
Communicable Diseases & Anr.; (2024) 8 SCC 430;
Paragraph 51].
17. Mr. Suraj Samdarshi, the learned Advocate for
the writ petitioner/respondent has laid stress on the
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
Department having accepted that offer and gone ahead and,
therefore, the department of the government be not
permitted to adopt a wavering approach and be permitted
the latitude of changing their mind for no apparent good
reason.
18. True it is, it has been further argued, that the
lawyer for the Mines Department initially objected to the
proposal made by the writ petitioner, but ultimately agreed
for bona fide reasons. If the judgment was complied with
initially, as some part of the payment of additional royalty
was made by the writ petitioner and accepted by the
Department, any back-pedaling on the issue would be
damaging to the institution and also would be unfortunate,
as under many circumstances, a court of law passes a
judgment on the acceptance of the proposition by the
parties unequivocally. That apart, the concession was not of
the kind which militated against the financial or any other
interest of the Department.
19. After having heard the learned Advocates for
the parties, we are of the view that it is correct that the
concession by the lawyer for the Department was made
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
without any instruction. It would, therefore, be an
unauthorised statement of a counsel which remained
unsubstantiated by any appropriate material or affidavit.
20. Thus, it was a concession without a mandate.
21. We do not wish to express our opinion on the
correctness of the approach of the Department for the
present only for the reason that such a defect in the
judgment could easily be cured if the matter is remitted to
the learned Single Judge to decide afresh on merits,
uninfluenced by any earlier concession made by the
counsel for the Department.
22. Needless to state that this exercise by the
learned Single Judge would only be done after affording
opportunity to both sides to file an affidavit or place on
record the material which would be necessary for the
disposal of the case.
23. We, therefore, set aside the judgment
impugned in the present appeal and remit it to the learned
Single Judge to pass a fresh judgment, not based on the
concession made by the lawyer for the Department.
24. We further clarify that we have not opined on
Patna High Court L.P.A No.676 of 2025 dt.11-07-2025
the merit of the judgment in any manner whatsoever.
25. Till the time the writ petition is decided afresh,
the status quo, as on date, shall be maintained.
26. The appeal stands disposed of accordingly.
27. Interlocutory application, if any, shall also
stand closed.
(Ashutosh Kumar, ACJ)
(Partha Sarthy, J)
Sujit/Avinash
AFR/NAFR NAFR
CAV DATE N/A
Uploading Date 11.07.2025
Transmission Date
