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Suppression of Material Facts And Doctrine of Clean Hands

It is often seen that petitioners file Writ Petitions in the High Court but do not come with clean hands and suppress material facts in their Petition. The Courts have univocally held that suppression of material facts & not coming with clean hands disentitles the petitioners of discretionary relief under Article 226/227 of the Constitution. The doctrine is often stated as those seeking Equity must do Equity or Equity must come with Clean Hands.

It is settled law that a person who approaches the Court for granting relief, equitable or otherwise, is under a solemn obligation to candidly & correctly disclose all the material/important facts which have bearing on the adjudication of the issues raised in the case. He owes a duty to the court to bring out all the facts and desist from concealing/suppressing any material fact within his knowledge or which he could have known by exercising due diligence expected of a person of ordinary prudence.

If a petitioner/appellant/applicant is found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the court not only has the right but a duty to summarily deny relief to such person to prevent an abuse of the process of law and reject the Petition/Appeal on this ground alone without going to the merits of the case. The Apex Court has repeatedly invoked and applied the rule that a person who does not disclose all material facts has no right to be heard on the merits of his grievance:
  • State of Haryana v. Karnal Distillery Co. Ltd. (1977) 2 SCC 431,
  • Vijay Kumar Kathuria v. State of Haryana (1983) 3 SCC 333,
  • S.P. Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by LRs. and others (1994) 1 SCC 1,
  • Agricultural and Processed Food Products v. Oswal Agro Furane and others (1996) 4 SCC 297,
  • Union of India and others v. Muneesh Suneja (2001) 3 SCC 92,
  • Sunil Poddar and others v. Union Bank of India (2008) 2 SCC 326 and
  • G. Jayshree and others v. Bhagwandas S. Patel and others (2009) 3 SCC 141.
It is relevant that the Apex Court in Dalip Singh v. State of U.P. (2010) 2 SCC 114 condemned the practice of misrepresentation of facts and suppression of material facts & observed as under:

For many centuries, Indian society cherished two basic values of life i.e., Satya (truth) and `Ahimsa' (non-violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of justice delivery system which was in vogue in pre-independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences.

However, post-independence period has seen drastic changes in our value system. The materialism has over-shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In last 40 years, a new creed of litigants has cropped up.

Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final.

The Apex Court in Hari Narain v. Badri Das in AIR 1963 SC 1558, this Court adverted to the aforesaid rule and revoked the leave granted to the appellant by making the following observations:

It is of utmost importance that in making material statements and setting forth grounds in applications for special leave made under Article 136 of the Constitution, care must be taken not to make any statements which are inaccurate, untrue and misleading. In dealing with applications for special leave, the Court naturally takes statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading.

Thus, if at the hearing of the appeal the Supreme Court is satisfied that the material statements made by the appellant in his application for special leave are inaccurate and misleading, and the respondent is entitled to contend that the appellant may have obtained special leave from the Supreme Court on the strength of what he characterizes as misrepresentations of facts contained in the petition for special leave, the Supreme Court may come to the conclusion that in such a case special leave granted to the appellant ought to be revoked.

In the case of G. Narayanaswamy Reddy and others v. Governor of Karnataka and other AIR 1991 SC 1726, the Court denied relief to the appellant who had concealed the material facts. While dismissing the special leave petition, the Court observed thus:

Curiously enough, there is no reference in the Special Leave Petitions to any of the stay orders and we came to know about these orders only when the respondents appeared in response to the notice and filed their counter affidavit. In our view, the said interim orders have a direct bearing on the question raised and the non-disclosure of the same certainly amounts to suppression of material facts.

On this ground alone, the Special Leave Petitions are liable to be rejected. It is well settled in law that the relief under Article 136 of the Constitution is discretionary and a petitioner who approaches this Court for such relief must come with frank and full disclosure of facts. If he fails to do so and suppresses material facts, his application is liable to be dismissed. We accordingly dismiss the Special Leave Petitions.

In the case of Amar Singh v. Union of India (2011) 7 SCC 69, the Apex Court while dealing with the said controversy held thus:

57. In one of the most celebrated cases upholding this principle, in the Court of Appeal in R. v. Kensington Income Tax Commissioner{1917 (1) K.B. 486} Lord Justice Scrutton formulated as under: and it has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts- facts, now law.

He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have been fully and fairly stated to it, the Court will set aside any action which it has taken on the faith of the imperfect statement.

58. It is one of the fundamental principles of jurisprudence that litigants must observe total clarity and candour in their pleadings and especially when it contains a prayer for injunction. A prayer for injunction, which is an equitable remedy, must be governed by principles of uberrima fide.

It is apposite to refer to the Apex Court in K.D. Sharma v. SAIL (2008) 12 SCC 481, wherein the Apex Court observed thus:

24. The jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary. Prerogative writs mentioned therein are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the Writ Court must come with clean hands, put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the Court, his petition may be dismissed at the threshold without considering the merits of the claim. .......

26. A prerogative remedy is not a matter of course. While exercising extraordinary power a Writ Court would certainly bear in mind the conduct of the party who invokes the jurisdiction of the Court. If the applicant makes a false statement or suppresses material fact or attempts to mislead the Court, the Court may dismiss the action on that ground alone and may refuse to enter into the merits of the case by stating:
We will not listen to your application because of what you have done. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it.

28. The above principles have been accepted in our legal system also. As per settled law, the party who invokes the extraordinary jurisdiction of this Court under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play `hide and seek' or to `pick and choose' the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of Writ Courts and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because, the Court knows law but not facts.

The Apex Court in the case of Welcom Hotel v. State of A.P., (1983) 4 SCC 575 deprecated filing of Petition under Article 32 of the Constitution the Hoteliers challenging the maximum price of foodstuffs fixed by the Government contending that it was uneconomical and obtained ex parte stay order although the prices were fixed as per the agreement between the petitioners and the Government but the said fact was suppressed. The Court dismissed the Petition holding thus: Petitioners who have behaved in this manner are not entitled to any consideration at the hands of the Court.

It is pertinent to refer to Tilokchand H.B. Motichand 1969 1 SCC 110 & A Shanmugam v. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Sangam (2012) 6 SCC 430 have held that person seeking equity must do equity. It is not just the clean hands, but also clean mind, clean heart and clean objective that are the equitable fundamentals of judicious litigation. The legal maxim jure naturae aequum est neminem cum alterius detrimento et injuria fieri locupletiorem, which means that it is a law of nature that one should not be enriched by the loss or injury to another, is the percept for Courts.

Wide jurisdiction of the court should not become a source of abuse of the process of law by the disgruntled litigant. Careful exercise is also necessary to ensure that the litigation is genuine, not motivated by extraneous considerations and imposes an obligation upon the litigant to disclose the true facts and approach the court with clean hands. No litigant can play hide and seek with the courts or adopt pick and choose True facts ought to be disclosed as the Court knows law, but not facts.

One, who does not come with candid facts and clean breast cannot hold a writ of the court with soiled hands. Suppression or concealment of material facts is impermissible to a litigant or even as a technique of advocacy. In such cases, the Court is duty bound to discharge rule nisi and such applicant is required to be dealt with for contempt of court for abusing the process of the court.

In Ram Saran vs. IG of Police, CRPF and others, (2006) 2 SCC 541, the Apex Court observed thus:

A person who seeks equity must come with clean hands. He, who comes to the court with false claims, cannot plead equity nor would the court be justified to exercise equity jurisdiction in his favour. A person who seeks equity must act in a fair and equitable manner. ...............

In Ram Preeti Yadav Vs. U.P. Board of High School and Intermediate Education and others, 2003 (Suppl.) 3 SCR 352, it was reiterated after referring to various earlier decisions of the Apex Court that fraud, misrepresentation and concealment of material fact vitiates all solemn acts In Rajabhai Abdul Rehman Munshi Vs. Vasudev Dhanjibhai Mody, AIR 1964 SC 345, it was held that if there appears on the part of a person, who has approached the Court, any attempt to overreach or mislead the Court by false or untrue statements or by withholding true information which would have a bearing on the question of exercise of the discretion, the Court would be justified in refusing to exercise the discretion.

In the case of Dr Buddhi Kota Subbarao Vs K Parasaran & Ors AIR 1996 SC 2687 the Apex Court observed as under:
No litigant has a right to unlimited drought on the Court time and public money in order to get his affairs settled in the manner he wishes. However, access to justice should not be misused as a license to file misconceived and frivolous petitions.

In Hari Narain v. Badri Das AIR 1963 S.C. 1558, the Apex Court while revoking the leave granted to the appellant made the following observations:

It is of utmost importance that in making material statements and setting forth grounds in applications for special leave made under Article 136 of the Constitution, care must be taken not to make any statements which are inaccurate, untrue and misleading. In dealing with applications for special leave, the Court naturally takes statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading. Thus, if at the hearing of the appeal the Supreme Court is satisfied that the material statements made by the appellant in his application for special leave are inaccurate and misleading, and the respondent is entitled to contend that the appellant may have obtained special leave from the Supreme Court on the strength of what he characterizes as misrepresentations of facts contained in the petition for special leave, the Supreme Court may come to the conclusion that in such a case special leave granted to the appellant ought to be revoked.

The Apex Court in S.P. Chengalvaraya Naidy vs. Jagannath AIR 1994 SC 853 at p. 855 has elucidated this doctrine thus:
The Courts of law are meant for imparting justice between the parties. One, who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the Court is being abused. Property grabbers, tax evaders, bank loan dodgers and other unscrupulous persons from all walks of life find the Court process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, whose case is based upon falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation.

The Allahabad High Court in the case of Babu Lal vs. Director of Income Tax (2006) 281 ITR 0070 further elaborated the doctrine of clean hand and held thus:

When a person approaches a Court of equity in exercise of its extraordinary jurisdiction under Art. 226/227 of the Constitution, he should approach the Court not only with clean hands but also with clean mind, clean heart and clean objective.

It would be trite to refer to the case of Ramjas Foundation v. Union of India & others (2010) 14 SCC 38 wherein the Apex Court has removed the misconception that these principles are only applicable to Writs & SLP’s before the Apex Court & the High Courts. The Phrase but also to the cases instituted in others courts and judicial forums in the said judgment specifically lays down that the principle that it is obligatory for a petitioner/appellant/applicant to approach any court or judicial forum with clean hands or face the ire of the courts/judicial forums who will not hesitate in applying the Doctrine of Clean Hands and rejecting his appeal/revision. Thus statement of untrue & misleading facts in the petition/appeal not only before the High Court & Apex Court but also before the District Courts, ITAT or CESTAT could entail rejection of the petition/appeal on this ground alone.

The Apex Court, in this case, propounding this principle observed as under:
The principle that a person who does not come to the Court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums.

The object underlying the principle is that every Court is not only entitled but is duty bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have bearing on adjudication of the issue(s) arising in the case.

It would be pertinent to refer to the case of Avenue Realities and Developers Private Limited vs. Appropriate Authority of IT Department (2012) 80 CCH 0124 wherein the Delhi High Court while dismissing the Writ Petition held as under:

Writ jurisdiction is discretionary. It is an equitable jurisdiction meant to do justice to the parties and remedy to injustice suffered by the petitioner at the hands of the Government/State. Concealment of material facts can disentitle a petitioner from seeking relief under a discretionary remedy. The petitioner must come to the Court with clean hands and state truly and correctly the material facts. The present case is clearly one where the petitioner has failed and has not stated the material fact that they, i.e., the petitioner and the respondent Nos. 3 and 4 had received the full apparent sale consideration….

The High Court of Karnataka in Ratnachudamani S. Utnal vs. Income Tax Officer (2004) 269 ITR 272 dismissed the Writ as the Petitioner had not approached the Court with clean hands & held thus:

Further, it is significant to note here itself that, the petitioner himself has appeared before the assessing authority on 16th Aug., 2000 and stated that : I have converted the lands into NA and paid Rs. 1,21,410 as development charges and Rs. 2,00,000 as cost of land. The cost of land was paid to above two persons in 1987. I sold so far 56 plots from 1984 to 1996. But, this aspect of the matter has not at all whispered by the petitioner in the present writ petitions. The petitioner has intentionally and deliberately suppressed the material facts. If the petitioner wants any relief at the hands of this Court, he has to approach the Court with clean hands and it is duty cast on the petitioner to state the true facts and make out a case, as rightly pointed out by the learned senior standing counsel for the respondent. Therefore, the writ petitions are liable to be dismissed on the ground of suppression of material facts.

The Karnataka High Court in the case of Commissioner of Income Tax vs. Electronic Research Ltd. & Anr. (2003) 262 ITR 361 while dismissing the Writ Petition of the assessee vehemently criticized the conduct of the assessee in not approaching the Court with clean hands & held thus:

It is rather unfortunate that the Tribunal has not focused the after effect of fraudulent pleas and fraudulent acts by litigants while passing the impugned order. I must also point out at this stage that the wheels of justice can move only on true facts. Any mischief including a fraud on the Tribunal would result in derailing the wheels of justice. Justice is based on truth and truth cannot be trampled by an act of fraud.

A litigant has to come to the Court with clean hands and an unclean hand has to be shown the door by a Court and not an entry to the Court. Such entries to such persons would pollute the true atmosphere of a temple of justice. All these necessary material unfortunately is not considered by the Tribunal, while rejecting the petition.

The High Court of Kerala in Hajee P. Hussain Khan vs. Agricultural Income-Tax Officer & Ors. (2000) 241 ITR 308 has held thus:

Thus there is a clear case of material suppression of facts and lack of bona fides in coming to the Court without disclosing them. The jurisdiction under article 226 of the Constitution of India cannot be invoked in favour of a person who has not come to this Court with clean hands.

In Marappa Gounder vs. Central R.T. Board (1956) 1 MLJ 324, the learned judge of the Madras High Court has held that the Court shall refuse a writ on the basis of suppression of facts. It was observed as follows:

It is a well-settled proposition of law that it is the duty of a person invoking the special writ jurisdiction of a Court to make a full and true disclosure of all relevant facts. He should not suppress any facts. An applicant for a writ under article 226 of the Constitution must come in the manner prescribed and must be perfectly frank and open with the Court. It he makes a statement which is false or conceals something which is relevant from the Court the Court will refuse to go into the matter.

If the Court comes to the conclusion that the affidavit in support of the application was not candid and did not fully state the facts, but either suppressed the material facts or stated them in such a way as to mislead the Court as to the true facts, the Court ought, for its own protection and a prevent an abuse of its process, to refuse to proceed any further with the examination of the merits.

The reason for the adoption of this rule is not to arm the applicant’s opponent with a weapon of technicality against the former, but to provide an essential safeguard against abuse of the process of the Court. Where the petitioner is clearly found to have suppressed material and relevant facts which, if brought to the notice of the Court when applying for a rule nisi, should certainly have influenced the Court in deciding one way or the other, and such suppression was certainly calculated to deceive the Court into granting the order of the rule nisi, the petition should on that short ground be dismissed.

Similarly the Indore Bench of the Madhya Pradesh High Court in Ajit Kumar Pitaliya vs. Income Tax Officer (2009) 318 ITR 0182 dismissed the appeal of the assessee in limine for failure to come with clean hands & held as under:

……He must come to the Court with clean hands. Accordingly and in view of foregoing discussion, which alone is sufficient, the appeal is found to be devoid of any merit. It fails and is dismissed in limine.

It would be trite to refer to the Apex Court's Judgment in Prestige Lights Ltd. v. State Bank of India, (2007) 8SCC 449, wherein the Court held thus:

The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter......

The said observation was quoted with approval by one of us in Arunima Baruah v. Union of India (UOI) and Ors., (2007) 6 SCC 120, wherein the question which was raised was:

How far and to what extent suppression of fact by way of non- disclosure would affect a person's right of access to justice is the question involved in this appeal.......

The Court further held thus: It is trite law that so as to enable the court to refuse to exercise its discretionary jurisdiction suppression must be of material fact. What would be a material fact, suppression whereof would disentitle the appellant to obtain a discretionary relief, would depend upon the facts and circumstances of each case. Material fact would mean material for the purpose of determination of the lis, the logical corollary whereof would be that whether the same was material for grant or denial of the relief.   If the fact suppressed is not material for determination of the lis between the parties, the court may not refuse to exercise its discretionary jurisdiction. It is also trite that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands. But even if the said dirt is removed and the hands become clean, whether the relief would still be denied is the question.

In S.J.S. Business Enterprises (P) Ltd. AIR 2004 SC 2421 the Apex Court held thus:

As a general rule, suppression of a material fact by a litigant disqualifies such litigant from obtaining any relief. This rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. But the suppressed fact must be a material one in the sense that had it not been suppressed it would have had an effect on the merits of the case. It must be a matter which was material for the consideration of the Court, whatever view the Court may have taken.

It would be trite to refer to G.M. Haryana Roadways (2008) 4 SCC 127, a Special Leave Petition was filed which was barred by time. Reinstatement and regularization of service was not brought to the notice of the Court. The petition was dismissed by observing as under:-

12. ......Suppression of material fact is viewed seriously by the Superior Courts exercising their discretionary jurisdiction. In S.J.S. Business Enterprises (P) Ltd. v. State of Bihar and Ors. AIR 2004 SC 2421 this Court on suppression of fact held thus: As a general rule, suppression of a material fact by a litigant disqualifies such litigant from obtaining any relief. This rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. But the suppressed fact must be a material one in the sense that had it not bean suppressed it would have had an effect on the merits of the case.

It is thus no more Res Integra that the Doctrine of Clean Hands & non suppression of material facts is applicable with full force to every Proceedings before any Judicial Forum and therefore it is obligatory on the Petitioner/Appellant/Revisionist to stringently state the true & complete material facts of the case so that no allegation of falsehood or suppression of facts is made and the Petition/Appeal/Revision is not rejected at the first instance itself on this ground alone.

Written By: Inder Chand Jain
Ph no: 8279945021, Email: [email protected]

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