Article - Doctrine Of Clean Hands Applicable Not Only To SC/HC But To All Subordinate Judiciary

Doctrine Of Clean Hands Applicable Not Only To SC/HC But To All Subordinate Judiciary

By Inder Jain 

It is common mistaken belief that Doctrine of Clean Hands is only applicable only to Writs under Article 226/227 of the Constitution in the High Court and Writs under Article 32 or SLP under Article 136 of the Constitution in the Supreme Court. However, this notion is fallacious in as much as the Doctrine of Clean Hands is applicable with full force to all Courts necessarily including the Subordinate Judiciary.

Clean hands, sometimes called the clean hand hands doctrine, unclean hands doctrine, or dirty hands doctrine, is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain an equitable remedy because the plaintiff is acting unethically or has acted in bad faith with respect to the subject of the complaint-that is, with "unclean hands". The defendant has the burden of proof to show the plaintiff is not acting in good faith.

The doctrine is often stated as "those seeking equity must do equity" or "equity must come with clean hands". A defendant's unclean hands can also be claimed and proven by the plaintiff to claim other equitable remedies and to prevent that defendant from asserting equitable affirmative defenses.

In the landmark case of Ramjas Foundation and another vs. Union of India and others, (2010) 14 SCC 38, Hon'ble the Apex Court has univocally held as under:-

• 21. 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 will be trite to refer to English Law almost 2 centuries back which acknowledged this principle and it's applicability to all courts in the case of Dalglish v. Jarvie, (1850) 2 Mac & G 231: 42 ER 89, Mac & G wherein at P. 238, Lord Langdale and Rolfe B. observed: (ER p. 89)

• It is the duty of a party asking for an injunction to bring under the notice of the Court all facts material to the determination of his right to that injunction; and it is no excuse for him to say that he was not aware of the importance of any fact which he has omitted to bring forward.

Similarly in Castelli v. Cook (1849) 7 Hare, 89 : 68 ER 36, Hare at p. 94, Wigram, V.C. stated the rule in the following words: (ER p. 38) 

• "... A plaintiff applying ex parte comes ... under a contract with the Court that he will state the whole case fully and fairly to the Court.

If he fails to do that, and the Court finds, when other party applies to dissolve the injunction, that any material fact has been suppressed or not property brought forward, the plaintiff is told the Court will not decide on the merits, and that, as he has broken faith with the Court, the injunction must go.

The same principle was enunciated in Republic of Peru v. Dreyfus Bros. & Co. 55 LT 802, LT at p. 803 wherein Kay J. held as under:

• I have always maintained, and I think it most important to maintain most strictly, the rule that, in ex parte applications to this Court, the utmost good faith must be observed. If there is an important misstatement, speaking for myself, I have never hesitated, and never shall hesitate until the rule is altered, to discharge the order at once, so as to impress upon all persons who are suitors in this Court the importance of dealing in good faith in the Court when ex parte applications are made.

Relevant it is to refer to appeal wherein Lord Cozens-Hardy M.R. and Warrington L.J. approved the view taken by the Divisional Court. Scrutton L.,J. who agreed that the appeal should be dismissed observed: (R. v. Kensington Income Tax Commr. (1917) 1 KB 486 (CA)

• "... 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, not 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 not 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."

It would be apropos to refer to Halsburys Laws of England, 4th Edn., Vol. 16, pp. 874-76, the law in this regard is stated in the following terms:

• 1303. He who seeks equity must do equity. In granting relief peculiar to its own jurisdiction a court of equity acts upon the rule that he who seeks equity must do equity. By this it is not meant that the court can impose arbitrary conditions upon a plaintiff simply because he stands in that position on the record.

The rule means that a man who comes to seek the aid of a court of equity to enforce a claim must be prepared to submit in such proceedings to any directions which the known principles of a court of equity may make it proper to give; he must do justice as to the matters in respect of which the assistance of equity is asked. In a court of law it is otherwise: when the plaintiff is found to be entitled to judgment, the law must take its course; no terms can be imposed.

• 1305. He who comes into equity must come with clean hands. A court of equity refuses relief to a plaintiff whose conduct in regard to the subject-matter of the litigation has been improper. This was formerly expressed by the maxim he who has committed iniquity shall not have equity, and relief was refused where a transaction was based on the plaintiffs fraud or misrepresentation, or where the plaintiff sought to enforce a security improperly obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money.

Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors or evade tax, for he may not maintain an action by setting up his own fraudulent design.

The maxim does not, however, mean that equity strikes at depravity in a general way; the cleanliness required is to be judged in relation to the relief sought, and the conduct complained of must have an immediate and necessary relation to the equity sued for; it must be depravity in a legal as well as in a moral sense. Thus, fraud on the part of a minor deprives him of his right to equitable relief notwithstanding his disability.

Where the transaction is itself unlawful it is not necessary to have recourse to this principle. In equity, just as at law, no suit lies in general in respect of an illegal transaction, but this is on the ground of its illegality, not by reason of the plaintiffs demerits."

It would be pertinent to refer to the Apex Court decision in A.V. Papayya Sastry & Ors. V. Govt. of A.P. & Ors., (2007) 4 SCC wherein the Court categorically held thus:

• "It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of law. Such a judgment, decree or order --by the first Court or by the final Court-- has to be treated as nullity by every Court, superior or inferior. It can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings".

The basic premise/ foundation of the Doctrine of clean hands is that by coming to the Court with unclean hands, the precious time of the Courts is wasted. It is relevant that due to mounting pendency of cases in all courts, the time of the subordinate judiciary is in no way less precious and therefore the doctrine of clean hands should all the more applied by the subordinate judiciary.

Moreover, the principles of 'SATYA' as enunciated in Dalip Singh v. State of U.P. (2010) 2 SCC 114 are applicable with full force to the proceedings before the Civil Courts, Tribunals and Judicial Forums.

It is apposite to refer to Oswal Fats and Oils Ltd. Vs. Additional Commissioner (Administration), Bareilly Division, Bareilly & ors.(2010) 4 SCC 728 wherein the Apex Court dismissing the appeal, awarded penalty/cost for violating the doctrine of clean hands. The Apex Court held thus:

• 35. In the result, the appeal is dismissed. Since the appellant has not approached the quasi judicial and judicial forums i.e., the Additional Commissioner, the High Court and this Court with clean hands and succeeded in securing interim orders, it is ordained to pay costs, which is quantified at Rs.2 lacs. With a view to ensure that functionaries of the State Government may not connive with the appellant and compound the wrong already done, we direct the Government of Uttar Pradesh not to renew the lease of the appellant at the end of 30 years period and deal with excess land in accordance with the provisions of the Act.

Following the age old Precedents of the English Courts and the Apex Court, the subordinate judiciary including the District Courts, Company Law Board, Consumer Disputes Redressal Commission, ITAT, CESTAT, Session Courts, Revenue Courts & Labour Courts are applying the Doctrine of Clean Hands with full force.

The counsels in the subordinate judiciary should plead violation of the doctrine of clean hands in appropriate cases and insist the Court to decide this as a preliminary issue. It is imperative for the judiciary to decide the issue of violation of doctrine of clean hands, whenever raised, as a preliminary issue and also impose heavy penalties/costs on the litigants for violation of the doctrine of clean hands as done in Oswal Fats (supra).

Written By: Inder Chand Jain

Email: inderjain2007@rediffmail.com, 

Ph no: 8279945021

 

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