Playing Fraud & Disabling Court From Disseminating Justice: Telangana HC Imposes ₹15 Lakh Cost On Party, Counsel For Suppressing Material Facts

The Telangana High Court has imposed a cost of Rs 15 lakh on a petitioner and advocate for approaching the Court with unclean hands and suppressing material information.

Justice Nagesh Bheemapaka passed the order in a writ petition after noting that the petitioner's counsel on two previous occasions had been warned about the dissatisfaction of the Court due to his unbecoming conduct and for wasting judicial time by filing a case with suppressed facts. 

"Concealing / suppression of material facts would amount to abuse of process of law, playing fraud with Court as well as opposite party.....If he/she withholds some vital/relevant material, in order to gain an advantage over the other side, then he/she would be guilty of playing fraud which cannot be countenanced...litigation like the present one is contributing fuel to fire in mounting pendency, disabling the Courts to discharge the prime duty of justice dissemination. One needs to keep in mind that there is an innocent sufferer on the other side of every irresponsible and senseless claim," the Court said.

The Court had previously imposed a cost of Rs 1 lakh on the counsel on two previous occasions but had recalled one such order on the request of a junior counsel.

Background:

The present plea was filed challenging an alleged auction conducted of the petitioner's house and the interest calculated by the lending bank, without allowing the petitioner to clear his dues.

The petitioner stated that before Covid-19 he had mortgaged his house for Rs 30 lakh and was paying his dues on time. However, due to the pandemic, his business took a big hit and he became incapable of paying back the mortgage amount.

It was submitted that the bank initiated legal proceedings, allegedly obtained an order without notice, and filed an execution petition praying for the attachment of the petitioner's property.

The petitioner filed a plea in 2023 challenging the attachment order and the High Court ordered for a stay on the condition that the petitioner paid 30% of the loan amount within 3 months.

After 5 months, in October the petitioner alleged that he found out that without any prior notice, the bank conducted an open house on the property on the 12th of October, 2023.

The petitioner therefore challenged the auction by way of the present writ and submitted that no intimation was given to him whatsoever by the bank regarding the open house.

The respondent's counsel argued that a plea was initiated by the same petitioner and lawyer, challenging the notice issued to the petitioner on 4-10-2023 before conducting the open house.

It was also brought to the notice of the Court that the interim order of stay granted by the High Court had been vacated by an order passed in July 2023.

Taking exception to the conduct of the petitioner's counsel in approaching the Court on multiple occasions with similar surreptitious pleas despite being warned, the Court imposed a cost of Rs 15 lakhs.

"The parties have to disclose the details of all legal proceedings and litigation either past or present concerning any part of the subject matter of dispute which is within their knowledge. In case, according to the parties to the lis, no legal proceedings or court litigation were or are pending, they have to mandatorily state so in their pleadings in order to resolve the dispute between the parties in accordance with law," it concluded.

WP 2949 of 2024

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