Court Cannot Be Used As A Tool By A Litigant To Perpetuate Illegality: SC [Read Judgment]

The court cannot be used as a tool by a litigant to perpetuate illegality, said the Supreme Court observing that a person who has liability but for the interim stay, cannot be permitted to reap the advantages on the basis of interim orders of the court.

The issue considered in Goa State Cooperative Bank Ltd. vs.Krishna Nath A. (Dead) was whether under the provisions of Section 109 of the Maharashtra Co-operative Societies Act, 1960 on expiry of the period fixed for liquidation, the proceedings for recovery of dues instituted/pending as against the members, shall stand closed.

The bench comprising Justice Arun Mishra, Justice S, Abdul Nazeer and Justice MR Shah observed that the members who have obtained stay in appeal or on recovery proceedings or the case is pending, cannot take advantage of the fact that the period fixed for Liquidator under the Act is over. Referring to Amarjeet Singh v. Devi Ratan, the bench said that no person can suffer from the act of court and unfair advantage gained by a party of interim order must be neutralised. It said:

The Court should never permit a litigant to perpetuate illegality by abusing the legal process. It is the bounden duty of the court to ensure that dishonesty and any attempt to abuse the legal process must be effectively curbed and the court must ensure that there is no wrongful, unauthorised or unjust gain for anyone by the abuse of process of the court. No one should be allowed to use the judicial process for earning undeserved gains or unjust profits. The object and true meaning of the concept of restitution cannot be achieved unless the courts adopt a pragmatic approach in dealing with the cases.

The court also emphasized on the concept of restitution.The bench further observed:

"The principle of restitution enjoins a duty upon the courts to do complete justice to the party at the time of final decision, and to do away with the effect of interim order in the fact situation of the case. In South Eastern Coalfields Ltd. v. State of M.P., (2003) 8 SCC 648, it was observed that no party can take advantage of litigation, it has to disgorge the advantage gained due to delay, in case lis is lost.

The concept of restitution is a common law principle and it is a remedy against unjust enrichment or unjust benefit. The court cannot be used as a tool by a litigant to perpetuate illegality. A person who is on the right side of the law, should not have a feeling that in case he is dragged in litigation, and wins, he would turn out to be a loser and wrong-doer as a real gainer, after 20 or 30 years." 

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