Lady Justice Is Blindfolded Only To Be Non-Partisan, Not To Be Blind To Mischief Or Fraud Played Out By Dishonest Litigants: Delhi High Court

"Lady Justice is blindfolded only so as to be non-partisan; but not to be blind to mischief, deception or fraud being played-out before it by dishonest litigants making a mockery of the judicial process," the Delhi High Court has observed.

Justice Anup Jairam Bhambhani added that a Court is not a casino for a litigant to place a bet masquerading as a legal claim and to later withdraw from the proceedings if he finds he has a losing-hand.

The Court observed that no legal proceedings may be initiated by a litigant by way merely of a gamble as if placing a wager, from which the litigant may conveniently withdraw at any time, if matters are not going his way.

"A court is a forum for laying serious, bona-fidé claims, even if they turn-out to be legally untenable or meritless upon conclusion of the process. A court is not a place for fraudulent game-playing by dishonest litigants, to attempt to get judicial imprimatur for false claims. This derives from the inexorable, immutable and overarching principle that fraud or fraudulent conduct in a court of law vitiates all curial proceedings," it added.

The development ensued in a suit filed by the plaintiff claiming to be an intending purchaser of a property. The case sought to be made out was that the defendant was avoiding the execution of the sale deed in respect of the subject property in the plaintiff's favour and was trying to sell it to a third party.

When the suit first came up before the court, the court fee affixed on the plaint was found to be deficient and it was also observed that there was no averment in the plaint as to the readiness and willingness of the plaintiff to perform his part of the contract as mandated under sec. 16(c) of the Specific Relief Act, 1963. The plaintiff was accordingly directed to make-up the deficiency in court fee and to also file an affidavit in compliance.

Later, since both parties appeared to be ad-idem as to the sale transaction, the matter was re-notified to July 27. However in April, an application was moved in the matter, whereby the plaintiff sought to withdraw the suit.

On the same date, M/s Apogee Enterprises Pvt. Ltd. appeared at the hearing through their counsel and informed the court that the subject property was owned not by the defendant personally but by a corporate entity called M/s Joint Investments Pvt. Ltd. and, most importantly, that the subject property had several encumbrances over it. Accordingly, M/s Apogee Enterprises Pvt. Ltd. sought time to file an appropriate application seeking impleadment in the matter.

However, no reply came to be filed by either of the parties and later, the counsel appearing for the plaintiff and the defendant made statements before the court that they did not wish to file any replies. It was submitted that since the plaintiff wanted to withdraw the suit, there was no necessity to file any reply to the impleadment application, which application would be rendered purposeless and infructuous.

In the meantime, the plaintiff pressed the application seeking withdrawal of the suit, arguing that the plaintiff had an unqualified right to withdraw the suit, which right could be asserted by the mere filing of an application seeking withdrawal, and that even permission of the court was not required for such withdrawal.

The Court was of the view that the present case could not be decided based on the scenarios mentioned under various rules of Order XXIII CPC but on the principle that fraud vitiates and nullifies any right to judicial relief.

"The brazenness with which the plaintiff submitted that since he is the "MASTER" of his own suit – dominus litus, as he would argue – the court cannot stop him from withdrawing from the proceedings or abandoning his claim, set the court thinking as to the soundness of this proposition cast by the plaintiff in absolute and audacious terms," the Court observed.

The Court added that if the said submission is accepted, the proposition would imply that the right to legal remedy is an unqualified, unbridled and unguarded right whereby a litigant may file legal proceedings and withdraw or abandon legal proceedings, as and when, the litigant pleases, regardless of the motives, intention and conduct of the litigant.

"Such a right would imply that a court of law is a place where a litigant may approach without much cogitation, with a purported claim, whether bona-fidé or otherwise, substantiated or not, to take a chance and play a gambit; and if found floundering or failing, a litigant could simply walk-away, as a matter of absolute right, without the court having any say whatsoever in the matter. In the opinion of this court, that is not the position," the Court observed.

The Court said that litigating parties cannot be permitted, even by consent, to bring a dishonest claim and to withdraw from it or abandon it when the dishonesty is discovered.

It said that where it appears to the court that what is being played-out before it, even if consensually between apparently opposing parties, is suspect, the court would certainly be entitled to receive material, documents and information from a third party that may be alien to the proceedings as filed, to discover and unravel the mala-fidés or fraud being played-out before it by the litigating parties.

"This would be de rigueur where it appears that the litigating parties are, whether by consent or otherwise, seeking to destroy or negate the rights of a third party that is alien to the particular proceedings," the Court observed.

It added "This court must disabuse the plaintiff of this flawed assumption, in the clearest possible terms. The right to withdraw a suit is not absolute; and certainly no process or procedure of law can be made a tool to perpetuate deceit in a court of law. A court is never powerless to deal with a dishonest litigant."

The Court thus observed prima-facie that the plaintiff and defendant were attempting to obtain directions from High court to fructify what may be an illegal transaction in relation to the sale of the subject property.

Accordingly, while the Court clarified that it was not forming a final opinion as to whether the defendant or the plaintiff, or both, were guilty of having misused or abused the legal process or having played fraud upon the court, the application filed by plaintiff seeking withdrawal of the suit was dismissed.

The Court however allowed the application filed on behalf of M/s Apogee Enterprises seeking impleadment as a party defendant in the matter.

The applications were disposed of accordingly.

Case Title: SH AWANEESH CHANDRA JHA v. ANIL PRASAD NANDA

Citation: 2022 LiveLaw (Del) 601

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