Such Litigants Have No Place In Court: Supreme Court Imposes Rs. 10 Lakh Fine On Litigant Company For Suppression of Facts

The Supreme Court on Friday (September 27) came down heavily on a litigant for suppressing material facts in its two appeals and filing affidavits that sought to justify such suppression.

A bench of Justice Abhay S Oka and Justice Augustine George Masih imposed a fine of Rs. 5 lakhs in each case on the litigant company, who has filed the SLPs challenging orders of the National Company Law Appellate Tribunal.

The Court in its order noted that the appellants had suppressed material facts in both appeals and had adopted an “adventurous approach” by filing a 19-page affidavit and annexing 300 pages of documents. The affidavit, meant to explain the appellant's conduct, instead fully justified the suppression of facts, the Court stated.

“Though we are of clear view that there is suppression of material facts, by filing an affidavit the conduct of suppression of facts has been fully justified. Normally such litigants have no place before the court of law. Only in view of the fact that these appeals are statutory appeals, we make it clear that unless the appellants deposit sum of Rs. 5 lakhs as costs each with the National Legal Services Authority, the appeals will not be heard. The appellant should not be under the impression that the appeal will be heard after the deposit cost amount. We will examine their conduct, if they fail to take reasonable stand before the court”, the Court stated in the order.

During the hearing, the counsel for the appellants said that the judges are being known for their “righteous indignation,” to which Justice Oka responded, “You may assign any adjective to me, I am least bothered. You may say I am a bad judge, harsh judge, I am least bothered. I have been here for 20 years and seen worse allegations.”

Justice Oka continued by criticizing the litigant for filing an affidavit of over 300 pages and using the opportunity to make accusations against the respondents instead of explaining its own conduct. “Utter abuse of process of law. You use the opportunity to make allegations against the respondent when you are supposed to explain your conduct. You have said that there is no suppression. We will not tolerate such litigants at all. What kind of affidavits are being filed?” he remarked.

He stressed that litigants must bear the consequences if their lawyer files such affidavits and added, “Litigants must suffer if they engage a lawyer who files such an affidavit. And this affidavit is on instructions. Such litigants have no place in the court. Such litigants should be remediless. Someday we must come down heavily. All sorts of petitions are filled in this court, all sorts of arguments are made and petitioners get away with it.”

Justice Oka also expressed frustration with the increasing number of false statements made before the court. “Signal has to be sent very strongly. Day in, day out false statements are made. What is happening, we don't know Last time itself we should have dismissed this due to suppression.”

When senior advocate Dama Sheshadri Naidu for the appellant sought a reduction in costs, saying that his client was “broke,” Justice Oka responded, “Personally, left to myself, I would have followed the standard followed by the Bombay High Court Original Side. It would have been 50 lakhs each.”

“Mr. Naidu, cost should be consistent with the status of counsel appearing, and these costs are not consistent”, Justice Oka added.

The Court remarked that normally such litigants would have no place before the court, but since these were statutory appeals, the court would still hear them. However, he warned that unless the appellants deposited Rs. 5 lakhs each with the National Legal Services Authority, their appeals would not proceed. He further cautioned the appellants not to assume that merely paying the costs would guarantee that their appeals would be heard, as their conduct would still be scrutinized.

This is not the first time the Supreme Court has expressed concerns over the suppression of facts.

On June 25, a vacation bench, also presided over by Justice Oka, imposed a fine of Rs. 25,000 on petitioners in a case involving the All India EPF Staff Federation, who had suppressed a May 3 order of the Delhi High Court while filing a Special Leave Petition. Justice Oka had warned that the court would “come down heavily” on litigants who suppressed material facts and that such behaviour created unnecessary work for the judges, who had to manually verify facts from the High Court websites.

In another instance, on September 9, the Court dismissed an SLP and imposed a cost of Rs. 10,000 on a life convict who had sought remission while suppressing relevant facts.

Mr. Gopal Jain, Senior Advocate along with Raunak Dhillon, partner and Nihaad Dewan, senior associate from Cyril Amarchand Mangaldas appeared for Respondent No. 2 / COC

Case no. – Diary No. 23764/2024 and Diary no. 23776/2024

Case Title – Shristi Infrastructure Development Corporation Limited v. Avishek Gupta

Citation : 2024 LiveLaw (SC) 767

Click Here To Read/Download Order