M J Antony: The importance of being clean

OUT OF COURT

Petitioners and their lawyers must make sure that their wily strategies do not leave indelible marks.

It is an old legal maxim that a person approaching the court must come with clean hands. When a transaction is based on fraud, to defeat creditors or evade tax, the court will refuse to grant his prayer. But how serious must be the stain to disentitle him for relief is a moot point in several cases. Will the court condone minor deceptions and suppression of facts? In a recent judgement of the Supreme Court, it discussed this issue, and metaphorically asked, "Even if the dirt is removed and the hands become clean, would the relief sought for be still denied?"

In this appeal against the judgement of the Delhi high court (Arunima Baruah vs Union of India), the issue was the alleged suppression of fact. The Indian Council of Social Welfare terminated an employee. She moved the district court for an injunction, but it refused to grant her prayer. Meanwhile, she also moved the high court with a writ petition, without disclosing that she had earlier knocked at the door of the district court.

When this came to light, the high court rejected her writ petition as she had not approached it with clean hands. According to the high court, she was guilty of "gross concealment of facts" and was doing nothing more than "forum hunting". The Supreme Court took a liberal view of the matter. If the rule is applied strictly, the effect would be to totally shut out the aggrieved person from the court. Access to justice is widely accepted now as a human right and therefore if such a person, although with dirt on her hands, is denied entry to the court it would have serious implications.

Even if she had merit in her case and the grievance was genuine, the court would not be able to examine the facts and do justice. The court has to balance the extent of blemish the person carries and her right to access justice. In this specific case, the Supreme Court appeared to excuse the fault as it was not serious enough to justify the denial of a full hearing. It allowed the party to approach the high court again, disclosing all facts and coming clean, so that the merits of her case could be looked into.

The judgement discussed the delicate question as to what extent the courts could deny relief if the petitioner came with soiled hands. According to it, the suppression of fact, as in the present case, must be of "material facts". What material facts would be would depend on the facts and circumstances of each case.

Material facts would mean material for the purpose of determining the dispute. If the fact suppressed is not material for the case, the court would take a liberal view while exercising its discretion.

The English courts seem to have confronted this dilemma a hundred years ago. Discussing the judgements there, one of the authors said: "The absence of clean hands is of no account unless the depravity, the dirt on the hand in question, has an immediate and necessary relation to the equity sought for." The clean-hand rule cannot properly be regarded as setting out a rule that is either precise or capable of satisfactory operation, according to that authority.

In an earlier case decided by the Supreme Court (SJS Business Enterprises Ltd vs State of Bihar, 2004), the suit was filed in a civil court by one of the directors of a company without the knowledge of another director, who approached the high court, or so it was alleged.

The question arose whether the filing of the suit was a 'material fact' which affected the fate of the writ petition in the high court. The Supreme Court did not think so. Since there are alternative remedies, the exercise of one would not be fatal to the other remedies.

However, if a party has already invoked one remedy unsuccessfully in one court and brings up the same issue in another court, the situation would be different. As a matter of public policy, such legal strategy is not encouraged. The court would not ordinarily permit a party to pursue two parallel remedies in respect of the same subject matter.

Since there are several high courts, tribunals and other quasi-judicial forums these days dealing with special areas of law, these principles are valuable for those who plan out the litigative tactics. Where would they strike luck in the gamble that is called a lawsuit? This is a point which should best be left to the ingenuity of the lawyers.