TMI Blog2007 (8) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court as also equitable remedy from this Court under article 136 of the Constitution. A party, whose hands are soiled, cannot hold the writ of the Court. Thus the High Court was not in error in refusing relief to the appellant-company. - CIVIL APPEAL NO. 3827 OF 2007 - - - Dated:- 20-8-2007 - C.K. THAKKER AND ALTAMAS KABIR, JJ. Sakesh Kumar, Ms. Yogmaya Agnihotri and Rameshwar Prasad Goyal for the Appellant. Rajiv Kapur, Sanjay Kapur, Shubhra Kapur and Ms. Arti Singh for the Respondent. JUDGMENT C.K. Thakker, J. - Leave granted. 2. The present appeal is directed against the judgment and order dated 29-3-2005 passed by the High Court of Uttaranchal at Nainital in Writ Petition No. 293 of 2005 by which the petition filed by the petitioner (present appellant) was dismissed in limine. 3. To appreciate the controversy, few relevant facts may be noted. 4. Appellant herein is a Private Limited Company engaged in manufacturing bulbs, chokes and fittings. The factory of the appellant is situated at Dhalwala Industrial Area, Rajpur Road, Dehradun, Uttaranchal. In 1992, the appellant obtained a loan of Rs. 85 lakhs from State Bank of India, Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Act. 5. It may be stated at this stage that it is the case of the respondent-Bank that it had not received any such representation said to have been sent by the appellant on 20-10-2004. According to the appellant-company, without considering the representation of the appellant, dated 20-10-2004, the respondent-bank in purported exercise of the power under sub-section (4) of section 13 of the Act, threatened the appellant to take over residential premises of the Directors of the appellant-company by a communication, dated 8-2-2005. On 19-3-2005, the respondent-bank issued a notice to take over possession of the residential house of the Director. Being aggrieved by all these illegal actions and dispossession-notice , the appellant approached the High Court of Uttaranchal at Nainital on 24-3-2005 by invoking writ jurisdiction of the Court under article 226 of the Constitution. The High Court, however, dismissed the petition in limine on 29-3-2005 which constrained the company to challenge the action of the respondent-bank in this Court under article 136 of the Constitution. 6. It appears that a mention was made to the Court on 28-4-2005 and the Court ordered Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel for the respondent-bank, on the other hand, supported the action taken by the bank and the order passed by the High Court. It was stated that there was suppression of material facts by the appellant and it has not come with clean hands. Only on that preliminary ground, this Court may decline to hear the appellant and may refuse to enter into merits. It was also submitted that no representation dated 20-10-2004 said to have been made by the appellant had been received by the respondent-bank. According to the counsel, it was an after-thought and only with a view to take benefit of observations in Mardia Chemicals Ltd. s case ( supra ) such a case had been put forward by the appellant-company. Grievance was also raised that apart from failure to pay regular instalments, the appellant-company has not complied with the order passed by this Court. This is, therefore, not a fit case to exercise discretionary jurisdiction in favour of the company and the appeal deserves to be dismissed. 10. Having considered the rival contentions of the parties and going through the records and proceedings of the case, in our view, no case has been made out by the appellant-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant-company. The said fact was pressed in service by the respondent-bank at the time of subsequent hearing of the case and was reflected in the order dated 24-10-2004 extracted hereinabove. It was only thereafter that a rejoinder affidavit was filed on 5-11-2005 in which it was asserted by the company that the representation dated 20-10-2004 was made and was sent through courier "First Flight Couriers Ltd." a reputed courier company having its office at 414-415, 2nd Floor, Sahara Trade Centre, Faizabad Road, Lucknow. Thus, there is a word against word. Moreover, this Court cannot be oblivious of the fact that it was only after the order dated 24-10-2005 passed by this Court that in rejoinder-affidavit filed in November, 2005, such a statement was made. The respondent-bank, in the circumstances appears to be right in contending that in spite of notice issued under section 13(2) of the Act, neither payment was made nor a representation was submitted by the company and only with a view to take benefit of Mardia Chemicals Ltd. s case ( supra ), as an afterthought it was alleged that in pursuance of notice issued by the respondent-bank under sub-section (2) of section 13 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured debtors in general in conducting the affairs in a manner that they may not be found defaulting and being made liable for the unsavoury steps contained under sub-section (4) of section 13. At the same time, more importantly we must make it clear unequivocally that communication of the reasons for not accepting the objections taken by the secured borrower may not be taken to give occasion to resort to such proceedings which are not permissible under the provisions of the Act. But communication of reasons not to accept the objections of the borrower, would certainly be for the purpose of his knowledge which would be a step forward towards his right to know as to why his objections have not been accepted by the secured creditor who intends to resort to harsh steps of taking over the management/business of viz., secured assets without intervention of the court. Such person in respect of whom steps under section 13(4) of the Act are likely to be taken cannot be denied the right to know the reason of non-acceptance and of his objections. It is true, as per the provisions under the Act, he may not be entitled to challenge the reasons communicated or the likely action of the secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower : Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A." 16. The submission of the learned counsel for the respondent-bank appears to be well-founded that taking clue from the decision in Mardia Chemicals Ltd. s case ( supra ), the appellant-company, as an afterthought alleged that it had made a representation in pursuance of notice issued the respondent-bank under section 13(2) of the Act. 17. But, there is an additional factor also as to why we should not exercise discretionary and equitable jurisdiction in favour of the appellant. It is contended by the learned counsel for the respondent-bank that having obtained interim order and benefit thereunder from this Court, the appellant-bank has not paid even a pie. The appellant is thus in contempt of the said order. The Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the respondent-bank is right that such appellant does not deserve sympathy from the Court. 21. An order passed by a competent court-interim or final has to be obeyed without any reservation. If such order is disobeyed or not complied with, the Court may refuse the party violating such order to hear him on merits. We are not unmindful of the situation that refusal to hear a party to the proceeding on merits is a drastic step and such a serious penalty should not be imposed on him except in grave and extraordinary situations, but some time such an action is needed in the larger interest of justice when a party obtaining interim relief intentionally and deliberately flouts such order by not abiding the terms and conditions on which a relief is granted by the Court in his favour. 22. In the leading case of Hadkinson v. Hadkinson [1952] 2 All ER 567, the custody of a child was given to the mother by an interim order of the Court, but she was directed not to remove the child out of jurisdiction of the Court without the prior permission of the Court. In spite of the order, the mother removed the child to Australia without prior permission of the Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put the principle succinctly in the following words : ". . . I desire expressly to limit my judgment to a case in which the [party in contempt] is saying that the order complained of is outside the jurisdiction of the court, as distinguished from the case of an order which, although it is within the jurisdiction of the court, ought not, it is said, to have been made." 27. Lord Denning made the following pertinent observations in Hadkinson s case ( supra ) : "It is a strong thing for a court to refuse to hear a party to a cause and it is only to be justified by grave considerations of public policy. It is step which a court will only take when the contempt itself impedes the course of justice and there is no other effective means of securing his compliance." 28. There is still one more reason why the appellant-company should be denied equitable relief under article 136 of the Constitution. According the respondent-bank, the appellant has not come with clean hands before the Bank. It has suppressed and concealed material facts from the Court. 29. It is not in dispute that when the loan was taken by the appellant-company from the respondent-bank, certain immovable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 33. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income-tax Commissioners [1917] 1 KB 486, in the following words : "It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the material facts facts, not law. He must not misstate the law if he can help it the Court is supposed to know the law. But it knows nothing about the facts , and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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