New Delhi, Feb 13 (PTI) The Supreme Court on Thursday pulled up a private firm for “forum shopping” in a case related to the construction of a five-star hotel in South Delhi and said litigants must come to court with clean hands to claim equity.
“Forum shopping” is a term popularly used for the practice of litigants taking actions to have their case heard in a particular court which they believe is most likely to provide a favourable judgment.
A bench of Justices Surya Kant and Ujjal Bhuyan brought the curtains down in the three-decade old dispute arising out of contractual obligations for construction of the hotel, conceptualised by the Ministry of Urban Development in 1990 at Andrews Ganj in South Delhi.
The bench directed the Housing and Urban Development Corporation Limited (HUDCO) to refund over Rs 28 crore to the firm, but refused to grant it a 16 per cent interest for attempting to hoodwink the judicial process.
The bench held HUDCO was in breach of several obligations as contemplated in the allotment letter, which include the failure to execute documents for securing approval under different statutes; failure to execute the sub lease agreement in favour of the appellant (private company) and failure to secure the approval of the revised layout plan for the construction of the hotel.
“We find the instant case to be fit to justify a deviation from the established standards…though we have held HUDCO to be in breach of several contractual obligations, the conduct of the appellant is rife with instances where it has also sought to undermine the authority and integrity of the judicial process, by treating the court with disregard, and attempting to exploit procedural mechanisms for personal gain,” it said and held it was not entitled to the interest under Section 34 of Civil Procedure Code.
Justice Surya Kant, who authored the verdict, said, “It needs no emphasis that whosoever comes to the court claiming equity, must come with clean hands.” The judge went on, “We have no hesitation in holding that such conduct was nothing short of a brazen attempt at forum shopping, as the appellant wanted to avoid the jurisdiction of the high court before whom they had failed to prove their bona fides by not depositing the stipulated sum. Such demeanour not only raises grave suspicions on the appellant’s propriety, but also amounts to sheer abuse of the process of law and a waste of precious judicial time.” The judge quoted the legal legal maxim “he who seeks equity must do equity” as saying, “A court of law cannot be the abettor of inequity by siding with the party approaching it with unclean hands.” The verdict further said, “The material on record sufficiently indicates that the appellant did not approach the court with clean hands and instead attempted to hoodwink the judicial process by creating a facade to subterfuge their inability to meet their contractual obligations. We are constrained to observe that the intent of the appellant throughout appears to be that of prolonging the litigation to cloak its impecuniousness.” The top court observed the private firm, which initially moved the Delhi High Court for a permanent injunction to restrain HUDCO from cancelling the allotment and extension of dates for payments of installments, later withdrew its suit on the ground that a civil suit was filed in a Tis Hazari Court on the basis of a fresh cause of action.
Even in the second suit in Tis Hazari Court, said the court, upon an objection raised by the Centre, the private company abandoned the relief of possession of the suit land to avoid payment of ad-valorem (proportionate) court fees.
“This again casts serious aspersions on the bona fides and financial capabilities of the appellant,” it added. Observing an “oblique motive”, the court said the appellant did not want to take a chance before the high court whose order they had failed to comply with.
“The appellant thus withdrew the first suit unconditionally even without the liberty to file a fresh one, ostensibly with a calculated mindset,” it added.
The Ministry of Urban Development had in 1990 decided to develop an area of 71 acre of land located at Andrews Ganj, through HUDCO and bids were invited for the project which includes construction of a 5-star hotel alongwith an already built car park, nine guest houses blocks, nine restaurants, 25 shops and shopping arcade beside other amenities.
On October 31, 1994, the private firm was given an allotment letter for construction of the hotel but soon after the payment of the first installment by it, a dispute over fulfilment of contractual obligations by HUDCO arose. PTI MNL AMK
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