The Supreme Court has reiterated a fundamental principle of equity: a litigant who approaches the court without candour cannot expect the court’s discretionary relief.
Dismissing a suit seeking specific performance of an agreement to sell, the Court held that a party who suppresses material facts or crucial documents forfeits the right to equitable relief. The ruling stressed that honesty in presenting the full factual picture is essential when seeking the court’s intervention in enforcing contractual obligations.
The bench observed that in disputes involving specific performance, the conduct of the parties plays a decisive role. Courts closely examine whether the agreement was entered into genuinely and whether either side attempted to manipulate the narrative by withholding key details.
According to the Court, even a slight suspicion regarding the plaintiff’s bona fides—particularly where important facts related to the transaction are concealed—can justify denying the discretionary relief of specific performance.
The case arose from a dispute where the appellant sought enforcement of an agreement to sell property. However, it emerged that the plaintiff had failed to disclose the existence of a memorandum of understanding (MoU) executed between the parties.
The opposing side argued that the MoU revealed the true nature of the transaction: the agreement to sell was not meant to transfer property but merely served as security for a loan advanced by the plaintiff. By keeping the MoU out of the pleadings and the narrative placed before the court, the plaintiff attempted to portray the arrangement as a genuine sale agreement.
The Supreme Court found merit in this argument. It noted that the MoU was a crucial document for determining the real character of the transaction. The plaintiff’s failure to disclose it cast serious doubt on the credibility of the claim.
The Court therefore endorsed the High Court’s decision, which had overturned the trial court’s decree granting specific performance. The High Court had concluded that the concealment of the MoU demonstrated that the plaintiff had not approached the court with clean hands.
Affirming that view, the Supreme Court held that withholding such a material document justified refusal of the equitable remedy. With no reason to interfere with the High Court’s findings, the appeal was dismissed.
