Musings At Law-II
Court cases are serious business. Particularly, those before a High Court, cannot be treated lightly. They are genuine battles that take place between fiercely contesting parties. The orders passed by the High Court based on the documents and the representations of advocates, are based on recorded ‘facts’, which reflect the ‘truth and reality’, as they ought to be. Advocates or parties dare not play fast with facts, before the High Court. They cannot pull wool over the Court’s eyes. Orders have meaning and substance.
That is a given. No doubt or no exceptions. Right? Sorry, wrong. There could be exceptions. I will share with you a real life litigation, which my Senior shared with me, which makes fascinating reading. As to how the court fell for the representations and orders came to be passed, where the issue or claim got resolved and obtained closure too, despite the ‘truth’ lying elsewhere. Names are taboo, though the matter may relate to most, who are dead and gone, including my Senior. An absolutely stunning tale- yet real- not Jeffrey Archer or John Grisham spun yarn, which demonstrates that Fact is Always Stranger Than Fiction. This is no fiction. That makes it sensational stuff of unimaginable proportions.
It was a simple civil suit for recovery filed by a bank against a borrower, who had a credit line, upon hypothecation of manufactured/traded goods. He had run up dues. The bank obtained an order of injunction restraining the borrower from selling the hypothecated goods. Then, on admission by the borrower of the availability of the goods and value of the hypothecated goods, the bank moved for sale of the same.
The High Court ordered sale and several ‘would be purchasers’, submitted their Bids. As the valuation was available before court, no inspection of the goods took place. The twist begins here. The borrower confessed to his counsel that the hypothecated/injuncted goods from sale, were actually not available. Records however suggested their availability and valuation too, running to several lakhs. How can sale of non-existent goods take place? If the Court became aware of the non-availability of the hypothecated goods the borrower would run the risk of contempt proceedings? If the truth was revealed, offence of perjury may also arise.
The counsel for borrower was a crafty and cunning practitioner. Among the Bidders for purchase was a candidate ‘introduced’ by the borrower, to ensure that borrower himself purchased the hypothecated/injuncted goods, and avoided criminal consequences. It so happened that there was serious Bidding and the borrower’s bidder was forced to enhance his Bid sums, to ultimately clinch the purchase, for a sum close to the actual suit dues itself.
The borrower’s Bidder or rather borrower himself, deposited the purchase price, with the bank. The bank was pleased as punch that a major portion of the suit claim got satisfied and the bank therefore offered to ‘restructure’ the loan of the borrower, duly accounting for the balance of the suit claim. The bank and purchaser walked away as friends in arms.
That is where the story begins, not ends. The borrower and his friendly bidder picked up a financial squabble on ‘settlement’, for the Bidder’s role, for and on behalf of the purchaser. 6/7 months down the line, the Borrower’s Bidder, as ‘purchaser’ of the hypothecated/injuncted stocks, complained to the Court that though he had deposited the purchase price with the bank, the bank failed to make delivery of the stocks. The court ordered notice to the bank and the borrower.
The bank submitted that they had received the purchase price in cash. True. Delivery of the stocks was not their concern as it was for the borrower to deliver it. The borrower said that they had ‘delivered’ the stocks. The fact that the complaint was made 6/7 months belatedly, without any complaint in between, was proof of the blackmail attempt by the purchaser, who was trying to make use of the absence of a formal ‘Delivery Letter’. The Court accepted the case of the borrower and dismissed the petition as belated and lacking in bonafides. Truth was never told to the court. Reliance was on proof alone.
The ‘purchaser’ did not take things lying down. The ‘financial deal’ between the borrower and his Bidder was not sorted out, and hence got escalated in appeal. In appeal, the learned judges took serious notice of the conduct of the Bank. They said- The goods were hypothecated to the bank. Bank had obtained injunction from sale. Bank moved for the sale. Bank admitted receipt of money. If so, where was the proof of delivery of stocks? Bank cannot escape accountability or responsibility. The senior judge refused to impose any obligation on the borrower, for the bank had admitted receipt of money and had the benefit of the sale.
The judges insisted that bank must sort out the matter with the purchaser or refund the entire sum of money to the purchaser. Bank did not know what hit them. They beseeched the Court to summon the borrower, to seek clarification, as the borrower was in physical possession of the hypothecated/injuncted goods under lock and key. The court agreed to issue notice to the borrower.
The borrower’s counsel happened to be my Senior. He said he was at his persuasive best on the 6/7 month delay and the excellent manner in which the single judge had concluded that absence of a formal ‘delivery note’ was being exploited by the purchaser to make a fortune. Upon reading the detailed order, for the first time, recording full satisfaction of delivery which was followed by payment of lakhs in money to bank, the judges turned around and asked the purchaser to come forward, with an affidavit on his antecedents.
The tide turned completely and the ‘purchaser’ was asked to provide evidence of the basis of his income, for the purchase of stocks worth lakhs, and proof of his being assessed to Income Tax and so on. Unable to face the ire of the learned judges and knowing that he could not continue his bluster on alleged non delivery and possibly facing the wrath of the Court, the purchaser quietly withdrew his appeal, profusely apologising to the Court that he had in fact obtained delivery, but to settle scores with the borrower, for some other transaction, he had wrongly built a story of non delivery. Even now, the truth and facts were never brought to the notice of the High Court.
Satisfied that the court got a quick closure of an appeal without need to pass detailed orders, the matter was dismissed as withdrawn.
Alas, the moral of the story. It is rather queer and unimaginable to not to take the orders of a court on face value. Not to trust what you see on paper. The records may lie. Even a court of law can be taken for a royal ride, as they trust/believe the records, to reflect the truth/reality, little realising that advocates/clients may be representing fake stories, to fix facts of convenience. In these Coronavirus times, that this is not a fictional tale, but a real life litigation, is a little too scary, to be believed as true. Next time, you read the orders of a court of law, including the High Court or Supreme Court, if you wonder whether it was founded on #FakeNews, you would be entitled to be forgiven. False. No, True.