Specific relief act, Study notes of Civil Law

Download Specific relief act and more Study notes Civil Law in PDF only on Docsity! Electronic copy available at: http://ssrn.com/abstract=1645411 Equity, Common law and its Appliance in India: a Study --- By Vivek Jain B.B.A.LL.B. (Hons.), III Semester National Law University, Orissa 1. Introduction “The system of equity includes that portion of natural justice which is judicially enforceable but which for various reasons was not enforced by the courts of common law.” 1 “EQUITY is that system of justice which was developed in and administered by the high court of chancery in England in the exercise of its extraordinary jurisdiction. This definition is rather suggestive than precise; and invites inquiry rather than answers it. EQUITY, in its technical and scientific legal sense, means neither natural justice nor even all that portion of natural justice which is susceptible of being judicially enforced. It has, when employed in the language of English law, a precise, definition and limited signification, and is used to denote system of justice which was administered in particular court – the nature and extent of which system cannot be defined in a single sentence, but can be understood and explained only by studying the history of that court, and the principles upon which it acts. In order to begin to understand what equity is, it is necessary to understand what the English high court of chancery was, and how it came to exercise what is known as its extraordinary jurisdiction. Every true definition of equity must, therefore, be, to a greater or lesser extent, a history.” 2 “In its technical sense, equity may be defined as a portion of natural justice which, although of a nature more suitable for judicial enforcement, was for historical reasons not enforced by the common law courts, an omission which was supplied by the court of chancery. In short, the whole distinction between equity and law is not so much as a matter of substance or principle as of form and history.” 3 1 Historical Outlines of Equity, http://www.unlockingthelaw.co.uk/samples/trusts_ch01.pdf . 2 George T. Bispham, The principle of Equity vol. 1-2(Joseph D. McCoy 11th ed. 1931). 3 R.E. Megarry, Snell‟s Principles of Equity vol. 2(23rd ed. 1947). Electronic copy available at: http://ssrn.com/abstract=1645411 2.1 Origin and Development of Equity: Equity is that system of justice which was administered by the High Court of Chancery in England in the exercise of its extraordinary jurisdiction. ... Every true definition of equity must, therefore, be, to a greater or less extent, a history. Bispham, Principles of Equity, at 1, 2. “Prior to William the conqueror, there were the old Anglo-Saxon courts. They used to sit in the open air meetings of freeman. Slowly these folk courts were replaced by itinerant justices appointed by the crown or by the king‟s court (curia Regis). William the conqueror made several changes and appointed a chief judiciary to preside over the trials of suits. This led to the origin of common law tribunals throughout the England. The hardship caused by the king was removed by the „Magna Carta‟ which provided that „the common pleas shall no longer follow the king „. Through this charter disputes‟ regarding lands, and other civil matters known as common pleas was established at Westminster. During the period the judicial officials became the Court of Exchequer and officials were related to the cases of revenues and later enlarged through the use of legal fictions. Slowly the chancellor presiding over the Court of Exchequer became personal advisor and representative of the crown. The court continued its process until new act came into the force on 2 nd November 1875, consolidating it into the “supreme court of judicature” 4 “Two distinct systems of law were administered by different tribunals at the same time in England till the year 1875. The older system was the common law and it was administered by the King‟s Benches. The more modern body of legal doctrine developed and administered by the chancellor in the court of chancery as supplementary to and coercive of the old law was the law of Equity. The two systems of law, as mentioned above, were by and large identical and in harmony leading to the maxims that „equity follows the law’. In other words, the rules already established in the old Courts were adopted by the Chancellor and incorporated into the systems of equity, unless there was some sufficient reason for their rejection or modification. In case of conflict, the rule of Chancery prevailed, because if a common law action was 4 C.M RAO, law of injunctions(Delhi: University Law Publishing Co. Pvt. Lt, 2007),445-667 2.5 Growth of Equity “A dual system of rights and interests, namely – legal and equitable, came to the fore due to the double system of the administration of justice in England before the Judicature Act, 1873 – 1875.” 9 a) Why was equity important in the development of English law? Equity was important in the development of English law because it resolved some of the defects of the common law, which might otherwise have led to a loss of public confidence in the legal system - since the hallmark of a civilized society is a proper legal system. 10 As these Chancellors had no formal legal training, and were not guided by precedent, their decisions were often widely diverse. However, in 1529 a lawyer, Sir Thomas More, was appointed as Chancellor, marking the beginning of a new era. After this time, all future Chancellors were lawyers, and from around 1557 onwards, records of proceedings in the Courts of Chancery were kept, leading to the development of a number of equitable doctrines. Criticisms continued in the court. b) Evils of the Common Law The inflexibility of the writ system, and the consequent expense - if a writ had a minor drafting error, it would be thrown out, for example, in Pinnel's Case, 11 where Pinnel won as a result of Cole's drafting error, even though Cole was legally in the right.  Many cases were lost on technicalities.  The common law did not allow oral evidence.  There was no power of enforcement.  If a person had a debt by way of a bond and if pay the debt, but neglected to have the bond cancelled, the common law courts would force them to pay it again.  It was easy to avoid the consequences of one's actions.  The wager of law system was unfair.  There was no recognition of trusts.  The common law did not recognize security for loans (mortgages) or rights of third parties in general. 9 Karnwal Megha, “Law of Equity”. http://jurisonline.in/2008/11/law-of-equity/. 10 http://members.lycos.co.uk/lawnet/EQUITY.HTM 11 (1602) 5 Co Rep 117a  If damages were not appropriate (e.g., trespass), then the common law remedy did not provide an adequate remedy. c) Important Developments in Equity  As a result of the inadequacies of the common law courts, people petitioned the King through his Chancellor. This developed into a full legal system, and the Chancellor, as petitions increased, set up the Court of Chancery (1474), the rules of which became equity.  The Earl of Oxford's Case 1615 12 , which decided that if equity and the common law were in conflict, equity would prevail (codified in the Judicature Act 1873 and currently contained in the Supreme Court Act 1981).  In the mid-19 th century, the procedure of the Court of Chancery (discovery of documents and injunctions) was made available in the common law courts.  At the same time the Court of Chancery was given the power to determine matters of common law, use juries, award damages, and receive oral evidence.  The Judicature Acts 1873-5 merged the equity and common law courts - previously it had been necessary to start parallel actions in separate courts. d) Advantages of Equity over the Common Law The Court of Chancery succeeded in stopping unconscionable writs through the injunction, by which the common law claimant was restrained from continuing his action. If the claimant defied the order he would be imprisoned for contempt. It was said that there existed two legal systems - one to do injustice, and the other stop it, and that equity was the conscience of the law. “Equity in U.S. law can be traced to England, where it began as a response to the rigid procedures of England's law courts. Through the thirteenth and fourteenth centuries, the judges in England's courts developed the common law, a system of accepting and deciding cases based on principles of law shaped and developed in preceding cases. Pleading became quite intricate, and only certain causes of action qualified for legal redress. Aggrieved citizens found that otherwise valid complaints were being dismissed for failure to comply 12 [1615]1. Chan. Rep. 5-16 in English Reports, vol. 21,485-489. with pleading technicalities. If a complaint was not dismissed, relief was often denied based on little more than the lack of a controlling statute or precedent. Frustrated plaintiffs turned to the king, who referred these extraordinary requests for relief to a royal court called the Chancery. The Chancery was headed by a chancellor who possessed the power to settle disputes and order relief according to his conscience. The decisions of a chancellor were made without regard for the common law, and they became the basis for the law of equity. 13 2.6 Remedies Discovered by the Chancellors The Chancellor developed new remedies that were able to compensate plaintiffs more fully than the Common Law remedy of damages. 1) Injunction 2) Specific performance 3) Account of profits 4) Rescission 5) Declaratory relief 6) Rectification 7) Estoppels 8) Certain proprietary remedies, such as constructive trusts or tracing 9) Subrogation 10) In very specific circumstances, an equitable lien There were four main remedies known as injunctions, specific performance, rescission and rectification. Injunction was a court order that asked a person to do or refrain from doing something. Specific performance was an order that a contract should be carried out as agreed. Rescission was where the parties are returned as far as possible to their pre-contract position. Rectification was where the court will order that a document should be altered to reflect the parties' intentions. There were also two other remedies known as trusts and mortgages. An account of profits is usually ordered where payment of damages would still leave the wrongdoer unjustly enriched at the expense of the wronged party. 13 Black's Law Dictionary,8th ed. edited by GARNER BRYAN A. (USA: west publishing co, 2005), 579-580 Wroth v. Tyler, 19 specific performance was refused, since it would have forced Tyler to sue his own wife. Equitable damages were awarded instead, in lieu of specific performance. Patel v. Ali, 20 specific performance was refused, since to grant the decree would have evicted a defendant whose leg had been amputated through bone cancer and had given birth to two children, and would have caused great hardship if the defendant had had to move away from her relatives 8. Where the equities are equal, the first in time prevails Where two persons have conflicting interests in the same property, the rule is that the first in time has priority at law and in equity: qui prior est tempore potior est jure. – In the absence of a legal estate in the matter and the contest is among the equitable estate only, the rule is that the person whose equity attached to the property first will be entitled to priority over other or others e.g., if A enters into a contract for the sale of his house with B and then with C, the interest of B and C both being equitable, B will have priority over C because his attached to the property first. 9. Vigilantibus, non dormientibus jura subvenient Delay defeats equity (equity aids the vigilant and not the indolent) Where a party has slept on his rights and has given the defendant the impression that he has waived his rights, the court of equity may refuse its assistance to the claimant. This is known as the doctrine of laches. 10. Equity looks at the intent rather than the form The court looks at the substance of an arrangement rather than its appearance in order to ascertain the intention of the parties. For example, a deed is not treated in equity as a substitute for consideration. 20 [1984] 1 All ER 978 11. Equity imputes an intention to fulfill an obligation The principle here is based on the premise that if a party is under an obligation to perform an act and he performs an alternative but similar act, equity assumes that the second act was done with the intention of fulfilling the obligation. 12. Equity regards as done that which ought to be done If a person is under an obligation to perform an act which is specifically enforceable, the parties acquire the same rights and liabilities in equity as though the act had been performed. 13. Equity acts in personam Originally, equitable orders were enforced against the person of the defendant, with the ultimate sanction of imprisonment. A later equitable invention permitted an order to be attached to the defendant‟s property, i.e. in rem. Today this maxim has lost much of its importance.” 21 21 Historical Outlines of Equity, http://www.unlockingthelaw.co.uk/samples/trusts_ch01.pdf . 4.1 Equity in Indian Legal System “Most of the equitable principles and rules have, in India, been embodied in the statute law and has been made applicable to the extent of the provisions made therein. The provisions of equity in Indian statute books might have their source in common law or in equity or in an adjustment between the two, is immaterial. Statutory recognitions of the principles of equity are found in: A. The Indian Contract Act, 1872; B. The Specific Relief Act, 1877;22 C. The Indian Trust act, 1882;23 D. The Transfer of Property Act, 1882;24 and E. The Indian Succession Act, 1925. “The point primarily relates to the section 28 25 of the Indian contract act 1872. The subject is of great importance from the point of view of economic justice, avoidance of hardship to consumers and certainly and symmetry of the law. The equitable doctrines featuring in the Indian Contract Act are mainly, the doctrine of penalties and forfeiture, stipulations as to time in a contract, equitable relief on the ground of misrepresentation, fraud and undue influence. In a case which went to the Supreme Court, a clause in an insurance policy provided that all the benefits under the insurance policy shall be forfeited if the suit was not brought within the specified period 26 , the clause was held to be valid.” 27 “Trust and trustees is a concurrent subject [Entry 10 of List III of Seventh Schedule to Constitution]. Thus, the Act will apply all over India except when specifically amended / altered by any State Government. 22 An Act to define and amend the law relating to certain kinds of Specific Reliefs. 23 The Indian Trusts Act was passed in 1882 to define law relating to private trusts and trustees. A trust is not a 'legal person'. Property of trust is held in name of trustee for benefit of beneficiary. 24 (4 of 1882) 17th February, 1882 An Act to amend the law relating to the Transfer of Property by act of Parties. 25 Every agreement,— (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or (b) Which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent?] 26 Vulcan insurance co. v. Maharaj singh, AIR 1976 S.C., pages 287-294 27Justice KK Mathew. “Section 28, Indian Contract Act, 1878 Prescriptive clause in contracts.” Law Commission of India Ninety-Seventh Report, (March 1984), http://lawcommissionofindia.nic.in/51- 100/Report97.pdf. with the criminal courts in India except with the High Courts in terms of Section 482 42 of the Code of Criminal Procedure, 1973 43 . Further, such inherent powers are vested in the Supreme Court of India in terms of Article 142 44 of the Constitution of India which confers wide powers on the Supreme Court to pass orders „as is necessary for doing complete justice in any cause of matter pending before it “In the matter of rules of procedure and practice, though the utmost respect should be paid to the wisdom and authority of the English courts, yet courts in India are by no means bound to adopt such rules which the equity courts in England may had established 45 Edge CJ, says: The condition of domestic life in the two countries have from remote times been essentially different and, in my opinion , it is owing to the difference in conditions of domestic life alone that a custom which appears to me to be perfectly reasonable one in INDIA should be unknown in England 46 Woodroffe says: Not only may there be in India rights to be protected which are unknown to English law , 47 but interests of which it does take cognizance , may here require protection by injunction, or otherwise, in a set of circumstances in which it is not necessary to grant relief in England, or the converse may be the case 48 Thus according to the usages obtaining in certain places in India, the right of privacy is recognized and injunctions are issued to protect the right of privacy. The rule of English law is different from that. 49 42Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice. 43 An Act to consolidate and amend the law relating to Criminal Procedure. 44 Enforcement of decrees and orders of Supreme Court and unless as to discovery, etc ( 1 ) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe (2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself 45 Woodroffe‟s dutt v Watson co Venkatacharyulu v. Rangacharyulu (1890) 1 M.L.J. 85: I.L.R. 14 46 Gokal Prasad v Radho (1888) I.L.R. 10 Allahabad 358 47 Manishankar hargovan v trikam narsi (1867) 5 B.H.C.B. 48 Woodroff‟s law of injunction 49 Turner v Spooner (1861) 30 LJ Ch 801, 803) English rules and decision to the relation which existed between the court of chancery and the courts of common law in England were very different from those between the high court‟s and mofussils courts in India 50 as they were also the respective powers and functions of these courts. In India, in view of its large cultural diversity, and for various social circumstances, different factual circumstances may warrant circumstances for protection. The broad principles of the English decisions may apply, particularly those based on equity, though the ratio itself may not act as a binding precedent” 51 50 Moran v river steam navigation [1964] S.C.R. 333 51 C.M RAO, law of injunctions(Delhi: University Law Publishing Co. Pvt. Lt, 2007),445-667 5. Conclusion The scope of this paper was to trace the history and development of equity and also its current relevance primarily for Indian legal system. It seeks to specifically determine the reasons if any, for the failure of the common law courts in bringing about social change and suggests certain important methods of overcoming the impediments. Changing attitudes of people towards common law which led to the formation of the law of equity where king would prescribed over the matters, in the cases where plaintiff were not satisfied with the decision given to them. In doing so this paper examines the origin, development and its application and relevance in Indian legal system. In India too certain laws has derived like Transfer of Property Act and more which had a reasonable effect in the working of Indian legal system. Finally and most importantly, by way of examining the development of equity, this paper seeks to demonstrate the principle that any development in any legal system which seeks to bring a change to the social values can be a success only if socio economic cultural situation in the society is made conducive for the operation of the law i.e. the law in isolation can never be successful in bringing about a social change unless backed by various socio economic and cultural factors. Bibliography  George T. Bispham, The principle of Equity vol. 1-2(Joseph D. McCoy 11th ed. 1931).