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BRIJESH MALIK v. INDUSIND BANK
Factual and Procedural Background
The complainant, Brijesh Malik, maintained a Savings Bank Account with IndusInd Bank's Nehru Place Branch. On 14.01.2023, the account held a credit balance of Rs. 7,61,011/-. On 15.01.2023, between 12:15 pm and 12:57 pm, the complainant received SMS alerts indicating that three beneficiaries were added to his account. Upon noticing suspicious activity, he contacted the bank’s helpline and requested a debit freeze, which was effected by 12:57 pm. Despite this, between 12:48 pm and 12:56 pm, six unauthorized IMPS transactions amounting to Rs. 5,49,997/- were debited from his account. The complainant lodged a complaint with the Cyber Cell of Delhi Police and later with the bank, seeking reimbursement of the unauthorized withdrawals. The bank rejected the claim, stating the transactions were made through mobile banking linked to the complainant’s account, thereby denying liability and allegedly violating RBI guidelines.
Subsequently, the complainant filed a complaint in August 2023 before the District Consumer Disputes Redressal Forum seeking refund of the unauthorized amount with interest, compensation for mental harassment, and litigation costs. Despite several follow-ups, the bank did not initially refund the amount. During proceedings, the bank informed the Forum that it had refunded Rs. 4,12,498/- in compliance with a Banking Ombudsman order, and additional amounts were refunded by other beneficiary banks, totaling Rs. 5,37,498/-.
The complainant was found to have willfully concealed receipt of these remittances from the Forum during multiple hearings over almost a year. The Forum took serious exception to this concealment, viewing it as an abuse of the judicial process.
Legal Issues Presented
- Whether the complainant was entitled to refund of the unauthorized debited amount from the bank.
- Whether the complainant’s concealment of receipt of partial refunds from the bank and other banks amounted to approaching the court with unclean hands, thereby disentitling him to relief.
- The applicability and effect of the Doctrine of Clean Hands in consumer dispute proceedings involving allegations of fraud and deficiency of service by a bank.
Arguments of the Parties
Complainant's Arguments
- Alleged hacking and fraudulent transactions occurred on 15.01.2023 resulting in unauthorized debits of Rs. 5,49,997/-.
- Bank was negligent and incompetent in preventing fraud despite timely reporting and request for debit freeze.
- Bank violated RBI circular by refusing to refund the disputed amount.
- Claimed mental harassment and sought compensation and litigation costs.
Opposite Party's (Bank's) Arguments
- Transactions were carried out through mobile banking linked to complainant’s account, implying complainant’s responsibility.
- Bank complied with the Banking Ombudsman order by refunding 75% of the disputed amount (Rs. 4,12,498/-) and other banks refunded additional sums, totaling Rs. 5,37,498/-.
- Contended that the complainant’s complaint lacked cause of action due to partial refunds already made.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ramjas Foundation Vs Union of India (2010) 14 SCC 38 | Doctrine of Clean Hands requiring full and fair disclosure to the court. | Upheld the principle that a party must come with clean hands and disclose all material facts. |
| Castelli Vs. Cook (1849) 7 Hare | English law foundation of Clean Hands Doctrine emphasizing full disclosure in ex-parte applications. | Supported the requirement for plaintiffs to state the whole case fairly to the court. |
| Republic of Peru Vs. Dreyfus Bros. and Co. 55 LT 802 | Doctrine of Clean Hands in equity jurisprudence. | Reinforced the principle that equitable relief is denied to parties acting in bad faith. |
| R Vs. Kensington Income Tax Commissioner (1917) 1 KB 486 | Full and fair disclosure of material facts required when seeking relief. | Referenced for the maxim that courts cannot be abettors in inequity and require candor. |
| A V Papayyasastri Vs Govt. Of AP (2007) 4 SCC | Decree obtained by fraud is null and void. | Applied to emphasize that fraud on court vitiates relief. |
| Dalit Singh Vs. State of UP (2010) 2 SCC 114 | Principle of "Satya" (truthfulness) in judicial proceedings. | Supported the requirement of honesty and good faith in litigation. |
| Oswal Fats and Oils Ltd. Vs Additional Commissioner (Admn.) Bareilly Division, Bareilly (2010) 4 SCC 728 | Imposition of costs for violating Clean Hands Doctrine. | Cited to justify cost imposition for litigants acting with malafide intent. |
| Kusha Duruka Vs. State of Orissa CR. APP no. 303/24 arising out of SLP (Crm) no. 10301/2023 dated 19.01.2024 | Reiteration of Clean Hands and Satya principles. | Used to affirm the importance of disclosure and honesty in court proceedings. |
| Motilal Sangara Vs. Prem Prakash @ Alius Pappu | Reinforcement of Satya and Clean Hands Doctrine. | Supported the court’s adverse inference against complainant’s conduct. |
| Arunima Barauh Vs. Union of India CA no. 2205/2007 decided on 27.04.2007 | Impact of suppression of facts on right to access justice. | Referenced to demonstrate consequences of non-disclosure on judicial access. |
Court's Reasoning and Analysis
The court examined the timeline and facts of the unauthorized transactions, the complainant’s prompt reporting, and the bank’s partial compliance with the Banking Ombudsman’s order. However, the court focused primarily on the complainant’s conduct during the proceedings, noting his willful concealment of the receipt of substantial refunds from the bank and other beneficiary banks over a period of nearly a year. This concealment was deemed a serious breach of the Doctrine of Clean Hands, which mandates that a party seeking equitable relief must come to court with honesty and full disclosure of all material facts.
The court referenced multiple authoritative precedents establishing that relief will be denied to parties who act with malafide intent or suppress material information, as courts cannot be complicit in inequity. The complainant’s failure to disclose the remittances amounted to an abuse of the judicial process and an attempt at unlawful enrichment. Consequently, the court drew adverse inferences against the complainant, dismissed the complaint for want of cause of action, and imposed costs for his dishonest conduct.
Holding and Implications
The complaint is dismissed for want of cause of action due to the complainant’s willful concealment of material facts and malafide conduct, and a cost of Rs. 5,000/- is imposed on the complainant to be deposited with the CCPA.
This decision directly affects the parties by terminating the complaint without further relief to the complainant and penalizing him for misuse of the judicial process. The ruling underscores the strict application of the Doctrine of Clean Hands in consumer dispute proceedings, reinforcing that courts will not entertain claims tainted by dishonesty or suppression of facts. No new legal precedent is established beyond the application of established equitable principles.
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DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-III: WEST
GOVT. OF NCT OF DELHI
C-BLOCK, COMMUNITY CENTRE, PANKHA ROAD, JANAK PURI NEW DELHI Complaint Case No. 304/2023
IN THE MATTER OF:
Brijesh Malik S/o Lt. Sh. Vinod Malik R/o Flat no-272, Milansar Apartment, PaschimVihar, Delhi - 110063. …..COMPLAINANT Versus
IndusInd Bank Ltd.
Through Manager/A.R.
Shop no. G 5 to 7, Skipper House, Building no. 62-63, Nehru Place, Delhi - 110019 …....OPPOSITE PARTY
DATE OF INSTITUTION:
JUDGMENT RESERVED ON:
DATE OF DECISION :
03.08.2023
10.09.2024
19.09.2024
Ms. Sonica Mehrotra, President Ms.Richa Jindal, Member Mr. Anil Kumar Koushal, Member Order passed by Ms. Sonica Mehrotra, President
ORDER
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1. Facts in brief material for adjudication of the present complaint are that complainant was maintaining Savings Bank Account no. 100030421119 with OP's Nehru Place Branch, Delhi where as on 14.01.2023, the credit balance in his account was Rs. 7,61,011/-. However on 15.01.2023 between 12:15 pm to 12:57 pm, he received SMS alerts on his mobile showing three beneficiaries in the name of Brijesh, Malik and UmeshTamang added to his account. He contacted the helpline of OP around this time of SMS alerts to inform OP of hacking of his bank account and for requesting a debit freeze but could only connect with OP helpline by 12:45 pm or so and the OP's executive online verified his credentials and informed complainant of some fraud transfer transactions in his account for which complainant immediately ask the executive to block his account and debit freeze it which was done by 12:57 pm and later at 1:13 pm, he also received e-mail from OP bank in which OP sought 5 days time to resolve the issue by the concerned team of OP. However, during the time period
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between 12:48 pm and 12:56 pm, 6 unauthorized debit transactions to the tune of Rs. 5,49,997/- were made from his account by fraudsters through IMPS transactions IDs and fund transfer and despite freezing of his account by OP at 1:13 pm on 15.01.2023 he received an e-mail at 1:20 pm of transaction of changing old limit of Rs. 10 lacs to Rs. 9.73 lacs which was again reversed, all of which highlights the incompetence, incapability and negligence of OP bank to check the fraud activity. Complainant also lodged a complaint with Cyber Cell of Delhi Police at its Web portal the same day. Next day he sent a written complaint to OP and met its Branch Manager requesting for remittance of unauthorized transactions amount but despite several follow-ups by way of visits and complaints, no redressal was given by OP nor amounts remitted back in complainant's account and instead vide e-mail dated 23.03.2023, OP informed him that these transactions were carried out through mobile banking linked with complainant's account and in a way rejected the claim of the complainant in
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implied manner and has thus avoided its legal liability of refunding the money groundly debited from his account thereby violating directions of RBI vide circular no. RBI/2017- 18/15 dated 16.07.2017. Therefore, alleging gross deficiency of service and illegal, unlawful, uncalled for, unjust and arbitrary acts of OP against principles of natural justice, the complainant has preferred the present complaint in August 2023 praying for issuance of directions to OP to refund the unauthorized debit transaction sum of Rs. 5,49,997/- with interest @ 12 % pa in favour of complainant along with Rs. 2 lacs as compensation for mental harassment and Rs. 55,000/- as cost of litigation.
2. Complainant has attached emails from OP pertaining to adding of beneficiaries and debits from complainant's account with OP on 15.01.2023, email correspondence between parties between 15.01.2023-23.03.2023 with accompanying certificate u/sec 65B of Indian Evidence Act and RBI circular.
3. Arguments were heard on admission on 28.08.2023 and notice was issued to OP to appear on 23.11.2023 on which date
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complainant placed on record proof of service effected on OP on 19.09.2023. OP did not however appear on this date. On the next date of hearing held on 22.03.2024, OP counsel appeared but did not file WS within stipulated mandatory period of 45 days from date of service and instead filed an application under Order 7 Rule 11 CPC for rejection of complaint which was dismissed as right of defence of OP was already struck off. On the subsequent date of hearing held on 06.05.2024, complainant did not appear and OP 's counsel informed the Bench that OP has already made payments to the complainant in view of which statement , complainant was directed to be present on the NDOH i.e. 24.05.2024 on which date complainant appeared with counsel and OP submitted that vide letter dated 30.09.2023 to the complainant, it has already remitted back the unauthorized withdrawal amount Rs. 4,12,498/- to the Complainant apart from the balance sum remitted by IDFC First Bank and Kotak Mahindra Bank Ltd. to the tune of Rs. 75,000/- and 50,000/- respectively which were
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other beneficiary banks thus totaling Rs. 5,37,498/- in Complainant's Account compliance of banking Ombudsman order which had directed OP to remit 75% of Rs. 5,49,997/- which comes to Rs. 4,12,498/-. The complainant was confronted with this statement of OP in hearing held on 10.09.2024 and was put to specific question by the Bench for willful concealment of receipt of the claim amounting September 2023 itself i.e. earlier ago and reason for withholding this vital information from the Bench in all hearings, 5 in number held between November 2023 till September 2024 for which no cogent explanation came forward. We have taken strong exception to such conduct of the complainant coming to court with unclean hands and wasting precious judicial time by concealing vital information from the Bench which conducts smacks of his willful malafide intention to misuse the legal machinery for making unlawful enrichment to self. In catena of judgments passed by Hon'ble Apex Court, "Clean Hands" Doctrine has been laid down based
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on the maxim of equity which states that "one who comes on equity must come with clean hands". This doctrine requires the Court to deny equitable relief to a party who has violated good faith with respect to subject of claim. A Court cannot be the abettor to inequity. A landmark case in this regard is by Hon'ble Supreme Court in Ramjas Foundation Vs Union of India (2010)
14 SCC 38 in which this doctrine was unequivocally upheld based on English law of Castelli Vs. Cook (1849) 7 Hare which stated that "a plaintiff applying ex-parte comes …….under a contract with the Court that he will state the whole case fully and fairly to the court" failing which he is deemed to have broken faith with the court. This same principle was enunciated in Republic of Peru Vs. Dreyfus Bros. and Co. 55 LT 802. Relevant it is to refer to judgment of R Vs. Kensington Income Tax Commissioner (1917) 1 KB 486 (A) wherein Lord Cozens - Hardy M.R. and Warrington held that when and applicant comes to the court to obtain relief on ex-parte statement/status, he should make full and fair disclosure of all
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material facts-facts not law as court is supposed to know the law but it knows nothing about the facts. Halsbury's Law of England have also elucidated on this doctrine. Hon'ble Apex Court in A V Papayyasastri Vs Govt. Of AP (2007) 4 SCC held that a decree obtained by fraud on court is a nullity and non - est in eyes of law as also in Dalit Singh Vs. State of UP (2010) 2 SCC 114 which lays down principle of "Satya" it is apposite to refer to Oswal Fats and Oils Ltd. Vs Additional Commissioner (Admn.) Bareilly Division , Bareilly (2010) 4 SSCC 728 in which Hon'ble Supreme Court dismissing the appeal awarded cost/penalty of Rs. 2 lacs for violating Doctrine of Clean Hands. Following age old precedents of English Law and our Hon'ble Apex Court, the subordinate judiciary including District Courts ,CLB, Consumer Forums, ITAT, CES TAT, Sessions Courts, Revenue Courts and Labour courts are applying the Doctrine of Clean Hands with full force and vigour. In recent judgment of Hon'ble Supreme Court in Kusha Duruka Vs. State of Orissa CR. APP no. 303/24 arising out of SLP (Crm) no. 10301/2023 dated
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19.01.2024 in which Hon'ble Supreme Court referring /citing Kensington (Supra) and Dalit Singh(Supra) judgements apart from Motilal Sangara Vs. Prem Prakash @ Alius Pappu judgment reiterating the judgment of Satya and Clean Hands. Also reference is made to Arunima Barauh Vs. Union of India CA no. 2205/2007 decided on 27.04.2007 pertaining to extent suppression of facts by way of non-disclosure can impact a person's right to access of justice. After thorough legal discourse on the jurisprudence of Doctrine of Clean Hands squarely applicable to present case where willful suppression of remittance by OP bank including other banks has been made by the complainant since the inception of complaint for a year till September 2024, we have drawn adverse inference against the complainant for malafide intention and approaching this Commission with unclean hands by misusing judicial machinery for unlawful gains. We therefore dismiss the complaint for no cause of action & impose cost of Rs. 5000/- on the complainant to be deposited with CCPA for such malafide and dishonest
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conduct & breach trust of this Court. Let the cost deposited by complainant with CCPA within one month from date of pronouncement of order of this Commission.
4. Let the copy of this order be made available to the both the parties on application for free certified copy under the name of President of this Commission as per guidelines of Hon'ble
SCDRC.
5. File be consigned to record room after date of pronouncement.
6. Announced on 19.09.2024. (Richa Jindal)
Member
(Anil Kumar Koushal) Member
(Sonica Mehrotra)
President
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