Holding

A writ petition filed with suppressed material facts is liable to be dismissed at the threshold, and the appellant is not entitled to any relief.

Summary

The Supreme Court examined a civil appeal challenging the award of a contract by Steel Authority of India Ltd. (SAIL) under its fifth tender notice and the subsequent handling of a fourth tender notice. The appellant alleged fraud and that SAIL had acted against natural justice, claiming a settlement had been reached without his consent. The Court held that the appellant had suppressed material facts and misrepresented the proceedings, violating the clean‑hands principle required in writ jurisdiction. Consequently, the petition was dismissed at the threshold, and on merits the Court found no basis to set aside SAIL’s actions or the High Court’s order. The contract under the fifth tender notice had expired, giving the appellant no right to continue work under the fourth notice. The appeal was dismissed with costs.

Issues considered

Whether suppression of material facts by a petitioner in a writ petition warrants dismissal at the threshold.
Whether alleged fraud in the award of a contract under tender notices can invalidate the award.
Whether the appellant is entitled to relief under the fourth tender notice after the expiry of the contract awarded under the fifth tender notice.
Whether the High Court’s order based on an alleged settlement can be set aside.

Legislation cited

Constitution of Indias. Article 226, s. Article 32

Subjects

writ jurisdictionsuppression of material factsfraudclean handsprerogative writtender processcontract awardArticle 32Article 226contempt of courtequitable relief

Judgment

[2008] 10 S.C.R. 454

~ ....,,.
A K.D. SHARMA
v.
STEEL AUTHORITY OF INDIA LTD. & ORS.
(Civil Appeal No. 4270 of 2008)
JULY 9, 2008
B
[C.K. THAKKER AND D.K. JAIN, JJ.]

Equity - Suppression of material facts - In the writ court
- Effect ot-Held: Under writ jurisdiction which isprerogative,
c equitable, discretionary and extraordinary jurisdiction, con-
cealment of material facts, would amount to manipulation and
misrepresentation - Prerogative remedy is not a matter of
course - Such petition liable to be dismissed at the threshold
without considering the merits of the case - Such applicant is
required to be dealt with for contempt of court for abusing the ,_
D
process of court - Constitution of India, 1950 - Articles 32
and 226.
Contract - Tender notice - Cancellation of four tender
notices - Grant of contract under fifth tender notice - One of
E the bidders challenging grant of contract under fifth tender
notice - Challenge rejected - Review petition by the bidder
as his bid was not considered - High Court directing the au-
thorities to consider the bidder under fourth tender notice -
Grant of contract to the bidder - Contractor under fifth tender
F notice challenging the grant of contract - Application for dis- ..,,
posal of matter under compromise allowed by High Court -
Contractor under fifth tender notice denying to have entered
any compromise and alleging fraud - Held: In the facts of the
case no fraud played as the contractor actually was party to
the compromise - The contract given under fifth· tender notice
G
having expired, contractor not entitled to contract under fourth
tender notice.
1
Words and Phrases - "Fraud" - Meaning of

H 454
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 455
LTD. & ORS.

Respondef)t No. 1 Steel Authority of India (SAIL) is- A
sued tender for raising, transporting etc. of iron ore. ln
1

Part I of the tender (Techno-Commercial Parameters) only
one bidder i.e. respondent No. 2 was qualified. Therefore
Part II of the tender (Price Bid) was not opened becau$e
minimum three techno-commercially qualified offers were B
required for opening the same and hence the tender pro-
cess was cancelled. Thereafter 2nd, 3rd and 4th tenders
were floated, but the same were unsuccessful. The ten-
der was floated for the fifth time, where under work wa's
entrusted to. the appellant for a period of 3 years. Resporl- c
dent No. 2 filed a writ petition challengfng the decision of
respondent No. 1 in granting the work to the appellant
alleging that the bid of the appellant was illegally accepted
and respondent No. 1 had cancelled the previous tenders
in order to oblige the appellant and entrust work to th~
0
appellant. The petition was dismissed by High Court. Re~
spondent No. 2 on coming to know that despite being eli·
gible his case was not considered, filed a review 'Petition:
The High Court directed respondent No. 1 to open the
fourth tender and consider the case of respondent No. 2
and the appellant afresh. The order was unsuccessfully E
challenged upto Supreme Court. Thereafter respondent
No. 1 opened the tender and decided to entrust the work
to respondent No. 2. Appellant filed application praying to.
decide disqualification of respon.dent No. 2 . Two applica-
tions were also filed requesting the court to dispose of the F
matters in view of compromise and settlement arrived at
between the parties. High Court disposed of all the appli- '
cations on the basis of the settlement. Appellant filed an
application alleging that fraud has been committed by the ·
respondents on him as well as on the Court. The applica- G
~ tion was rejected by High Court. Hence the present appeal. '
Appellant contended that fraud had been committed
in as much as the appellant had never entered into any
settlement or compromise.
H
456 SUPREME COURT REPORTS [2008] 10 S.C.R. \.. "~ .
r

A Respondent No. 1 contended that compromise had
been entered into in the presence of the Power of Attor-
ney/representative of the appellant duly authorised by the
appellant; and that the work entrusted to the appellant was
under fifth tender notice for a period of three years and not
B under tender notice No. 4 and thus on expiry of period of
three years there was no right in favour of the appellant.
Dismissing the appeal, the Court \

HELD:1.1 The jurisdiction of the Supreme Court un-
c der Article 32 and of the High Court under Article 226 of
the Constitution of India is extraordinary, equitable and
discretionary. Prerogative writs mentioned therein are is-
sued for doing substantial justice. It is, therefore, of ut-
most necessity that the petitioner approaching the writ
court must come with clean hands, put forward all the facts
D
before the Court without concealing or suppressing any-
thing and seek an appropriate relief. If there is no candid
disclosure of relevant and material facts or the petitioner
is guilty of misleading the Court, his petition may be dis-
missed at the threshold without considering the merits of
E the claim. [Para 24] [470 A-B]

S.P Chengalvaraya Naidu (Dead) by Lrs. v. Jagannath
(Dead) by Lrs. and Ors., 1994 (1) SCC 1; State of Haryana v.
Kamal Distillery, 1977 (2) SCC 431; Vijay Kumar v. State of
F Haryana, 1983 (3) SCC 333; We/com Hotel v. State of A.P,
1983 (4) SCC 575; Agricultural and Process Food Products
v. Oswal Agro Furnae, 1996 (4) SCC 297; State of Punjab v.
Sarav Preet, 2002 (9) SCC 601; Union of India v. Muneesh
Suneja, 2001 (3) SCC 92; All India Sate Bank Officers Fed-
eration v. Union of India, 1990 Supp SCC 336; Vijay Syal
G
and Anr. v. State of Punjab and Ors., 2003 (9) SCC 401 - re- ·~

lied on.
A. V Papayya Sastry and Ors. v. Govt. of A.P and. Ors.,
2007 (4) sec 221 - distinguished.
H
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 457
LTD. & ORS.

R. v. General Income Tax Commissioners for Kensington A
exparte Polignac 1917 (1) KB 486: 86 LJ KB 257:116 LT
136 - referred to.
1.2 The party who invokes the extraordinary juris-
diction of this Court under Article 32 or of a High Court
under Article 226 of the Constitution is supposed to be B
truthful, frank and open: He must disclose all material facts
without any reservation even if they are against him. He
cannot be allowed tQ play 'hide and seek' or to 'pick and
choose' the facts he likes to disclose and to suppress
(keep back) or not to disclose (conceal) other facts. The C
very basis of the writ jurisdiction rests in disclosure of
true and complete (correct) facts. If material facts are sup-
pressed or distorted, the very functioning of Writ Courts
and exercise would become impossible. The petitioner
must disclose atl the facts having a bearing on the relief D
sought without any qualification. This is because, "the
Court knows law but not facts". [Para 28] [471 F-H, 472-A]
1.3 An applicant who does not come with candid facts
and 'clean breast' cannot hold a writ of the Court with
'soiled hands'. Suppression or concealment of material E
facts is not an advocacy. It is a jugglery, manipulation,
maneuvering or misrepresentation, which has no place
in equitable and prerogative jurisdiction. If the applicant
does not disclose all the material facts fairly and truly but
states them in a distorted manner and misleads the Court, F
the Court has inherent power in order to protect itself and
to prevent an abuse of its process to discharge the rule
nisi and refuse to proceed further with the examination of
the case on merits. If the Court does not reject the peti-
tion on that ground, the Court would be failing in its duty. G
In fact, such an applicant requires to be dealt with for con-
tempt of Court for abusing the process of the Court. [Para
29] [472 B-E]
1.4 A prerogative remedy is not a matter of course.
H
458 SUPREME COURT REPORTS [2008] 10 S.C.R.

A While exercising extraordinary power a Writ Court would
certainly bear in mind the conduct of the party who in-
vokes the jurisdiction of the Court. The rule has been
evolved in larger public interest to deter unscrupulous
litigants from abusing the process of Court by deceiving
B it. [Para 26] [470 G-H, 471 A]
1.5 In the case on hand, the appellant has not come·
forward with all the facts. He has chosen to state facts in .
the manner suited to him by giving an impression to the
Writ Court that an instrumentality of State (Respondent
C No. 1) has not followed doctrine of natural justice and fun-
damental principles of fair procedure. This is not proper.
Hence, on that ground alone, the appellant cannot claim
equitable relief. [Para 46] [478 8-C]
2.1 Even on merits, no case has been made out by
0
the appellant to interfere with the action of respondent
No. 1 or the order passed by the High Court. Pursuant to
the order passed by the High Court in Review and after
dismissal of Special Leave Petitions by this Court, respon-
dent No~ 1 issued notices to the parties including the ap-
E pellant. Respondent No.2 remained present for negotia-
tion. The appellant received the notice but intimated SAIL
that his Power of Attorney/representative would remain
present on his behalf. At no point of time, the appellant
had made any grievance against the Power of Attorney
F nor he had informed respondent No. 1 that he had with-
drawn Power of Attorney issued earlier. It, therefore, can-
not be said that the appellant was deceived or cheated,
either by respondent No. 1 or by anyone else. It does lie
in the mouth of the appellant that respondent No. 1 had
G acted in breach of natural justice. [Paras 19,20 and 46]
[467-G, 468-A,B,C,D, 478-C]
2.2 From the record, it is clear that tender notice No.4
was wrongly ignored and no process thereunder was
undertaken by respondent No. 1. What was granted to
H
.....- . K.D. SHARMA v. STEEL AUTHORITY OF INDIA
LTD. & ORS.
459

the appellant was a contract under tender notice No.5. A
The appellant was working under tender notice No.5.
Meanwhile, the review of respondent No.2 against tender
notice No.4 was allowed and after the order passed by this
Court dismissing Special Leave Petitions, respondent No.
1 implemented the said order, bid of respondent No.2 was 8
accepted and contract was given to him. Respondent No.
1 is right in urging that the appellant cannot insist that even
under the contract under tender notice No.4, he should be
allowed to continue the work. [Para 22] [469 8-C]
3. Fraud is an act of deliberate deception with the c
design of securing something by taking unfair advantage
of another. In fraud one gains at the loss and cost of an-
other. Even the most solemn proceedings stand vitiated
if they are actuated by fraud. Fraud is thus an extrinsic
collateral act which vitiates all judicial acts, whether in rem D
or in personam. [Para 17] [467 E-F]
A.'v. Papayya Sastry and Ors. v. Govt. of A.P and Ors.,
. 2007 (4) sec 221 - referred to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4270 E
of 2008
From the Judgment & Order dated 16.2.2005 of the High
Court of Orissa, Cuttack in Misc. Case Nos. 9 & 1O of 2005 in
Review Petition No. 4/2002
F
Mahendra Anand, Kamal Behari Panda, Neeraj Kumar
Jain, Sanjay Singh, Sandeep Chaturvedi and Ugra Shankar
Prasad for the Appellant.
Jagdeep Dhankar, Sunil Kumar Jain for the Respondents
~
No. 1, 3 & 4. G
Kailash Vasdev, Kumud Lata Das for the Respondent No. 2
Santosh Mishra and Sharmila Upadhyay for Intervening
Party.
H
460 SUPREME COURT REPORTS [2008] 10 S.C.R.

A The Judgment of the Court was delivered by
C.K. THAKKER, J. 1. Leave granted.
2. The present appeal arises out of the judgment and or-
der dated February 16, 2005 in Miscellaneous Case Nos. 9
B and 10 of 2005 and Miscellaneous Case No. 57 of 2004 in
Review Petition No. 4 of 2002 passed by the High Court of
Orissa.
3. Shortly stated the facts of the case are that respondent
No. 1, Steel Authority of India Ltd. ('SAIL' for short) issued ten-
C ders for raising, transporting and loading of iron ore lump and
fines into railway wagons at Kalta Iron Mine. The tender was
required to be submitted in tWo parts: (i) Techno-Commercial
Parameters (Part-I) and (ii) Price Bid (Part-II). Price bid of the
tender was to be opened only after opening of the Techno-Com-
D mercial Parameters and if the bidder was found qualified. In
response to the first notice dated June 5, 2000, 19 tender pa-
pers were sold. The authorities, however, received response
only from 10 persons. Tech no-Commercial Parameters (Part-I)
was opened and it was found that only one bidder, namely, M/s
E Ores India Pvt. Ltd. (respondent NO. 2 herein) was qualified.
The process, therefore, had to be cancelled because for open-
ing of Price Bid (Part-II), minimum three Techno-Commercially
qualified offers ought to have been there as per Clause 7.7 of
Purchase/Contract Procedure, 2000. Re-tender was, therefore,
F issued on September 8, 2000, but it was also required to be
cancelled owing to 'no perceptible improvement' in the situa-
tion. The tender was floated for the third time, which was unsuc-
cessful. The fourth notice inviting tenders was issued on Janu-
ary 22, 2001. It met with the same fate. Then fifth time, tenders
G were invited on May 7, 2001 wherein the appellant was found
eligible and qualified. His bid was the lowest. The said bid was
accepted and the work was entrusted to him. The decision taken
by the first respondent (SAIL) came to be challenged by respon-
dent No. 2 in the High Court of Orissa by filing a Writ Petition
H being OJC No. 3508 of 2002. The main allegation of the peti-
- ~
K.D. SHARMA v. STEEL AUTHORITY OF INDIA
LTD. & ORS. [C.K. THAKKER, J]
461

tioner before the High Court (respondent No. 2 herein) was that A
first respondent (SAIL) cancelled previous four notices inviting
tenders only with a view to oblige the appellant and to entrust
work to him who could not qualify himself earlier for want of req-
--1 uisite eligible criteria in tender process. Ultimately, the standard
as prescribed earlier was relaxed and lowered down in the 5th B
tender notice. When the present appellant became eligible and
qualified, the tenders were opened and his bid was illegally
accepted by SAIL. The petition was heard on merits and the
High Court vide its judgment and order dated May 30, 2002
dismissed the petition. Respondent No. 2, however, came to c
know that he was eligible and yet his case was not considered.
He, therefore, filed a review in the High Court which was regis-
tered as Review Petition No. 4 of 2002. By a judgment and
.. order dated February 3, 2003, the Division Bench allowed the
Review Petition and directed the authorities (SAIL) to open fourth
0
tender and consider the case of the petitioner (respondent No.
2) and respondent No. 3 (appellant) afresh in accordance with
law within a period of one month from the receipt of the writ.
The above order was challenged by the appellant by filing Spe-
cial Leave Petition in this Court. Special· Leave Petition was
also filed by SAIL. Both the Special Leave Petitions, however, E
were dismissed by this Court on November 28, 2003.
4. It is alleged by the appellant that after dismissal of Spe-
~ cial Leave Petitions by this Court, SAIL opened tender in pres-
ence of the second respondent only without intimating the ap- F
pellant and in his absence. SAIL also negotiated the rates with
the second respondent and decided to entrust the work to him.
Meanwhile, several applications were filed before the High Court
for clarification and/or modification/ alteration of the order
passed in Review Petition. Miscellaneous Case No. 46of2004 G
t was filed by respondent No. 2 seeking implementation of the
order of the High Court dated February 3, 2003. Miscellaneous
Case No. 48 of 2004 was filed by SAIL for clarification while
Miscellaneous Case No. 57 of 2004 was filed by the appellant
to decide disqualification of respondent No. 2. Miscellaneous
H
462 SUPREME COURT REPORTS [2008) 10 S.C.R.

A Cases 9 and 10 of 2005 were also said to have been filed re-
questing the High. Court fo dispose of matters in view of com-
promise and settlement arrived at between .the parties.
5. The High Court by the impugned order dated February
16, 2005, disposed of all the applications on the basis· of the
8 settlement said to have been arrived at between the parties
which was duly recorded in the order wherein the present ap-
pellant was also a party-respondent. The appellant came to know
that fraud had been committed by the respondents upon him as
well as upon the Court. He, therefore, filed Miscellaneous Case
C No. 63 of 2005 on June 28, 2005 to recall the order dated Feb-
ruary 16, 2005 alleging inter alia that fraud has been perpe-
trated by the opposite party on him as well as on the Hon'ble
Court. · A prayer was also made to investigate the matter by
Central Bureau of Investigation (CBI) or Vigilance Authorities.
D Since nothing was done by the High Court, he again approached
this Court by filing Special Leave Petition which was registered
as Special Leave Petition (Civil) No ....... of 2006 (CC 2486 of
2006). The said petition came up for hearing before this Court
and was dismissed on May 12, 2006 as "not pressed at this
E stage". It was observed that if the petitioner would make a prayer
before the High Court for expeditious disposal of the applica-
tion to recall the order, the said prayer would be considered
appropriately and application would be disposed of accordingly.
It is the case of the applicant that even thereafter the recall ap-
F plication had not been placed before the Court and was not
decided as directed by this Court. In the circumstances, the
appellant approached this Court by filing a Special Leave Peti-
tion on September 6, 2006.
6. On October 9, 2006, the matter was placed before this
G Court for admission hearing. Notice was issued to the respon- ·
dents. When the matter was placed for further hearing on March
8, 2007, ·the following order was passed;
"Service is complete.
H Though served, nobody appears on benalf of respondent
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 463
LTD. & ORS. [C.K. THAKKER, J]
=- -.t No. 2 (original petitioner). With a view to give one more A
opportunity, list the matter after two weeks".
7. According to the appellant, it is only after the above or-
der that the wheels moved very fast. The respondents made all
attempts to get the matter on Board before the High Court. The
~ Court finally rejected the prayer of the appellant for recalling of B
the order and dismissed the application. According to the ap-
pellant, all those actions were illegal, contrary to law and de-
serve interference by this Court. ·
8. We have heard the learned counsel for the parties. c
9. Learned counsel for the appellant contended that fraud
has been played upon the Court as well as upon the appellant
and all orders passed by the High Court deserve to be quashed
and set aside only on that ground. According to the appellant,
~ when Miscellaneous Petitions were placed before the High D
Court, the Court was bound to decide them in accordance with
law after hearing the parties. Instead, the High Court disposed
of all the petitions on the basis of 'so-called' settlement said to
have been arrived at between the parties. So far as appellant
is concerned, he had never entered into any settlement or com- E
promise. Mr. C.M. Ramesh, Chairman and Managing Director
of Rithwik Projects who was earlier representative of the appel-
lant and in whose favour the appellant had issued Power of At-
torney had joined hands with respondent No. 2 and was virtually
won over by him. The appellant had also revoked and withdrawn
~
Power of Attorney issued in favour of Ramesh and, obviously
f
therefore, he had no authority to represent the appellant and
could not have appeared either before SAIL for negotiations for
him or entered into any compromise or settlement on behalf of
the appellant. It was also contended that though for a substan-
G
tial long period, application for recalling of order instituted by
the appellant had not come on Board and he had to approach
t this Court making grievance about non-hearing of the matter,
there was no progress whatsoever. It was only after the order
passed by this Court and affording an opportunity to the respon-
H
464 SUPREME COURT REPORTS [2008] 10 S.C.R.

A dent stating that if he would not appear, an appropriate order~ -
would be passed that respondent No. 2 got the matter hurriedly
disposed of in the High Court. It was also the allegation of the
appellant that at the time of hearing of Miscellaneous Cases, a
new advocate appeared on his behalf who was not engaged by
B the appellant. Some blank papers on which the appellant might
have singed earlier came to be utilized for the purpose of mak- )-.
ing applications for settlement showing that the appellant was
agreeable to such settlement; the settlement was produced
before the Court and on that basis, the matter were finally dis-
c posed of on the assumption that all the parties had compro-
mised and amicably settled the matter and nothing was required
to be done. Accordingly all the three Miscellaneous Petitions
Nos. 46, 48 and 57 of 2004 were disposed of. It was submitted
that in these circumstances, the order passed by the High Court
deserves to be quashed and set aside by remitting the matter
0
to the High Court so that the recall-application filed by the ap- t
pellant be decided afresh after hearing the parties.
10. The learned counsel for Respondent No. 1-SAIL
strongly refuted the allegations l~velled by the appellant. An
E affidavit-in-reply is filed denying all the averments and allega-
tions against SAIL. It was stated that the order passed by the
High Court in Review Petitio.n was challenged by SAIL, but Spe-
cial Leave Petition was dismissed. Thereafter obviously, SAIL
was required to act in accordance with the order passed by the
F High Court in the Review Petition and confirmed by this Court.
It was also submitted by learned counsel for SAIL that bald alle-"
gations have been levelled against SAIL by the appellant with-
out there being any material whatsoever in support of such alle-
gations. On the contrary, all throughout SAIL has acted strictly
G in consonance with law. The Counsel stated that in accordance
with the order passed by the High Court in Review Petition, 4th
Tender was considered, notices were issued to respondent No.
2 as also to the appellant herein. The appellant received the-j
notice. He addressed a letter to SAIL stating therein that he
would remain present in pursuance of the notice issued by SAIL
H
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 465
LTD. & ORS. [C.K. THAKKER, J]
~

• through his Power of Attorney and representative Ramesh of
Rithwik Projects. Accordingly, Rithwik Projects through its Chair-
A

man and Managing Director Ramesh appeared and a deci-
sion was taken to entrust contract to respondent No. 2. In the
circumstances, it cannot be said that any fraud has been com-
mitted by SAIL either on the appellant or on the Court. The coun- B
sel for SAIL further stated that the appellant has not been af-
fected at all. It was stated that work entrusted to the appellant
was under tender notice 5 and not under tender notice 4. Pe-
riod of tender notice 5 was for three years. The said period of
three years was over and the appellant had completed the said c
work. Thereafter there was no right in favour of the appellant nor
he could insist continuance of the contract. The counsel, there-
fore, submitted that the appeal should be dismissed by this
Court.

)
11. Even otherwise, according to the counsel, no commu- D
nication was sent at any point of time by the appellant to SAIL
that though earlier he had issued Power of Attorney in favour of
Ramesh of Rithwik Projects, it was subsequently withdrawn or
revoked and that he would not represent the appellant in future
before SAIL. On the contrary, though notice was issued by SAIL E
and received by the appellant, he did not remain present and
sent a communication to SAIL that Ramesh of Rithwik Projects
would represent him. It was, therefore, not open to the appel-
lant thereafter to turn round and make wild allegations against
SAIL nor is he entitled to any relief. F
~
12. On behalf of respondent No. 2 - M/s Ores India Pvt.
Ltd., the counsel contended that no case whatsoever has been
made out by the appellant so as to interfere with the order passed
by the High Court. According to the counsel, in fact SAIL had
obliged appellant which was clear from the facts and proved G
/
from the decision in the Review Petition by the High Court. When
• 4th tender notice was cancelled, respondent No. 2 instituted a
writ petition challenging the said action of SAIL. Meanwhile, 5th
tender notice was issued and the bid of the present appellant
was accepted by SAIL. The petition filed by respondent No. 2 H
466 SUPREME COURT REPORTS [2008] 10 S.C.R.

A in relation to 4th tender notice came to be dismissed. Subse-
quently, however, respondent No. 2 came to know that though
• .._

respondent No. 2 was eligible and qualified, SAIL had obliged
the present appellant by canceling the process of 4th tender
notice considering otner bidders ineligible and unqualified. He,
B hence, filed Review Petition. In Review Petition, the Court was
)...
convinced that the grievance voiced by respondent No. 2 was
correct and the action of SAIL was wholly illegal and improper.
Review Petition was, therefore, allowed and SAIL was directed
\,
to reconsider the Tender Notice by treating the respondent No.
c 2 as eligible and qualified. Even observations were made by
the High Court against the condud of officers of SAIL. The said
order was challenged hy SAIL as also by the appellant but this
Court did not interfere. 4th Tender was thereafter considered.
Notices were given to all bidders including the appellant. The
bid of respondent No. 2 was accepted and the work was en-
D
trusted to him. It is, therefore, submitted that the appellant has k

no reason or ground to make grievance against that action and
the appeal filed by him is liable to be dismissed.
t
13. We have considered rival contentions of the parties. I
E
14. The learned counsel for the appellant allegeg that fraud
had been committed by the respondents on the appellant as
well as on the Court. Only on that ground, the impugned action
of SAi L granting contract in favour of respondent No.2 deserves
to be set aside. According to the counsel, Ramesh, Chairman
F and Managing Director of Rithwik Projects, in whose favour the ,._
appellant had issued Power of Attorney, had taken side of re-
spondent No.2. The Power of Attorney was, therefore, later on
. withdrawn by the appellant and yet he was allowed to be repre-
sented for the appellant before SAIL as also before the High 1
G Court and 'so called' compromise and settlement was arrived
at. He was not authorized to do so against the interest of the
appellant and on his representation, the High Court could not ~
l
have disposed of Miscellaneous Cases.
15. It is well settled that "fraud avoids all judicial acts, eccle-
H
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 467
LTD. & ORS. [C.K. THAKKER, J]
... .t
siastical or temporal" proclaimed Chief Justice Edward Coke A
of England before about three centuries. Reference was made
by the counsel to a leading decision of this Court in S.P
Chengalvaraya Naidu (Dead) by Lrs. V Jagannath (Dead) by
Lrs. & Ors., (1994) 1 SCC 1 wherein quoting the above obser-
vations, this Court held that a judgment/decree obtained by fraud B
has to be treated as a nullity by every Court.
16. Reference was also made to a recent decision of this
•
Court in A. V Papayya Sastry & Ors. V Govt. of A.P & Ors.,
(2007) 4 SCC 221. Considering English and Indian cases, one
of us (C.K. Thakker, J.) stated: c'
"It is thus settled proposition of law that a judgment, decree
or order obtained by playing fraud on the Court, Tribunal
or Authority is a nullity and non est in the eye of law. Such
a judgment, decree or order -by the first Court or by the
D,
final Court- has to be treated as nullity by every Court,
superior or inferior. It can be challenged in any Court, at
any time, in appeal, revision, writ or even in collateral
proceedings".
17. The Court defined fraud as an act of deliberate de- E
ception with the design of securing something by taking unfair
advantage of another. In fraud one gains at the loss and cost of
another. Even the most solemn proceedings stand vitiated if
they are actuated by fraud. Fraud is thus an extrinsic collateral
act which vitiates all judicial acts, whether in rem or in personam. F
18. So far as the proposition of law is concerned, there
can be no two opinions. The learned counsel for the respon-
dents also did not dispute the principles laid down in the above
decisions as also in several other judgments. They, however,
stated that on the facts and in the circumstances of the case, G
the ratio laid down in the above cases has no application.
19. As already adverted to earlier, according to SAIL, pur-
suant to the order passed by the High Court in Review and after
dismissal of Special Leave Petitions by this Court, it issued
H

~
468 SUPREME COURT REPORTS [2008] 10 S.C.R.
~ .
A notices to the parties including the present appellant. Respon-
dent No.2 remained present for negotiation. The appellant re-
ceived the notice but intimated SAIL that Ramesh of Rithwik
Projects would remain present on his behalf. At no point of time,
the appellant had made any grievance against Ramesh nor he
)..
B had informed SAIL that he had withdrawn Power of Attorney
issued earlier in favour of Ramesh. It, therefore, cannot be said
that the appellant was deceived or cheated, either by SAIL or .r
by anyone else.
20. The argument of the learned counsel for the appellant
c of violation of principles of natural justice and fair play also has
no force. When notice was issued by SAIL to the appellant and
he had informed SAIL by a written communication that Ramesh
would remain present as his representative, it does not lie in
the mouth of the appellant that SAIL had acted in breach of natu- •
D ral justice. r,_
21. SAIL in its written submissions contended that the ap-
peal filed by the appellant is liable to be dismissed on account t
I

of suppression of material facts and deliberate misrepresenta-
tion by him. An impression was sought to be created by the
E appellant, submitted the counsel; that the appellant could not
complete the work given to him and was assigned to respon-
dent No.2. It is clear that after tender notice No. 4 was can-
celled, albeit illegally as held by the High Court and by this Court,
tender notice No. 5 was issued. The bid of the appellant was ~-

F accepted and contract was given to him. It was for 2002-05 i.e.
for three years. The appellant was allowed to complete the said
period and the contract had not been terminated or abruptly
discontinued during the said period. It was over in 2005 by efflux
of time. What was done by SAIL was to implement the order of
G High Court in connection with tender notice No. 4 which was not
acted upon. In that process, parties were called for negotia- ~

tions, offer of respondent No.2 was accepted and work was
given to him. It is, therefore, not correct to say that the appellant ,
had suffered. The appellant wanted to continue the work even
H though the period of tender notice No. 5 was over and he had

tr
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 469

- ~
LTD. & ORS. [C.K. THAKKER, J]

taken the benefit thereunder. The appellant had no right or rea- A
son to make grievance so far as tender notice No. 4 was con-
cerned. Hence, the appellant is not entitled to any relief.
22. We find considerable force in the argument of the
learned counsel. From the record, it is clear that tender notic~
No.4 was wrongly ignored and no process thereunder was un- B
dertaken by SAIL. What was granted to the appellant was a
contract under tender notice No.5. The appellant was working
under tender notice No.5. Meanwhile, the review of respondent
No.2 against tender notice No.4 was allowed and after the or-
der passed by this Court dismissing Spe~ial Leave Petitions, c
SAIL implemented the said order, bid of respondent No.2 wa$
accepted and contract was given to him. To us, SAIL is right in
urging that the appellant cannot insist that even under the con~
tract under tender notice No. 4, he should be allowed to con·
tinue the work. We, therefore, see no substance in the argu~ D
ment of the learned counsel for the appellant and the contention
is rejected.
23. The learned counsel for SAIL is also right in urging that
the appellant has not approached the Court with clean hands
by disclosing all facts. An impression is sought to be created E
as if no notice was ever given to him nor he was informed about'.
the consideration of cases of eligible and qualified bidders in1
pursuance of the order passed by the High Court in Review and.
confirmed by this Court. The true facts, however, were just con-
trary to what was sought to be placed before the Court. A notice' F
was issued by SAIL to the appellant, he received the notice,,
intimated in writing to SAIL that he had authorized Ramesh of.
Rithwick Projects to appear on his behalf. Ramesh duly ap-
peared at the time of consideration of bids, bid of respondent '
No.2 was found to be lowest and was accepted and contract, G
was given to him (under tender notice No.4). The said contract
.~ had nothing to do with tender notice No.5 and contract thereun-
der which had been given to the appellant herein and he had ·
completed the work. Thus, it is clear that the appellant had not ,
placed all the facts before \he Court clearly, candidly and frankly. H
470 SUPREME COURT REPORTS [2008] 10 S.C.R.
1.-

i-
...,.;.;...
A 24. The jurisdiction of the Supreme Court under Article 32
a,ild of the High Court under Article 226 of the Constitution is
extraordinary, equitable and discretionary. Prerogative writs
mentioned therein are issued for doing substantial justice. It is,
therefore, of utmost necessity that the petitioner approaching
B the Writ Court must come with clean hands, put forward all the >..
facts before the Court without concealing or suppressing any-
thing and seek an appropriate relief. If there is no candid dis-
closure of relevant and material facts or the petitioner is guilty ..·-
of misleading the Court, his petition may be dismissed at the
c threshold without considering the merits of the claim.
25. The underlying object has been succinctly stated by
Scrutton, L.J., in the leading case of R. v. General Income Tax
Commissioners for Kensington, Ex Parle Polignac (1917) 1
KB 486: 86 LJ KB 257: 116 LT 136 in the following words:
D
"[l]t has been for many years the rule of the Court, and one
which it is of the greatest importance to maintain, that
when an applicant comes to the Court to obtain relief on
an ex parte statement he should make a full and fair
disclosure of all the material facts- it says facts, not law.
E He must not misstate the law if he can help it; the Court
is supposed to know the law. But it knows nothing about
the facts, and the applicant must state fully and fairly the
facts; and the penalty by which the Court enforces that
obligation is that if it finds out that the facts have not been
F r
fully and fairly stated to it the Court will set aside any action
which it has taken on the faith of the imperfect statement".
(emphasis supplied)
26. A prerogative remedy is not a matter of course. While
G exercising extraordinary power a Writ Court would certainly bear
in mind the conduct of the party who invokes the jurisdiction of I
~
the Court. If the applicant makes a false statement or suppresses
material fact or attempts to mislead the Court, the Court may
dismiss the action on that ground alone and may refuse to enter
H into the merits of the case by stating "We will not listen to your
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 471
,,. ., LTD. & ORS. [C.K. THAKKER, J]

application because of what you have done". The rule has been A
evolved in larger public interest to deter unscrupulous litigants
from abusing the process of Court by deceiving it.
27. In Kensington Income Tax Commissioners, (Supra)
Viscount Reading, C.J. observed:
B
"Where an ex parte application has been made to this
Court for a rule nisi or other process, if the Court comes
to the conclusion that the affidavit in support of the
applicant was not candid and did not fairly state the facts,
the Court ought, for its own protection and to prevent an c
abuse of its process, to refuse to proceed any further with
the examination of the merits. This is a power inherent in
the Court, but one which should only be used in cases
which bring conviction to the mind of the Court that it has
; been deceived. Before coming to this conclusion a careful
D
examination will be made of the facts as they are and as
they have been stated in the applicant's affidavit, and
everything will be heard that can be urged to influence the
view of the Court when it reads the affidavit and knows the
true facts. But if the result of this examination and hearing
is to leave no doubt that this Court has been deceived, E
then it will refuse to hear anything further from the
applicant in a proceeding which has only been set in
motion by means of a misleading affidavit".
(emphasis supplied) F
28. The above principles have been accepted in our legal
II system also. As per settled law, the party who invokes the ex-
traordinary jurisdiction of this Court under Article 32 or of a High
Court under Article 226 of the Constitution is supposed to be
truthful, frank and open. He must disclose all material facts with- G
out any reservation even if they are against him. He cannot be
allowed to play 'hide and seek' or to 'pick and choose' the facts
he likes to disclose and to suppress (keep back) or not to dis-
close (conceal) other facts. The very basis of the writ jurisdic- .
tion rests in disclosure of true and complete (correct) facts. If H
472 SUPREME COURT REPORTS [2008] 10 S.C.R.
+ -:..
A material facts are suppressed or distorted, the very functioning
of Writ Courts and exercise would become impossible. The
petitioner must disclose all the facts having a bearing on the
relief sought without any qualification. This is because, "the Court
knows law but not facts".
B 29. If the primary object as highlighted in Kensington In-
come Tax Commissioners is kept in mind, an applicant who
does not come with candid facts and 'clean breast' cannot hold
a writ of the Court with 'soiled hands'. Suppression or conceal-
ment of material facts is not an advocacy. It is a jugglery, ma-
c nipulation, maneuvering or misrepresentation, which has no
place in equitable and prerogative jurisdiction. If the applicant
does not disclose all the material facts fairly and truly but states
them in a distorted manner and misleads the Court, the Court
has inherent power in order to protect itself and to prevent an
D abuse of its process to discharge the rule nisi and refuse to
proceed further with the examination of the case on merits. If
the Court does not reject the petition on t~at ground, the Court
would be failing in its duty. In fact, such an applicant requires to
be dealt with for contempt of Court for abusing the process of
E the Court.
30. Let us consid~r some important decisions on the point:
31 . In State of Haryana v. Kamal Distillery, ( 1977) 2 SCC
431, almost an agreed order was passed by the Court that on
r
F expiry of the licence for manufacturing of liquor on September
6, 1976, the distillery would cease to manufacture liquor under
the licence issued in its favour. Then, the Company filed a peti-
tioh in the High Court for renewal of licence for manufacture of
liquor for 1976-77, and the Court granted stay of disposses-
sion. In appeal, the Supreme Court set aside the order granting
G
stay of dispossession on the ground that the petitioner-Com-
...
pany in filing the petition in the High Court had misled it and
started the proceedings for oblique and ulterior motive.
32. In Vijay Kumar v. State of Haryana, (1983) 3 SCC "
H 333, it was the case of the petitioners that the provisional ad-
-.-

..
...
,.
K.D. SHARMA v. STEEL AUTHORITY OF INDIA
LTD. & ORS. [C.K. THAKKER, J]

missions granted to them were not cancelled and they were
473

A
continuing their studies as post-graduate students in Medical
~
College on the relevant date. On the basis of that statement,
they obtained an order of status quo. The Supreme Court or-
dered inquiry and the District Judge was asked to submit his
"' report whether the provisional admissions granted to the peti- B
tioners were continued till October 1, 1982 or were cancelled.
The report revealed that to the knowledge of the petitioners their
provisional admissions were cancelled long before October 1,
1982 and thus, the petitioners had made false representation
to the Court and obtained a favourable order. c
33. Dismissing the petition, this Court observed:
"But for the misrepresentation this Court would never have
passed the said order. By reason of such conduct they
have disentitled. themselves from getting any relief or D
assistance from this Court and the Special Leave Petitions
are liable to be dismissed".
34. Deprecating the reprehensible conduct of the petition-
ers as well as of their counsel, the Court stated;
"Before parting with the case, however, we cannot help Ei
observing that the conduct or behaviour of the two
petitioners as well as their counsel (Dr. A.K. Kapoor who
happens to be a medico-legal consultant practising in
Courts) is most reprehensible and deserves to be
deprecated. The District Judge's report in that behalf is F
eloquent and most revealing as it points out how the two
petitioners and their counsel, (who also gave evidence in
support of the petitioner's case before the District Judge)
have indulged in telling lies and making reckless allegation
of fabrication and manipulation of records against the G
College Authorities and how in fact the boot is on their leg.
It is a sad commentary on the scruples of these three
young gentlemen who are on the threshold of their carriers.
In fact, at one stage we were inclined to refer the District·
Judge's report both to the Medical Council as well as the H
..,
474 SUPREME COURT REPORTS [2008] 10 S.C.R.
!
t ""'
A Bar Council for appropriate action but we refrained from
doing so as the petitioners' counsel both on behalf of his .•
clients as well as on his own behalf tendered unqualified
apology and sought mercy from the Court We, however, "
1

part with the case with a heavy heart expressing our strong
)_
B disapproval of their conduct and behaviour ... "
(emphasis supplied)
35. In We/com Hotel v. State ofA.P, (1983) 4 SCC 575,
certain hoteliers filed a petition in this Court under Article 32 of
c the Constitution challenging the maximum price of foodstuffs
fixed by the Government contending that it was uneconomical
and obtained ex parte stay order. The price, however, was fixed
as per the agreement between the petitioners and the Govern-
ment but the said fact was suppressed.
D 36. Describing the fact as material, the Court said:
"Petitioners who have behaved in this manner are not
entitled to any consideration at the hands of the Court".
37. In Agricultural & Process Food Products v. Oswaf Agro
E Furnae, (1996) 4 SCC 297, the petitioner filed a petition in the
High Court of Punjab and Haryana which was pending. Sup-
pressing that fact, it filed another petition in the High Court of
Delhi and obtained an order in its favour. Observing that the
petitioner was guilty of suppression of 'very important fact', this
F Court set aside the order of the High Court.
38. In State of Punjab v. Sarav Preet, (2002) 9 SCC 601,
A obtained relief from the High Court on her assertion that a
test in a particular subject was not conducted by the State. In an
appeal by the State, it was stated that not only the requisite test
G was conducted but the petitioner appeared in the said test and
failed. Observing that the petitioner was under an obligation to
1

disclose the said fact before the High Court, this Court dis-
mirsed the petition.
39. In Union of India v. Muneesh Suneja, (2001) 3 SCC
H
)
\
)
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 475
...... ~
LTD. & ORS. [C.K. THAKKER, J]

92, the detenu challenged an order of detention under the Con- A
~ servation of Foreign Exchange and Prevention of Smuggling
'
Activities Act, 1973 (CO FE POSA) by filing a petition in the High
Court of Delhi which was withdrawn. Then he filed a similar pe-
tition in the High Court of Punjab & Haryana wherein he did not
..4.
disclose the fact as to filing of the earlier petition and withdrawal B
thereof and obtained relief. In an appeal by the Union of India
against the order of the High Court, this Court observed that
non-disclosure of the fact of filing a similar petition and with-
drawal thereof was indeed fatal to the subsequent petition.
40. A special reference may be made to a decision of this c
Court in All India Sate Bank Officers Federation v. Union of
India, 1990 Supp SCC 336. In that case, promotion policy of
the Bank was challenged by the Federation by filing a petition
in this Court under Article 32 of the Constitution. It was sup-
....( 1
ported by an affidavit and the contents were affirmed by the D
President of the Federation to be true to his 'personal knowl-
=(
edge'. It was stated: "The petitioners have not filed any other
similar writ petition in this Honourable Court or any other High
Court".
41. In the counter-affidavit filed on behalf of the Bank, how- E
ever, it was asserted that the statement was 'false'. The Fed-
eration had filed a writ petition in the High Court of Andhra
Pradesh which was admitted but interim stay was refused. An-
other petition was also filed in the High Court of Karnataka. It
was further pointed out that Promotion Policy was implemented F
and 58 officers were promoted who were not made parties to
the petition.

42. In affidavit-in-rejoinder, once again, the stand taken by
the petitioner was sought to be justified. It was stated: "The de-
G
ponent had no knowledge of the writ petition filed before the
High Court of Andhra Pradesh, hence as soon as it came to his
knowledge the same has been withdrawn. Secondly, the peti-
tioners even today do not know the names of all such 58 candi-
dates who have been promoted/favoured". It was contended on
H

':_
K.D. SHARMA v. STEEL AUTHORITY OF INDIA 477
.... '. LTD. & ORS. [C.K. THAKKER, J]

44. 'Deeply grieved' by the situation and adversely com- A
menting on the conduct and behaviour of the responsible offic-
ers of a Premier Bank of the country, the Court observed;
"We have set out the facts in this case at some length and
passed a detailed order because we are deeply grieved
to come across such conduct on the part of an association, B
which claims to represent high placed officers of a premier
bank of this country. One expects such officers to fight
their battles fairly and squarely and not to stoop low to
gain, what can only be, temporary victories QY keeping
away material facts from the court~
.. ltis common knowledge c
that, of late, statements are being made in petitions and
affidavits recklessly and without proper verification not to
speak of dishonest and deliberate misstatements. We,
therefore, take this opportunity to record our strong and
' emphatic disapproval of the conduct of the petitioners in D
this ease and hope that this will be a lesson to the present
petitioner as well as to other litigants and that at least in
future people will act more truthfully and with a greater
sense of responsibility.
(emphasis supplied) E

45. Yet in another case in Vijay Syal & Anr v. .State of
Punjab & Ors., (2003) 9 SCC 401; this Court.stated;

i>i "In order to sustain and maintain sanctity and solemnity of
the proceedings in law courts it is necessary that parties F
should not make false or knowingly, inaccurate statements
or misrepresentation and/or should not conceal material
facts with a design to gain some advantage or benefit at
the hands of the court, when a court is considered as a
place where truth and justice are the solemn pursuits. If G
any party attempts to pollute such a place by adopting
recourse to make misrepresentation and is concealing
material facts it does so at its risk and cost. Such party
must be ready to take consequences that follow on account
of its own making. At times lenient or liberal or generous H
478 SUPREME COURT REPORTS [2008] 10 S.C.R.

A treatment by courts in dealing with such matters are either
mistaken or lightly taken instead of learning proper lesson.
Hence there is a compelling need to take serious view in
such matters to ensure expected purity and grace in the
administration of justice".
B 46. In the case on hand, the appellant has not come for-
ward with all the facts. He has chosen to state facts in the man-
ner suited to him by giving an impression to the Writ Court that
an instrumentality of State (SAIL) has not followed doctrine of
natural justice and fundamental principles of fair procedure. This
C is not proper. Hence, on that ground alone, the appellant cannot
claim equitable relief. But we have also considered the merits
of the case and even on merits, we are convinced that no c~se
has been made out by him to interfere with the action of SAIL,
or the order passed by the High Court.
D
47. For the foregoing reasons, the appeal deserves to be
dismissed and is accordingly dismissed with costs.
K.K.T. Appeal dismissed.

,..