Unfair advantage gained through litigation must be neutralized, rules Supreme Court

On 23 March 2023, Supreme Court in a recent Judgement Bhupinder Singh Vs. Unitech Limited, held that the court should not do anything that harms anyone. If the court makes a mistake or does something wrong, it has a duty to correct it. The principle "actus curiae neminem gravabit" applies, which means that the act of the court should harm no one. In addition, if a party has unfairly gained an advantage by taking legal action, the court should take steps to correct this, as the purpose of legal action is not to give one party an unfair advantage over another.

The present management of Unitech Limited has filed I.A. No. 88960 of 2020, seeking several prayers/directions. These include directing M/s. Devas Global LLP to deposit the entire sale consideration of Rs. 206.50 crores for 26.475 acres of land sought to be purchased by it, directing M/s. Devas Global LLP to either purchase the entire land or provide suitable access to the balance land, directing that M/s. Devas Global LLP shall not create any third party rights on the entire land, and directing legal action be taken against Col. Mohinder Singh Khaira for forgery, cheating, fraud, and criminal conspiracy for submission of Board Resolutions of the Company after its dissolution regarding his own authorization.

The dispute with respect to the sale consideration in respect of 26 acres and 19 guntas of land owned by Unitech Limited in favour of M/s. Devas Global Services LLP located at Kadiganahalli Village, Bangalore, came to be confirmed in favour of M/s. Devas Global Services LLP pursuant to the earlier orders passed by the court. Unitech Limited claims that it was the absolute owner of the land and was entitled to the entire sale consideration of Rs. 172.08 crores. The present application seeks to correct an error committed by the court in directing payment of Rs. 56.11 crores to Shri Naresh Kempanna and Rs. 41.96 crores to Col. Mohinder Khaira out of the sale proceeds of the land sold to M/s Devas Global LLP, without any adjudication of the claims of the aforesaid two persons. The management of Unitech Limited seeks the directions as prayed in the present application even by invoking the principle of restitution.

Shri N. Venkataraman argued on the behalf of Unitech Limited was the absolute owner of a disputed land and that neither Naresh Kempanna nor Col. Mohinder Khaira had any title or ownership rights to it, therefore they were not entitled to any amount from the sale of the land. The respondents, Naresh Kempanna and Col. Mohinder Khaira, opposed this and claimed that they were entitled to receive the amount already disbursed/paid to them based on an earlier court order. The court had directed to pay Rs. 56.11 crores to Naresh Kempanna and Rs. 41.96 crores to Col. Mohinder Khaira out of the sale proceeds of the land sold to M/s Devas Global LLP. However, there were serious disputes on the entitlement of the amount already paid to the respondents. The court acknowledged the mistake/error in its earlier order and decided to correct it based on the principle of restitution.

Supreme Court stated that established legal principles, the court should not do anything that harms anyone. If the court makes a mistake or does something wrong, it has a duty to correct it. The principle "actus curiae neminem gravabit" applies, which means that the act of the court should harm no one. In addition, if a party has unfairly gained an advantage by taking legal action, the court should take steps to correct this, as the purpose of legal action is not to give one party an unfair advantage over another.

The Supreme Court applied the principle of actus curiae neminem gravabit and restitution to the case and directed Shri Naresh Kempanna and Col. Mohinder Khaira to return and deposit the amount paid to them with 9% interest to be deposited with the Registry of the Court within four weeks. However, they are allowed to move appropriate application(s) or proceedings for adjudication of their rights to receive any amount from the sale proceeds of the land sold to M/s Devas Global LLP.

Bhupinder Singh Vs. Unitech Limited