# M/s Genius Ortho. Indus., Ghaziabad v. U.O.I. & Ors

- **Citation:** (2024) 3 ILRA 1786
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-29
- **Case number:** Writ Tax No. 542 of 2023
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-genius-ortho-indus-ghaziabad-v-u-o-i-ors-51619
- **Pages:** 5

## Headnote

Constitution of India,1950 Article 226 -
writ petition - cancellation of GST registration
- physical verification - no business activity
being carried out at the premises - show cause
notice - appeal dismissed - new registration
obtained
subsequent
to
cancellation
-
suppression of material fact - no averment in
the writ petition - Court hoodwinked - sheer
wastage of time of the authorities - fraud -
fraudulent concealment - doctrine of clean
hands - suppression of material facts -
discretionary jurisdiction - petitioner not acting
in good faith - writ petition dismissed - liberty
to approach any other forum.

Writ petition dismissed. (E-9)

Cases Cited:

## Text

1786 INDIAN LAW REPORTS ALLAHABAD SERIES

7. The instant writ petition is allowed
in aforesaid terms. There shall be no order
as to the costs.
----------
(2024) 3 ILRA 1786
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 542 of 2023

M/s Genius Ortho. Indus., Ghaziabad
 ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Hari Shanker Srivastava, Sri Nikhil Srivastava

Counsel for the Respondent:
Sri Sudharshan Singh, Sri Amit Mahajan

Constitution of India,1950 Article 226 -
writ petition - cancellation of GST registration
- physical verification - no business activity
being carried out at the premises - show cause
notice - appeal dismissed - new registration
obtained
subsequent
to
cancellation
-
suppression of material fact - no averment in
the writ petition - Court hoodwinked - sheer
wastage of time of the authorities - fraud -
fraudulent concealment - doctrine of clean
hands - suppression of material facts -
discretionary jurisdiction - petitioner not acting
in good faith - writ petition dismissed - liberty
to approach any other forum.

Writ petition dismissed. (E-9)

Cases Cited:

1. Bhriguram De v. State of West Bengal and
others, (2018) SCC OnLine Cal 8141.

2. S.J.S. Business Enterprises (P) Ltd. v. State of
Bihar, (2004) 7 SCC 166.
3. S.P. Chengalvaraya Naidu (Dead) by LRs v.
Jagannath (Dead) by LRs, (1994) 1 SCC 1.

4. Chittaranjan Das v. Durgapore Project Ltd.,
99 C.W.N. 897.

5. Asiatic Engineering Co. v. Achhru Ram, AIR
1951 Allahabad 746 (FB).

6. Indian Bank v. Satyam Fibres (India) Pvt.
Ltd., (1996) 5 SCC 550.

7. The King v. Williams, (1914) 1 K.B. 608.

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. Heard learned counsel appearing on
behalf of the petitioner, Sri Sudarshan
Singh, learned counsel appearing on behalf
of respondent No.1 and Sri Amit Mahajan,
learned counsel appearing on behalf of
respondent Nos. 2 and 3.

2. Physical verification report filed by
the learned counsel for the respondents in
Court today be kept on record.

3. This is a writ petition under Article
226 of the Constitution of India wherein the
petitioner is aggrieved by the order dated
February 27, 2023 passed by the Joint
Commissioner, C.G.S.T. (Appeal), Meerut
cancelling its GST registration.

4. The ground for cancelling the GST
registration of the petitioner was that upon
physical verification, it was found by the
authorities that no business activity was
being carried out at the said premises.
Authorities also called the proprietor on
several occasions but his phone was
switched off and he did not picked up the
calls. A show cause notice was issued by
the Department, which was replied by the
petitioner and subsequently the order
cancelling the registration was passed.
Against the order cancelling registration,
3 All. M/s Genius Ortho. Indus., Ghaziabad.Vs. U.O.I. & Ors.
1787
the petitioner went up in appeal and the
said appeal was also dismissed after
passing a detailed order.

5. Counsel appearing on behalf of the
respondents submits that there has been
suppression of material fact, as the
petitioner has not revealed before this
Court that a new registration was obtained
by the petitioner subsequent to cancellation
of the earlier registration.

6. The Court having heard the learned
counsel appearing on behalf of the
petitioner had directed for verification of
the premises without having knowledge of
the fact that a new registration has been
obtained
by
the
petitioner.
In
the
verification, which was done pursuant to
the order of this Court dated February 22,
2024, it was found that the factory was
operational and the proprietor informed the
authorities that he had obtained a new
registration prior to filing of the writ
petition.

7. I am of the view that having
obtained a new registration was a material
fact that should have been brought into the
knowledge of this Court. In fact, the Court
was hoodwinked by the petitioner in
passing an order for verification of the
premises by the authorities. The fact that
neither was there any averment in the writ
petition nor the counsel for the petitioner
informed the Court that a new registration
has been obtained resulted in sheer wastage
of time of the authorities in carrying out the
second verification.

8. I had the occasion to deal with the
aspect of suppression of material facts in
Bhriguram De v. State of West Bengal
and others reported in (2018) SCC
OnLine Cal 8141 wherein I had examined
the aspect of fraud, fraudulent concealment
and doctrine of clean hands in great detail.
One may delineate the relevant paragraphs
of the said judgment below:

"13.'Fraud', according toBlack's
law Dictionary, 10thEdition, is a knowing
misrepresentation or knowing concealment
of a material fact made to induce another
to act to his or her detriment; a reckless
misrepresentation made without justified
belief in its truth to induce another person
to act; a tort arising from a knowing or
reckless misrepresentation or concealment
of material fact made to induce another to
act to his or her detriment.

14."Fraudulent concealment" as
defined
inBlack's
law
Dictionary,
10thEdition, is the affirmative suppression
or hiding, with the intent to deceive or
defraud, of a material fact or circumstance
that one is legally (or, sometimes, morally)
bound to reveal.

15.According to theLaw Lexicon,
Third Edition (2012), the Latin Maxim
"Suppressio veri, suggestio falsi" defines
that the suppression of the truth is
equivalent to the suggestion of falsehood.
The suppression or failure to disclose what
one party is bound to disclose to another,
may amount to fraud. Where a person is
found to be guilty ofsuppressio veri
suggestio
falsifor
having
concealed
material information from scrutiny of the
Court, he is not entitled for any equitable
relief under order 39 of CPC (5 of 1908).
[Arbind Kumar Palv.Hazi Md. Faizullah
Khan, AIR 2007 (NOC) 1035 (Pat) : (2006)
1 BLJR 430].

16.The maxim that one who
comes to Court must come with "clean
hands" is based on conscience and good
faith. The maxim is confined to misconduct
in regard to, or at all events connected
with, the matter in litigation. "Clean
1788 INDIAN LAW REPORTS ALLAHABAD SERIES
hands" means a clean record with respect
to the transaction with the defendant, and
not with respect to any third person.

17.As authored by Ruma Pal, J.
inS.J.S. Business Enterprises (P) Ltd.v.State
of
Biharreported
in(2004)
7
SCC
166[Coram: Ruma Pal and P. Venkatarama
Reddi, J.J.], suppression of a material fact
by a litigant disqualifies such litigant from
obtaining any relief. The relevant portion is
provided below:

"13.
As
a
general
rule,
suppression of a material fact by a litigant
disqualifies such litigant from obtaining
any relief. This rule has been evolved out of
the need of the courts to deter a litigant
from abusing the process of court by
deceiving it. But the suppressed fact must
be a material one in the sense that had it
not been suppressed it would have had an
effect on the merits of the case. It must be a
matter which was material from the
consideration of the court, whatever view
the court may have taken........"

18.InS.P. Chengalvaraya Naidu
(Dead) by LRsv.Jagannath (Dead) by
LRsreported in(1994) 1 SCC 1[Coram:
Kuldip Singh and P.B. Sawant, J.J.], the
Supreme Court came down heavily on
petitioners filing cases based on falsehood
and suppression and observed as follows:

"5. .......The Courts of law are
meant for imparting justice between the
parties. One, who comes to the Court, must
come with clean hands. We are constrained
to say that more often than not, process of
the Court is being abused. Propertygrabbers, tax-evaders, bank-loan dodgers
and other unscrupulous persons from all
walks of life find the court-process a
convenient lever to retain the illegal gains
indefinitely. We have no hesitation to say
that a person, whose case is based on
falsehood, has no right to approach the
Court. He can be summarily thrown out at
any stage of litigation.

6. ....... A fraud is an act of
deliberate deception with the design of
securing something by taking advantage of
another. It is a deception in order to gain
by another's loss. It is a cheating intended
to get an advantage of another ..... ... A
litigant, who approaches the Court, is
bound to produce all the documents
executed by him, which are relevant to the
litigation. If he withholds a vital document
in order to gain advantage on the other
side then he would be guilty of playing
fraud on the Court as well as on the
opposite party."

19.In a well-known Calcutta High
Court case inChittaranjan Dasv.Durgapore
Project
Ltd.reported
in
99
C.W.N.
897[Coram:
Satya
Brata
Sinha
and
Basudeva Panigrahi, J.J.], the Court
observed
at
paragraph
64
that
"Suppression of a material document
which affects the condition of service of the
petitioner, would amount to fraud in such
matters. Even the principles of natural
justice are not required to be complied with
in such a situation. It is now well known
that a fraud vitiates all solemn acts."

20.InAsiatic
Engineering
Co.v.Achhru Ramreported in AIR 1951
Allahabad 746 (Full Bench)[Coram: Malik,
C.J., Sapru and V. Bhargava, J.J.], the
Court observed that no relief can be
granted in a writ petition under Article 226
which is based on misstatement or
suppression of material facts. The Court
observed in paragraph 51, at page 767 as
follows:

"51. In our opinion, the salutary
principle laid down in the cases quoted
above should appropriately be applied by
Courts in our country when parties seek the
aid of the extraordinary powers granted to
the
Court
under
Art.
226
of
the
3 All. M/s Genius Ortho. Indus., Ghaziabad.Vs. U.O.I. & Ors.
1789
Constitution. A person obtaining anex
parteorder or arule nisiby means of a
petition for exercise of the extraordinary
powers under Art. 226 of the Constitution
must come with clean hands, must not
suppress any relevant facts from the Court,
must refrain from making misleading
statements and from giving incorrect
information to the Court. Courts, for their
own protection, should insist that persons
invoking these extraordinary powers should
not attempt, in any manner, to misuse this
valuable right by obtainingex parteorders
by
suppression,
misrepresentation
or
misstatement of facts."

21.InIndian Bankv.Satyam Fibres
(India) Pvt. Ltd.reported in(1996) 5 SCC
550: J.T. 1996 (7) SC 135[Coram: Kuldip
Singh & S. Saghir Ahmad, J.J.], the Apex
Court further observed as follows:

"23. Since fraud affects the
solemnity, regularity and orderliness of the
proceedings of the Court, it also amounts to
an abuse of the process of the Court, that
the Courts have inherent power to set aside
an order obtained by practising fraud upon
the Court, and that where the Court is
misled by a party or the Court itself
commits a mistake which prejudices a
party, the Court has the inherent power to
recall its order."

22.Similar principles have been
enunciated
in
English
cases.
InThe
Kingv.Williamsreported in(1914) 1 K.B.
608[Coram: Channell, Rowlatt, Atkin,
J.J.], the Court observed at page 614 as
follows:

"....... In my view the writ is
discretionary. A party may by his conduct
preclude himself from claiming the writ ex
debito justitiae, no matter whether the
proceedings which he seeks to quash are
void or voidable. If they are void it is true
that no conduct of his will validate them;
but such considerations do not affect the
principles on which the Court acts in
granting or refusing the writ of certiorari.
This special remedy will not be granted ex
debito justitiae to a person who fails to
state in his evidence on moving for the rule
nisi that at the time of the proceedings
impugned he was unaware of the facts on
which he relies to impugn them."

23.As seen from the various
judgments discussed above, the Indian and
English Courts have consistently taken the
view that one who approaches the Court
must come with clean hands. It is the
bounden duty of the Court to keep the
stream of justice absolutely clean. Anyone
who approaches must give full and fair
disclosure of all the materials. The Courts
must not allow anyone to abuse the court
process. In case the petitioner conceals
anything that is known to be material such
an action would lead to an inference of
fraud, and even if not fraud, definitely
would lead to a presumption that the
petitioner has not approached the court
with clean hands."

9. Article 226 of the Constitution of
India is a discretionary jurisdiction which is
to be exercised for petitioners who are
acting in a good faith. The principle of
uberrima fides requires a party that comes
to a Court to act in utmost good faith. The
above principle is the genesis of the
expectation of the Court to pass orders at
the behest of the petitioner who has
approached the Court with clean hands.
The moment this trust is broken and it is
discovered that there is suppression of
material facts, the Court is bound to
dismiss the said petition without granting
any relief whatsoever to the petitioner.

10. In light of the same, this writ
petition is dismissed on the ground of
suppression of material facts. The petitioner
1790 INDIAN LAW REPORTS ALLAHABAD SERIES
shall be at liberty to approach any other
forum for appropriate relief.
-----------
(2024) 3 ILRA 1790
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.12.2023

BEFORE

THE HON'BLE AJAY BHANOT, J.

Writ Tax No. 804 of 2022

Prakash Chandra ...Petitioner
Versus
The State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Neeraj Sharma, Sri Abhishek Sharma, Ms.
Manisha Sharma

Counsel for the Respondent:
C.S.C.

U.P. Excise Act, 1910 - Section 7 - foreign
liquor license - adulterated liquor recovered
from employee in conscious possession -
statement admitting liquor taken out from
licensed shop and diluted for sale - licensee
liable for actions and omissions of salesman -
vicarious liability - sale of liquor not a
fundamental right - violation of provisions of
the Act, Rules and terms of license - principles
of natural justice duly adhered to - no error of
fact .
Writ petition dismissed. (E-9)

(Delivered by Hon'ble Ajay Bhanot, J.)

Foreign liquor license of the petitioner
was cancelled by order dated 22.06.2021.
The said order of cancellation was carried
in appeal and thereafter in revision with no
better
results.
The
petitioner
is
consequently aggrieved by the orders of
appellate and revisioning authority dated
12.10.2021 and 13.04.2022 respectively.

Shri Neeraj Sharma, learned counsel
assisted by Shri Abhishek Sharma, learned
counsel for the petitioner submits as
follows:

1. The liquor was not found from the
possession of the licensee and nor from the
premises of the liquor shop.

2. The adulterated liquor was
recovered from an employee of the
petitioner.
The
petitioner
cannot
be
vicariously responsible for the action of his
employees.

3. No FIR was got lodged which
shows that the applicant had not committed
any offence. The shop was closed on the
date of search and seizure.

4. The cancellation of license is in
excess of the powers conferred under Rule
18 of the U.P. Excise Settlement of
Licenses for Retail Sale of Foreign Liquor
(Excluding Beer and Wine) Rules, 2001
(herein after referred to as 'the Rules'). As
per Rules 18-ka, licenses can be cancelled
only in case liquor bottles are found in the
premises of the liquor shop.

Shri Ravi Shanker Pandey, learned
Additional
Chief
Standing
Counsel
contends that the licensee had breached the
conditions of the license. There is no
fundamental right to trade any liquor. The
licensee had breached the terms of the
license. The liquor was found in the
conscious possession of the sales person
who was admittedly employed by the
petitioner. The said liquor was adulterated
and could not be accounted for. The
principles of natural justice were duly
observed in the proceedings. Licensees are
expected to adhere strictly to the terms of
the
license
and
observe
relevant