Concealing material facts an abuse of Court's process: SC

New Delhi, Aug 21 (UNI) The Supreme Court today held that suppressing or concealing material facts or distorting them amounts to abuse of the process of the court and it can refuse to entertain such petitions without entering into the merits of the case.

The ruling was handed down by a Bench comprising Justices C K Thakker and Altamas Kabir while dismissing the appeal of Prestige Lights Ltd with costs against the action of the State Bank of India (SBI) seeking to recover its dues by auctioning the mortgage properties under Section 13 (2) of the Securitisation, Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The company had challenged the action of the Bank seeking to recover the loan of Rs 85 lakhs extended to the Dehra Dun-based company.

Uttarakhand High Court has dismissed the writ petition of the company limine.

The apex court stayed the disposition of the Director of the company Sudha Goel, subject to the condition that the company will pay an installment of Rs 20 lakh per month to the Bank, but the court's order were not complied with.

The apex court in its judgement of August 20 noted, ''If the applicant does not disclose full facts or suppresses relevant material or is otherwise guilty of misleading the court, it may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscruplous litigants from abusing the process of court by deceiving it''.

The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted the very functioning of the writ courts would become impossible, the Bench added.

In the case several facts have been suppressed by the appelent company and collusive action has been taken with a view to deprive the respondent Bank from realising legal and legitimate dues to which it was otherwise entitled.

The company had never disclosed that it had created third parties interest in the property mortgaged with the Bank. It had also shifted machinery and materials without informing the respondent Bank prejudicially affecting the interests of the Bank.

The court, however, held that even a party facing allegations of disobeying orders of the court which amounts to contempt of court has the right to be heard.

The court concluded by holding that ''for the foregoing reason we hold that by dismissing the petition limine, the High Court has neither committed an error of law nor of jurisdiction. The appelent company is not entitled to any relief. The appeal, therefore deserves to be dismissed and is accordingly dismissed with costs.'' UNI