MAXIM OF EQUITY

Maxims of equity are legal maxims that serve as a set of general principles or rules which are said to govern the way in which equity operates. They tend to illustrate the qualities of equity, in contrast to the common law, as a more flexible, responsive approach to the needs of the individual, inclined to take into account the parties’ conduct and worthiness. They were developed by the English Court of Chancery and other courts that administer equity jurisdiction, including the law of trusts. Although the most fundamental and time honored of the maxims, listed on this page, are often referred to on their own as the ‘maxims of equity’ or ‘the equitable maxims’, it cannot be said that there is a definitive list of them. Like other kinds of legal maxims or principles, they were originally, and sometimes still are, expressed in Latin.

“Maxims are the proverbs of the law. They have the same merits and defects as other proverbs, being brief and pithy statements of partial truths. They express general principles without the necessary qualifications and exceptions, and they are therefore much too absolute to be taken as trustworthy guides to the law. Yet they are not without their uses. False and misleading when literally read, these established formulae provide useful means for the expression of leading doctrines of the law in a form which is at the same time brief and intelligible.” According to Justice Stephen: “They are rather minims than maxims, for they give not a particularly great, but a particularly small amount of information. As often as not the exceptions and qualifications are more important than the so-called rules, which while they mostly serve as good indexes to the law, are mostly bad abstracts of it.” There are twelve such maxims but the overlapping is so much so that “it would not be difficult to reduce them all under the first and the last”. The maxims give a clue to just and reasonable interpretation.

The twelve maxims are individually discussed hereunder:

  1. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY
  2. Meaning – Where there is a right, there is a remedy. This idea is expressed in the Latin maxim ubijus ibi remedium. It means that no wrong should go unredressed if it is capable of being remedied by courts. This maxim indicates the width of the scope and the basis on which the structure of equity rests.
  3. Recognition in Indian subcontinent – The Trusts Act, Section 151 of the Civil Procedure Code and the Specific Relief Act in Indian subcontinent has incorporated the above principles. The Civil Procedure Code entitles a civil court to entertain all kinds of suits unless they are prohibited. The Specific Relief Act provides for equitable remedies like specific performance of contracts, rectification of instruments, injunctions and declaratory suits. It can be said that the writ provisions hi the Constitution, the Administrative Law and the Public Interest Litigation devices have now extended the scope and effective working of this maxim.
  4. EQUITY FOLLOWS THE LAW
  5. Meaning – The maxim indicates the discipline which the Chancery Courts observed while administering justice according to conscience. Equity had come not to destroy the common law but to fulfill it.
  6. Recognition in Indian subcontinent – Equity rules in Indian subcontinent, cannot override the specific provisions of law. As for example, every suit in India has to be brought within the limitation period and no judge can create an exception to this or can prolong the time-limit or stop the rule from taking effect on principles of equity21. Similarly no court can confer rights which can be acquired only by registration of a document, on a party, without getting the document registered.

In Appa Narsappa Magdum case, it was contended that the provisions of Land Reform Acts being welfare, legislation enacted for the benefits of tenants should be construed in a liberal manner. This was rejected by the Supreme Court of India holding that, the provisions of law regarding the period within which tenant must exercise right to purchase land of widow landlady being clear, relief cannot be granted on the basis of Equity. Where law is clear no equitable relief is warranted.

  1. HE WHO SEEKS EQUITY MUST DO EQUITY
  2. Meaning —The maxim means that to obtain an equitable relief the plaintiff must himself be prepared to do “equity”, that is, a plaintiff must recognize and submit to the right of his adversary.
  3. Recognition in Indian subcontinent – There are some sections of The Contract Act, The Transfer of Property Act, Specific Relief Act and Trusts Act, Civil Procedure Code are based on this maxim.
  4. HE WHO COMES INTO EQUITY MUST COME WITH CLEAN HANDS
  5. Meaning—Equity, as it was based on good faith and conscience, demanded fairness, uprightness and good faith not only from the defendant but also from the plaintiff.
  6. Recognition in Indian subcontinent – This maxim also has recognition in Indian Subcontinent. In Section 23 of the Trust Act, Section 22,24,25,26,28,56 of the Specific Relief Act are based on this maxim.
  7. DELAY DEFEATS EQUITIES
  8. Meaning – Where an injured party has been slow to demand a remedy for a wrong which he has for a long time regarded with apparent indifference, the court will decline to give him that remedy on grounds of public policy. In the famous words of Lord Camden, L.C., “a court of equity has always refused its aid to stale demands, where a party has slept upon his right and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith and reasonable diligence; where these are wanting, the court is passive, and does nothing.”
  9. Recognition in Indian subcontinent – This doctrine has no general application to India but has only a limited scope.
  10. EQUALITY IS EQUITY
  11. Meaning – The maxim expresses the object of both law and equity in order to effectuate a distribution of property and losses, proportionate to several claims and liabilities of the parties concerned. Equality therefore means proportionate equality.
  12. Recognition in Indian subcontinent – The maxim have been recognized in India under various enactments – Contract Act, Section 42, illustrates tenancy in common as regards devolution of liabilities, Section 43 illustrates that one of a number of joint promisors who has performed the promise is entitled to compel the other promisors to contribute equally with him, Sections 69 and 70 illustrate the doctrine of marshalling, Sections 146 and 147 explain that co-sureties are liable to contribute equally, Under the Transfer of Property Act, Section 56 illustrates the doctrine of marshalling, Section 82 speaks about contribution to mortgage debt by    co-mortgagors, Section 330 of the Succession Act incorporates and illustrates the principle of rate able distribution of assets explaining that the legacies abate rate ably, (viii) Under the Indian Trusts Act, Section 27, there is contribution also as between co-trustees, Section 73 of the Civil Procedure Code, Section 45 of the Transfer of Property Act also illustrates the incorporation and application of this principle.
  13. EQUITY LOOKS TO THE INTENT RATHER THAN THE FORM
  14. Meaning – It means it looks to the intention of parties and not to the words, and it looks to the realities rather than to mere appearances.
  15. Recognition in Indian subcontinent – This maxim has been recognized in Sections 55 and 74 of Contract Act and Sections 114 and 114-A of Transfer of Property Act.
  16. EQUITY LOOKS ON THAT AS DONE WHICH OUGHT TO BE DONE
  17. Meaning – As between two persons, where one of them has incurred an obligation and undertaken upon himself to do something for the other, the equity courts look on it as done and as producing the same results as if the obligation or undertaking had been actually performed.
  18. Recognition in Indian subcontinent – The principle contained in the maxim has been recognized in the following enactments, Section 40 of the Transfer of Property Act, Section 12 of the Specific Relief Act, Section 53-A of the Transfer of Property Act, Section 91 of the Trust Act.
  19. EQUITY IMPUTES AN INTENTION TO FULFIL AN OBLIGATION
  20. Meaning – Equity courts came into existence to do justice. They firmly believed that a person must be prepared to do what is right and fair. As the old saying goes, one must be just before one professes to be generous. It is on this accepted dictum that equity considered estimated and construed acts of parties.
  21. Recognition in Indian subcontinent – Sections 177, 178 and 179 of the Succession Act make a deliberate departure from the English doctrine of satisfaction. Section 92 of the Trust Act puts into practice the principle of this maxim.
  22. WHERE THERE IS EQUAL EQUITY, THE LAW SHALL PREVAIL
  23. WHERE THE EQUITIES ARE EQUAL, THE FIRST IN TIME SHALL PREVAIL These two maxims relate to the question of priority.
  24. EQUITY ACTS IN PERSONAM
  25. Meaning – Courts of equity, described as courts of conscience, operate primarily in personam binding the conscience of a person and thus bringing an individual’s conscience under its sway. Its decrees were regarded not merely as decisions concerning the rights and properties in dispute but as decrees, decisions, and directions, positive or negative, addressed to the individual party or parties. Thus on one side an individual’s conscience was sought to be bound and on the other, the Chancellor exercised his jurisdiction guided according to his own conscience. This maxim being descriptive of the Equity Courts’ procedure covers a large portion of its procedural and remedial action.
  26. Recognition in Indian subcontinent – According to opinions of many learned text writers22no such jurisdiction is recognized by Indian courts while according to some, the courts in India have but limited powers of making a decree in personam. The opinions are thus divided. The Civil Procedure Code, Section 16 does not deal with this problem; it explains the division of jurisdiction of the municipal courts only. Till now we have no such decisions bearing directly on this issue. Though courts in India have limited powers of making a decree in personam. Equity may act in personam in India too. The proviso to Section 16 of the Civil Procedure Code is thus an application, though in a highly modified form, of the maxim “equity acts in personam”.23

3.4 Application of English equity to the laws of Indian Sub continent

  1. Cases wherein it was successfully applied – On the basis of the principles of Justice, Equity and Good Conscience the Courts successfully applied the principles of English law in the following cases.

In the first case a Muslim created a charge on his property by deposit of title deeds in favour of an Armenian. After some time the Muslim transferred the property in favour of a Hindu who in turn transferred it to a British subject. The Armenian filed a suit against all in the S.D.A. of Madras but the court dismissed it holding that the doctrine of constructive notice was not applicable in India. However the Privy Council, in appeal, held that direction to act according to Justice, Equity and Good Conscience required that the principles of English law so that right created by deposit of title deeds could be deprived only by a subsequent bonafide purchaser for value without notice should be applied. The decision of the S.DA. was therefore reversed.24The Bombay High Court followed this decision and applied the principle in Dada Honaji v. Babaji25. In Waghela Rajsanji v. Shekh Masluddin26 a question was raised whether a guardian was competent to make covenants on behalf of the ward so as to create a personal liability on the ward. Applying the principles of English law on grounds of Justice, Equity and Good Conscience the Privy Council held that it would be improper to uphold the validity of such a covenant. In one case27 the land was washed away by Ganges and later it was formed again. Applying the principles it was held that the land regained belonged to the owner. In the famous case of Ram Coomar v. Macqueen28 the Privy Council applied the principle of estoppel by holding out. The principle is-that where a person who is the real owner of property allows another to hold himself as the owner and that when a third person purchases the property believing that the apparent owner is the real owner, the latter was debarred to assert his undisclosed or secret title, in the absence of the knowledge on the part of the purchaser about the title of the real owner. In yet another important decision the Privy Council recognized the right of the Crown to escheat the property of a deceased Brahmin.29 According to Hindu law this could not be done but that principle was excluded. Besides the principle of the clog on-the equity of redemption66 and restriction on alienation of property to strangers, and that transfer should be only to any one of the relatives were held valid and applied.30

  1. Statutes or Acts wherein it was successfully applied – Statutory recognition of the principles Of equity is found in the The Specific Relief Act, 1877, The Transfer of Property Act, 1882, The Law of Contract, 1872 , Guardian and Wards Act, 1890, The Trust Act, 1882, The Code of Civil Procedure, 1908, The Code of Criminal Procedure, 1898. In these Acts which principles of equity are applied is discussing bellow –

The Specific Relief Act, 1877 – The provisions of the Act regarding Sections 12-44, 52 -57, recognize, the principles of equity to a large extent, such as, which contract can be specifically enforced (section 12 – 20), which contract cannot be specifically enforced (section 21 – 30), Rectification of Instrument (section 31 – 34), Rescission of contract (section 35 -38), Cancellation of instrument (section 39-41), Declaratory suit (section 42), Result of Declaratory suit (section 43), Appointment of receiver (section 44), Preventive relief (section 52 – 57).

The Transfer of Property Act, 1882 – This Act has also included many doctrines of equity. Apart from such doctrines Sections 48 – 51 of the present Act is based on the principles of equity. The English equitable doctrine of part performance has also been drawn in section 53A of the Act. Doctrine of Election (section 35), Feeding the grant by estoppel (section 43), Fraudulent transfer (section 53) also accepted from equity.

The Law of Contract, 1872 – There are certain equitable doctrines which have been imported in the Act and some of the important doctrines relating generally to the law of contract are the doctrine of penalties and forfeitures, stipulation as to time in a contract, equitable relief on ground of misrepresentation, fraud and undue influence. Section 64 and 65 of this Act is nothing but the codified form of the maxim, He who seeks equity must do equity.

Guardian and Wards Act, 1890 – hi some sections of this Act import principles of equity.

The Trust Act, 1882 – This Act mainly the creation of equity. The rules contained in this Act are substantially the same which were administered at the time by English courts of equity under the name of justice, equity and good conscience.