PAPER III:

PRINCIPLES OFEQUITY AND

TRUSTS

UNIT-I: Concept and definition of equity - Origin and development –Position

in
India and England Principal of Equity and Maxims-Application under the
statutes
of India –Equitable powers and jurisdiction of Indian Courts

Unit-II: Maxims of equity: - Equity will not suffer a wrong to be without a

remedy.
- Equity follows the law. - Where there is equal equity, the law shall
prevail. -
Where the equities are equal equity, the law shall prevail. - He who seeks
equity
must do equity. - who comes into equity must come with clean hands.

Unit-III: Maxims of Equity (continued) :- Delay defeats equities. - Equality

is
equity.-Equity looks to intent rather than to the form-Equity looks on that
as done which
ought to be done- Equity imputes an intention to full fill an obligation-
Equity acts
in personam.

Concept and definition of equity - Origin and development

In the legal context, equity refers to a system of principles and doctrines

that supplement or correct common law, focusing on fairness and justice,
especially when the strict application of law would lead to unjust
outcomes. It aims to ensure that outcomes align with principles of
morality and conscience, even if they deviate from strict legal rules.

Here's a more detailed explanation:

Origins and Development:

 England:

Equity originated in England's Court of Chancery, where the Chancellor

acted as the "Keeper of the King's Conscience" to address cases where
common law remedies were inadequate.

 India:

The concept of equity was introduced into India during the British colonial
period and has since evolved, incorporating elements of Hindu law,
Islamic law, and indigenous customs.
Key Features:

 Focus on Fairness:

Equity prioritizes fairness and justice, ensuring that outcomes are just and
equitable, even if they go beyond the strict letter of the law.

 Supplementing Common Law:

Equity acts as a supplement or correction to common law, addressing

situations where common law remedies are insufficient or where strict
legal rules would lead to unfair results.

 Principles and Doctrines:

Equity operates through a set of principles and doctrines, such as specific

performance, equitable estoppel, and granting equitable relief in cases of
undue influence.

 Discretionary Power:

Courts of equity have a degree of discretion in applying these principles,

allowing them to tailor remedies to the specific circumstances of each
case.

 Judicially Enforceable:

Equity principles are judicially enforceable, meaning that they are not
simply moral guidelines but rather legal rules that can be applied in
court.

In India:

 While India does not have separate courts for equity, courts apply
principles of equity and justice when addressing cases where
specific statutes are lacking or where statutory law would lead to
unjust outcomes.

 Several important Indian statutes have incorporated principles of

equity from English law, though not all English equity rules apply in
India.

In essence, equity acts as a bridge between strict legal rules and the
principles of fairness and justice, ensuring that legal outcomes are just
and equitable, even when they deviate from the letter of the law.

India And England:

In both India and England, the law of equity plays a crucial role in
supplementing the strict application of common law, ensuring fairness and
justice when legal remedies are inadequate. While both systems share the
core concept of equity, India's implementation has been shaped by its
unique legal history and influences, differentiating it from its English
counterpart.

England:

 Origin:

Equity in England emerged as a distinct branch of law in the 15th century,

primarily to address the limitations of common law and provide remedies
where common law was insufficient.

 Court of Chancery:

The English Court of Chancery, with its focus on fairness and conscience,
was instrumental in developing and administering equity.

 Key Areas:

Equity is prominent in areas like trusts, and equitable remedies, which are
not readily available under common law.

 Maxims:

Equity is guided by a set of maxims, like "equity follows the law" and
"where the equities are equal, the law shall prevail," which outline its
guiding principles.

India:

 Influence:

The concept of equity in India was introduced during the British colonial
period, with roots in English common law, but has evolved and adapted
over time.

 Role:

Equity in India primarily serves to ensure justice and fairness when

statutory laws are inadequate or lead to unjust outcomes.

 Statutory Incorporation:

While not as distinct as in England, many important Indian statutes

incorporate principles of equity from English law.

 Integration:
Indian courts consider equity and justice in their decision-making, even in
the absence of specific legal provisions.

 Unique Development:

The Indian legal system has also drawn from Hindu law, Islamic law, and
indigenous customs, further influencing its understanding and application
of equity.

Equitable powers and jurisdiction of Indian Courts:

In the Indian legal system, equity jurisdiction refers to the power of courts
to grant remedies or pass orders that ensure fairness and justice, even if
they are not explicitly provided for in statutory law. This power is
particularly important when existing legal provisions are inadequate or fail
to address the specific circumstances of a case.

Elaboration:

 Definition:

Equity jurisdiction involves the authority of courts to act in a manner that

is fair and just, even when it goes beyond the strict letter of the law.

 Purpose:

It allows courts to provide remedies that are necessary to do complete

justice, especially when legal remedies are insufficient or non-existent.

 Inherent Powers:

Civil courts in India can invoke inherent powers under Section 151 of the
Code of Civil Procedure to exercise equity jurisdiction.

 High Courts:

High Courts in India can invoke equity jurisdiction under Section 482 of
the Code of Criminal Procedure.

 Supreme Court:

The Supreme Court also has inherent powers to pass orders "as is
necessary for doing complete justice" in any case, as outlined in Article
142 of the Constitution.

 Examples of Equity:

Courts regularly invoke equity to grant remedies like injunctions, specific

performance, and restitution, especially when statutory law is insufficient.

 Principles of Equity:
Principles of equity, such as "no man can take advantage of his own
wrong," are often applied by Indian courts.

 Limits on Equity:

While equity jurisdiction is broad, courts have imposed limits on its use to
prevent misuse. These limits are often based on evolving principles or
equity maxims.

Maxims of equity:

Maxims of equity are fundamental principles that guide the application of

equitable remedies and ensure fairness when strict legal rules may lead to
unjust outcomes. They are not rigid rules but rather general guidelines
that courts use to decide cases fairly.

Key Maxims of Equity:

 Equity follows the law:

Equity generally does not contradict the law, but rather supplements it to
achieve fairness.

 Equity aids the vigilant:

Those who are diligent in asserting their rights will be aided by equity,
while those who are slow or neglectful may not receive relief.

 Equity looks to the intent rather than the form:

Equity focuses on the substance and intent of an agreement or action,

rather than the strict legal form.

 He who seeks equity must do equity:

A party seeking equitable relief must act fairly and justly themselves.

 He who comes to equity must come with clean hands:

A party seeking equity must not have acted unconscionably or unfairly in

their own dealings.

 Equity will not suffer a wrong to be without a remedy:

Equity provides remedies when common law is inadequate to address a

situation.

 Equality is equity:

When there are multiple equal claims, equity will strive for equal division
of the benefit.

 Where the equities are equal, the first in time prevails:

If two parties have equal claims, the one with the earlier claim in time will
usually be favored.

 Equity acts in personam:

Equity primarily acts on individuals, requiring them to act in accordance

with their obligations, rather than directly affecting property rights.

These maxims provide a framework for courts to exercise their discretion

and ensure that justice is done in a manner that is fair and equitable,
particularly when strict legal rules might lead to unfair or unjust
outcomes.

Delay defeats equities:

The phrase "delay defeats equities" is a legal principle, often stated as

"equity aids the vigilant and not the indolent," meaning that unreasonable
delay in pursuing a claim or right can prevent a person from obtaining
equitable relief. This principle, also known as "laches," emphasizes the
need for reasonable diligence and prompt action in seeking justice.

Elaboration:

 Laches:

Laches refers to the unreasonable delay or inaction of a party in asserting

their rights, which can lead to the court denying equitable relief.

 Equitable Relief:

This refers to remedies beyond those provided by common law, such as

specific performance of a contract or the issuance of an
injunction, according to Study.com.

 Vigilant vs. Indolent:

The principle highlights that equity Favors those who are proactive and
prompt in asserting their rights (vigilant) over those who are slow or
inactive (indolent).

 Reasonable Time:

The specific timeframe that constitutes "unreasonable delay" can vary

depending on the circumstances, but generally, it refers to a delay that is
disproportionately long and prejudicial to the other party.
  Loss of Evidence:

A consequence of delay is the potential loss or destruction of evidence,

which can hinder the ability to prove a case and justify denial of equitable
relief.

Equality is equity:

No, equality and equity are not the same. Equality means treating
everyone the same, while equity means treating everyone differently to
achieve a fair outcome. Equity recognizes that individuals have different
needs and circumstances and therefore may require different levels of
support to achieve equal outcomes.

Here's a more detailed explanation:

Equality:

 Focus:

Treating everyone the same.

 Assumption:

Everyone has the same starting point and needs the same resources to
succeed.

 Example:

Giving everyone the same amount of money, regardless of their income or

needs.

 Potential Outcome:

Can lead to unfair outcomes if people have different needs or

circumstances.

Equity:

 Focus: Treating people fairly based on their needs.

 Assumption: People may need different levels of support to

achieve equal outcomes.

 Example: Providing more resources to low-income students to help

them succeed in school.

 Potential Outcome: Can lead to more equitable outcomes by

addressing systemic inequalities and ensuring everyone has the
resources they need to thrive.

Analogy:
Imagine a group of people watching a race. If they all stand on the
ground, some will be unable to see.

 Equality:

Giving everyone the same small box to stand on. Everyone gets the same
support, but some might still be unable to see.

 Equity:

Giving each person a box that allows them to see, even if it's a different
size. This ensures everyone has the same opportunity to see, even if they
start from different heights.

Equity imputes an intention to full fill an obligation:

The maxim "equity imputes an intention to fulfil an obligation" means that

if someone has a legal or moral obligation to do something, and they do
something that's considered a reasonable equivalent of fulfilling that
obligation, equity (a system of law focused on fairness) will treat the act
as fulfilling the obligation, according to iPleaders Blog.

Elaboration:

 Obligation:

This refers to a duty or responsibility imposed by law, contract, or even a

sense of moral obligation.

 Intention:

Equity considers the intent of the person, not just the strict letter of the
law.

 Reasonable Equivalent:

If someone does something that is a close enough approximation of

fulfilling the obligation, equity will treat it as a fulfillment, says iPleaders
Blog.

 Example:

If a person owes money to someone and instead leaves them a legacy (a

gift in a will) that covers the amount of the debt, equity will likely consider
the legacy as satisfaction of the debt, even if they didn't technically pay it
off during their lifetime, according to iPleaders Blog.

In essence, this maxim reflects a broader principle of equity, which is to

ensure fairness and prevent injustice by looking at the substance of an
action rather than just its form,