Updated: Thursday January 14, 2010/AlKhamis Muharram 29, 1431/Bruhaspathivara Pausa 24, 1931, at

07:05:32 PM

Course Contents:

1.Principles of Equity Including Maxims of Equity as given in Snell on Equity.

Books Recommended:

1.The Maxims of Equity by Ch. Rahim Bakhsh.

2.Equity by Snell.

3.Osborns Concise Law Dictionary, Sixth Edition by John Burke.

4.Equity, Trust, & Specific Relief by B. M. Gandhi.

Interest protected by society is social right while interest protected by law is legal right. Right become valid by
performing duties towards others, i.e., compliance of duties to fulfill obligations.

Definition: Plato termed equity as equity is a necessary element supplementary to the imperfect
generalization of legal rules.

Aristotle expressed equity as eternal and immutable and reiterated that the equitable is just and better than
one kind of justice not better than absolute justice, but better than the error that arises from the absoluteness
of the statementit is a correction of legal justice.

Blackstone defines equity as the soul and spirit of all law.

West, J., describing equity as an intellectual energy, expressed that it moulds its deductions from one set of
data as the common law to another into continued adaptation to the growing need of society.

According to Snell, equity is a portion of natural justice which, although of a nature suitable for judicial
enforcement, was for historical reasons not enforced by the Common Law courts, and omission which was
supplied by the Court of Chancery.

Story defines it as that portion of remedial justice which was exclusively administered by a Court of equity as
contradistinguished from that portion of remedial justice which was exclusively administered by a Court of
Common Law.

Maitland says that we ought not to think of Common Law and equity as of two rival systems but, we ought
to think of equity as supplementary law, a sort of appendix added to our code, or a sort of gloss written round
our codewhich used to be administered by the High Court of Justice as part of the code.

Osborns Law Dictionary says primarily fairness to natural justice. A fresh body of rules by the side of the
original law, founded on distinct principles, and claiming to supersede the law in virtue of a superior sanctity
inherent in those principles. Equity is the body of rules formulated and administered by the Court of Chancery
to supplement the rules and procedure of the common law.

Equity is a sort of justice, which was emerged in England besides from Common Law, which was the
responsibility of the Common Law Courts. There were many issues, which were not fallen in the jurisdiction of
the Common Law Courts. They were referred towards King who was responsible to provide justice. He was
decided the cases on the principles of natural justice. Natural Justice is based on good consciousness, honesty,
equality, truth, uprightness, good faith, fairness, ethics, and morality etc. Later on when the cases exceeded
then King delegated this power of administration of justice on his behalf to the Chief of the House of
Commons, named Chancery. This Court was called Chancery Court and was responsible for the administration
of justice on the base of principles of natural justice, which has been described earlier. Basic principle of the
equity is that one must be given that for which he is entitled. Courts are responsible to enforce right, which is
protected legally. Right is always qualified or conditional. It is connected with obligation. If you are entitled for
the right of life, you must protect others right of life. Land can be acquired by lawful means, by operation of
law, gift, or inheritance.

Duty imposed by law is called obligation. Duty must be performed to acquire right. It results into peace. If one
fails to perform his duty and commits breach of duty, it losses to other in term of suffering from loss. Non
granting of right causes violation of right of other. Act against the right is violation and causes suffering from
losses. Person who is suffering from losses must be protected from loss. He must be compensated and granted
his right is called natural justice.

Why natural justice needs to apply:

1.Aggrieved party needs relief, which does not fall within the jurisdiction of common civil courts.

2.Aggrieved party must be compensated with appropriate relief.

Are the principles of natural justice applied in moral misconduct? We would be required to analyze whether
what is right and what is responsibility of Court in the administration of justice. If moral value is recognized by
the legislature then it becomes legal right. Right of life is protected by constitution so it becomes fundamental
right. Law passed by parliament creates right and obligation for person likes Contract Act, Companies Act,
Labour Law etc. If a person is legally bound to do something is obligation. In Contract of Sale, the seller is
bound to deliver the goods. It is his obligation and to receive sale price is his right. On the other hand buyer is
obliged to pay sale price being his obligation and to receive goods is his right. Right is vice versa of obligation.
If the contract is not performed in its true spirit and according the provision of agreement, it is called breach of
contract thus needs redress (relief or remedy) from the Court. This is called remedial justice.

Where law is silent, i.e., there is right if contract exists and required to be performed but lacks specific
performance then Specific Relief Act comes into action for the granting of right. A (being seller) agrees to sell a
suit to B (being buyer) on the price of Rs. 500/. B pays Rs. 200/ in advance. Upon the payment of balance
amount A (seller) refuses to deliver the suit pricing Rs. 500/ is breach of contract. Seller is responsible to
deliver the exact suit to buyer or return the paid amount to him. But if buyer compels to seller to deliver him
agreed suit then what would happen? Is remedy available in law? This sort of remedy is not available in law.
But it is his right that he must be compensated. This is a situation where law is silent. Here principles of natural
justice are applied. In Equity ubi jus ibi remedium is applied meaning of which are where there is right
there is remedy.

1.Maxim: Where equities are equal law must prevail. This maxim means that when the conflicting interests
of two or more parties are supported by equitable pleas of equal value, equity being unable to prefer one to
the other would allow the conflicting equities to cancel out and leave law to take its course. It means the
parties will litigate in a Court of Law where the only legal estate alone will apply. Where the defendant has
an equal claim to the protection of a Court of Equity for his title as the plaintiff has to the assistance of the
Court to assert his title, the Court will not interpose (introduce, interrupt) on either side, but will leave the
matter as it stands. The equity is equal between persons who have been equally innocent and equally
diligent. This doctrine applies, strictly in all cases, where the title of the plaintiff seeking relief is equitable.
The purchaser, however, in all cases, must hold a legal title in order to give him full protection of his
defence. He must have paid the purchase money before notice, otherwise he will not be protected.

A legal right is enforceable against any person who takes the property, whether he has notice of it or not.

For instance, if A sells to C land, over which B has a right of way, C takes the land subject to Bs right,
although he was ignorant of the right at the time of purchase. But the rule is different as regards equitable
rights. It is well established rule that a purchase for valuable consideration without notice of prior equitable
 right, obtaining the legal estate at the time of his purchase, is entitled to priority in equity as well as at law.
In such a case equity follows the law, the purchasers conscience not being in any was affected by the
equity.

Where one thing follows two claimants on the base of equal equity, equity shall follow the law and legal
right shall be preceded. Law provides relief to those who claims on the base of legal right.

According to this maxim if legal right is equal to equitable rights, legal right shall remain there. It means
the person bearing legal right shall precede however equity is under law.

Application: This maxim has certain applications such as:

1.Dispute in transfer of property: When both the contestants are equally entitled to obtain help from courts
of equity (because their equities are equal), the party who has law in his favour will succeed.

For example, A agrees with B to sell his property for Rs. 5,000/. Therefore in breach of the above
agreement, A sells the property to C for B Rs. 6,000/ and making a document hands over the possession of
the property to C. As a result of the agreement B did not get any legal interest in the property. B has only an
equitable interest in his favour binding A conscience. C, on the contrary, as a result of his agreement with
A, gets the legal interest and has executed a document and obtained possession of the property. Bs interest
is an equitable with law in his favour. Naturally, therefore, in a conflict between B and C, C has superior
interest as compared to that of B. Thus equitable interest is not as strong as a legal interest and so,
according to the maxim the law shall prevail.

It may be noted that the doctrine of Election, Marshalling, and Set Off are based on the maxim under
discussion.

2. Tacking (application in Pakistan): There are three different mortgages executed in respect of the same
property to X, Y, & Z respectively. The mortgagor executed on different date and nonof the parties have
the notice of the prior mortgage. In such as case the first mortgagee has to legal estate. According to maxim
where equities are equal the first in time shall prevail, the mortgages rank in order of time. If C, by paying
off As mortgage, obtains the legal estate, i.e., obtains conveyance of As estate and an assignment of his
securities, he is entitled to precedence over B and also to the first mortgage. But in case the first mortgagee
has not the legal estate, the third mortgagee acquires not property over the second mortgagee even if he
made the payment to the first mortgagee.

3.In contradiction of legal and equitable right: This maxim is used where equitable and legal rights conflict
and precedence go to legal right. Equities must be equal by there should be conflict of legal and equitable
rights. It does not apply where priority of time in case of equity is determinant factor in relief.

4.Transfer of property cases: S. 78 of Transfer of Property Act is based on this maxim. It enacts that where
though the fraud, misrepresentation, or gross neglect of a prior mortgagee, another person has been
induced to advance money on the security of the mortgaged property, the prior mortgagee shall be
postponed to the subsequent mortgagee.

S. 53 of Transfer of Property Act is also based upon this maxim. It enacts that every transfer of immovable
property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option
of any creditor so defeated or delayed.

It is clear in law that fraudulent transfer of property with intent to defraud or delay is voidable.

X being heavily indebted tries to dispose of his immovable property and converts it into cash in order to
defeat his creditors. Y being aware of all these facts, purchased such property from X. The sale is voidable
at the option of the creditors so defeated. If however, Y is not aware of the above circumstances and
purchases the property in good faith, the sale would not be voidable. But if Y takes the property by way of
 gift, without paying any consideration for the same, the sale shall be voidable at the instance of the
creditors regardless of the fact whether Y had or had not any notice of the intention of X to defraud his
creditors.

Justice Lord Selborne held in famous case Ewing v Orr Ewing that courts of equity are always supposed
courts of conscience in England. They act in personam and not in rem. In exercise of this jurisdiction they
put pressure for the performance of agreements and securities even they do not come under their
jurisdiction.

Exception: This maxim has two exceptions as follows:

1. Prior equitable and subsequent legal right: Where interest in legal property comes subsequently, cannot
attain precedence. Person, who acquires equitable right in the presence of legal right, he procures breach of
duty.

In case of negligence or fraud legal property extinct priority right if equitable property comes subsequently.

2. Equal equities without legal right: Where there are equal equities but legal right lacks, this maxim shall
not apply.

2.Maxim: Equity imputes an intention to fulfill an obligation. Equity courts came into existence to do justice.
A person must do what is right and fair. Contract is made to discharge obligations created. Binding force
behind the contract is intention, which creates obligation. Contracts are made upon requirements on both
under one is interested to have profit while other one is interested in satisfaction of his needs and wants.
One shows willingness to sell and other one in buying. They both agree on common intention. During
chilly weather seller is interested in selling of sweater in exchange of benefit of buyer. This common
intention creates obligation. Where the equity involves in contractual obligations? Where there is possibility
to perform the contact, it must be performed specifically.

Where a man is under obligation to do a certain act and he does some other act, which is capable of being
considered as a fulfillment of his obligation, the latter act will be so considered. Because it is right to put the
most favorable construction on a mans act, and to presume that he intends to be just before he affects to be
generous.

Equity Court is a Court established to do what is right, and, consequently, it seems only natural that it
should impute to persons an intention to do what is right.

A husband covenants with the trustees of his marriage settlement to pay to them 50,000/ to be laid out
by them in purchase of land in a particular area Devon. He, in fact, never paid the sum, but after marriage
purchased land at Devon in his own name, for 50,000/. He died and could not bring the land into
settlement. Equity Court construed that the purchased land to fulfill his obligation created by the covenant.

There may be situation in which a person under obligation deviates. When compensation can be offered? If
the specific performance is impossible by operation of law or by an Act of God, then compensation is
offered. Compensation may also be offered upon the commission of mistake of fact.

Although reasonable time period should be given to other party in order to discharge obligations. But in
inverse situation full benefit received must be returned.

Subsequent illegality puts a person in deviation from performance. Party cannot compel him to perform
contract specifically. Here benefit is restored, i.e., return of received benefit.

In an instance, A owes Rs. 40,000/ from B. A is liable to repay to B Rs. 40,000/. A dies making a Will for
Rs. 40,000/ out of his legacy in favour of B without mentioning the repayment against credit to B. It would
be presumed that it discharges of debt by legacy.
 If A makes a Will for the payment of Rs. 20,000/ out of Rs. 40,000/, it will be assumed that the balance of
Rs. 20,000/ is still outstanding on the part of A.

If A makes a Will of Rs. 60,000/ in favor of B, it will be assumed that A has discharged debt by legacy with
above of obligation. We can say that Will can be equal to obligation, less, or above.

Application: It applies in following cases:

1.Performance: Where a person covenants for valuable consideration to purchase and settlement land upon
certain trusts, and subsequently purchases lands of the nature of those covenanted to be purchased and
settled. Equity, if he retains such land unsettled till his death, will presume that such lands were purchased
in performance of the covenant and are bound of it. Where a person covenants for valuable consideration to
leave by Will to or in trust for a certain person a legacy and subsequently dies intestate, equity will
presume that any share of the covenantors estate received by such person under the intestacy is a complete
performance of the covenant.

2.Satisfaction: Where a testator having contracted a debt before that date of Will, dies without having paid it
and by his Will leaves his creditor a pecuniary (monetary, fiscal, financial) legacy equal to or greater than
the amount of debt, equity, in the absence of any thing to show a contrary intention, will presume that the
testator intended the legacy to be in satisfaction of the debt.

Distinction: The distinction between satisfaction and performance is that satisfaction presupposes intention. It
is something different from the subject of the contract and is substituted for it. The question always arises, was
the thing done intended as a substitute for the thing covenanted, a question entirely of intent, but with
reference to performance the question is, has that identical act, which the party contracted to do, been done?

Exception: Pakistani law has provided certain exception in this maxim. Under S. 177 of Succession Act,
obligation remains there, if not provided specifically in a document.

This Act provides that where a debtor bequeaths a legacy to his creditor and it does not appear from the Will
that the legacy is meant as a satisfaction of the debt, the creditor shall be entitled to the legacy as well as to the
amount of the debt.

Under S. 178 of the said Act, if the name of parents is mentioned in Will, is not binding because it cannot be
made in favor of sharers.

Where a parent, who is under obligation by contract to provide a portion for a child, fails to do so, and
afterwards bequeaths and legacy to the child and does not intimate by his Will that a legacy is meant as a
satisfaction of the portion, the child shall be intended to receive the legacy as well as the portion.

Under S. 92 of the Trust Act, 1882, where a person buys the property of Trust knowingly will be treated as
quasitrustee and not the owner.

This Act is founded on the maxim that equity imputes an intention to fulfill an obligation. It lays down that
where a person contracts to buy property to be held on trust for certain beneficiaries and buys property
accordingly, he must hold the property for their benefit to the necessary to give effect to the contract.

3. Maxim: Equity looks to the intent rather than the form. The rule of this maxim means that a Court of
Equity is concerned more with the real intention of the parties than with the actual form of the transaction
in question. Equity gives effect to what the real intention of the parties to a contract is, and, like law, it is not
always to be guided by the language in which that intention is expressed in the deed. If a party to a contract
for the sale of land fails to complete on the day fixed for completion, at law he is in breach of his contract,
whereas in equity it will usually suffice if he is ready to complete within a reasonable period thereafter.
Equity as a matter of fact regards the spirit and not the latter of the law.
 As it is seen before, Common Law was very rigid and inflexible. It could not respond favorably to the
demand of time. In respect of acquisition and transfer of property, it regarded the form of a transaction to
be more important than its substance. Common Law was fond of mere technicalities. Equity looks to
intention of parties and not to the words, and it looks to the realities rather than to mere appearances.

Rights are created with transaction. Concentration on form defeats its objectives. It is inequitable to insist
on form, which defeats the intent, however it is an important element in any transaction. It is unjust to
allow a person to insist on form, which diminishes the value of intent. If transaction remains incomplete
than intent is preferable.

Application: This maxim is applied in the cases where law is rigid and reasonable time concession may help in
its compliance. It is applicable in the following cases:

1.Penalties: It is applied in cases where obligation is imposed under law, but reasonable time relaxation may
help in completion the transaction with period of proceedings. The principle object of the contract which
lies in its performance and not in the implementation of penalty.

In some agreements, provisions are inserted to the effect that in case of breach the party responsible for
breach will have to pay a certain sum to the other party. When the sum payable on default is merely a pre
estimate of the loss likely to result to the other party on account of the breach, it is called liquidated
damages. When the sum payable is a punishment for failure to perform the contract, it is in the nature of
penalty.

At the time when the parties enter into a contract, they only contemplate (look, observe, watch) that it will
be performed, and that, in case of failure to perform, they assure that whatever loss a party suffers by the
breach of the contract by the other, would be made good. The naming of a sum as the amount payable on
default is merely an inducement or security for performance. a sum names by way of penalty is intended to
terrorize the other party to perform the contract, while the sum named by way of damages is intended to
secure the performance of the contract by the other party. The Court of equity does allow damages actually
suffered by the breach but does not allow penalty.

2. Forfeiture: This maxim also applies where property comes under obligation due to nonperformance of
contract. A property, which is mortgaged but the repayment of loan or credit, is delayed within stipulated
time period creditor reserves the right to dispose of it to recover his debt. But it is unfair to forfeit the
property at once because the cause of contract was not to forfeit the property but is was just protection of
interest given to creditor. Creditor is liable to serve notice to debtor before going to the sale proceed and
reasonable time must be given for repayment. If the proceeding of auction is started, foreclosure of
property can be stopped upon the payment of debt with interest. Right is not created if any mistake occurs
in document and proved in Court.

Sometimes in a rent deed a condition is inserted that the landlord in case of nonpayment of rent will be
entitled to reentry and the lease would be forfeited. Such clause in a lease is merely incorporated as a
security for the regular payment of rent. The intention is not that lessee be ejected rather the intention is
that he should pay the rent regularly, having been induced to do so under a threat of forfeiture of the lease.
The Court of equity, therefore, would not order forfeiture for nonpayment of rent, if the lessor could be
compensated. It could be done when the lessee paid to the lessor in Court the full amount due from him on
account of rent together with interest thereon, and full costs of the suit.

3. Redemption: Mortgager (the person who mortgages his property as security for the mortgage debt the
borrower) has right to take his property back while it is the right of mortgagee (the person to whom
property is mortgaged the lender of the mortgage debt) to sell out property of the mortgagor in order to
recover his advance given to mortgagor. Mortgagor has right of redemption. Redemption means the paying
off a mortgage debt or charge upon property whereby the equitable interest and legal estate merge the
buying back of the property. An action for redemption is brought by the mortgagor to compel the
mortgagee to reconvey the property on payment of the debt and interest. It also means the equitable right
 of a mortgagor to redeem the mortgaged property after the legal right to redeem has been lost by default in
repayment of the mortgage money at the due date. Further it means the equitable estate or interest of a
mortgagor in his mortgaged land in respect of which an equitable right to redeem subsists.

4.Specific performance: Sometimes, when a person contracts to purchase immovable property from another,
a condition is entered in the agreement of sale that on a certain date the agreement would become complete
by the execution of a deed of sale. If now the sale deed is not executed on the scheduled date and thereby a
breach has taken place and the question arises whether a person who has allowed that days to pass can file
a suit for specific performance. The answer depends upon the intention of the parties when they entered
into the agreement. Primarily the intention was to purchase the property and the day fixed for the
completion of the sale deed was only to secure performance of the agreement of sale.

Limitations and exceptions: This maxim has neither limits nor exceptions. It can be applied anywhere.

4. Maxim: He who seeks equity must do equity. Islam says if you want to exact the full measures, you must
also be prepared to reciprocate. The principle involved in this maxim is that any one seeking assistance of a
Court of Equity must as a condition to obtaining relief do justice as to the matter regarding which the
interference of the Court is prayed for. While giving relief Court looks upon the corresponding rights of
defendant and duties of plaintiff. The rule means that a man, who comes to seek the aid of Court to enforce
his claim, must prepare to submit in such proceedings against defendant in respect of which the assistance
of equity is prayed. Where a plaintiff seeks a remedy to which he is legally entitled the Court will grant him
the relief and will take no account of his conduct. If however, he seeks an equitable remedy, the conduct of
the plaintiff relating to the transaction in dispute become a relevant matter, because the plaintiff must
convince the Court that he has acted conscientiously himself in order to obtain an equitable relief which is
discretionary with the Court.

A person, who seeks relief under the principles of equity, must do whichever is equitable. One who violates
the rights of other cannot claim his right until he fulfills his obligation toward others. At first plaintiff has to
discharge his duty toward others then he may pray for remedy or relief.

Application: This rule has many applications, e.g.,

1.Illegal loans: Illegal loans are first instance on which principles of equity apply. It was first propounded in
Lodge v National Union Investment Company Limited facts of which are as follows:

B borrowed money from M by mortgaging certain securities to him. M was unregistered moneylender.
Under the Moneylenders Act, the contract was illegal and therefore void. B sued M for the return of
securities. The Court refused to make an order except upon the terms that B should repay the money,
which had been advanced to him. This decision was based on the principle of this maxim.

2. Doctrine of Election: A donor A gives his own property to B and in the same instrument purports
(intention, claim) to give Bs property to C. B will be put to an election. He either to retain his own property
and reject the benefit under the instrument or to accept the benefit granted to him by the donor, and allow
the gift of his own property made by A to C to take effect. But in no case can B choose to keep the benefit
granted to him and at the same time retain his property referred to in the instrument.

3.Consolidation of mortgages: In certain circumstances a person who has become entitled to two mortgages
made by the same mortgagor may consolidate the mortgages and refuse to permit the exercise of the
equitable right to redeem on mortgage without the other, i.e., unless there is simultaneous redemption of
all. This is called equity of consolidation. This is naturally on the principle that who comes into equity must
do equity.

4. Notice to redeem mortgage: A mortgagor who wishes to exercise his equitable right to redeem his
mortgage must give his mortgagee reasonable notice of his intention. It is an equitable right of mortgagee.
5. Wifes equity to settlement: There was time when in England at Common Law the wife could not hold
independently any property. This was the effect of marriage. Legal existence of the wife so to say merged
into that of her husband, the husband consequently becoming the absolute owner of her money, goods and
cattle, things in action and estates. But equity saw injustice in this situation and therefore departed from the
Common Law principle in three cases, such as:

(1)By recognizing the wifes equity to a settlement.

(2)Recognizing the wifes right to a separate estate in certain circumstances.

(3)Restrain on anticipation.

Court refuses to aid husband in a case to get possession of property unless he makes a fair settlement of
part of the property on his wife and children.

The right of a wife to have a settlement on herself of part of her equitable property, which her husband was
claiming by suit in a Court of equity. Since a married woman holds her property separately from her
husband, and has no need to invoke this doctrine.

6. Equitable estoppel: Where maker of the representation is not allowed to go back is called estoppel. The
rule of evidence or doctrine of law, which precludes (prevent, exclude) a person from denying the truth of
same statement formerly, made by him, or the existence of facts which he has by words or conduct led
others to believe in. If a person by a representation induces another to change his position on the faith of it,
he cannot afterwards deny the truth of his representation.

7.Set off (conflicting claims in one proceeding): A judgementdebtor is entitled to set off a decree which he
has against his decreeholder and this right of set off he can also exercise against the transferee of the
decreeholder.

A holds a decree against B for Rs. 500/. B has decree against A for Rs. 300/. C is a transferee from A of his
decree. C cannot execute the decree against B for more than Rs. 200/.

Difference between the two maxims: Difference of present and past conduct lies in two maxims.

Present conduct lies in the maxim who comes to equity must do equity. If you want to acquire property,
must give the right of others first then you may demand your right. This conduct lies in who comes to equity
must do equity maxim. Then plaintiff may moulds according to the imposition of restrictions of the Court.

Past conduct lies in the maxim who comes to equity must come with clean hands. This maxim refers before
the plaintiff approaching to the Court. Plaintiff must be clean hand before he goes to Court to have equity. It
also refers to the conduct as the Court thinks it ought to be. If the conduct of plaintiff would unfair, he would
not be entitled to get the relief.

Limitation: Some limitations are as follows:

1.It cannot be applied against the State legislature.

2.Also it cannot be applied to Acts of Parliament because they are no representations.

3.No one can go against the statute.

4.Where liability is imposed by the statute.

5.Where there is statutory prohibition.

6.Where there is no representation or government makes out promise.

7.Where government policy is involved but where public authorities are involved there it can be applied.

8.Where there is fraud or collusion.

9.Where public interest suffers.

10.Where there it seems inequitable.

5.Maxim: Equity will not suffer a wrong without remedy. It means where there is right there is remedy (mi
eAe{YBU). It deals with compensation in case of violation of legal right of an individual. It is also
enforcement of right. Right must also provide remedy against its infringement. Right has no value if there
is not remedy. There is no value of right without remedy or enforcement.

The idea expressed in this maxim is that no wrong should be allowed to go unredressed if it is capable of
being remedied by Courts of Justice. It really underlines the whole jurisdiction of equity. Rights and
remedy go together. There is no wrong for which equity cannot provide remedy. Where common Law
failed to provide remedy there Chancery Courts supplied such remedies as was not obtainable in law. It is
possible for the entire equitable jurisdiction of the Court of Chancery to prevent failure of justice. The
maxim must be taken as referring to right which are suitable for judicial enforcement by which were not
enforced at common law owing some technical defect. It should not conclude that Court of Chancery
furnished a remedy for every moral wrong.

This maxim regards exclusively rights which come within a class of rights recognized at law, or capable of
being judicially enforced without occasioning a greater detriment or inconvenience to the public. In a
simple contract to sell land, common law could provide just damages. But damages could not be adequate
relief and plaintiff could not sue for specific performance. The equity Court came to his aid and gave him
the relief by way of specific performance. Neither the breach of contract nor the commission of a wrong
could be restrained by injunction by the common law courts though this remedy was available in the
Courts of Equity.

Application: This maxim is applied in the cases such as:

1.Violation of right: Where plaintiffs legal right violates but he suffers from no loss. Here maxim injuria sine
demnum applies and nominal or small amount of damages is awarded. If A trespasses in Bs property but
no damage is occurred and A brings the tort case in Court, since no loss is happened, so Court will award
nominal damages because legal right of A is violated. In the case of Ashby v White, plaintiff was legally
qualified voter. Defendant refused willfully, maliciously, and fraudulently to cast him vote. Legal right was
infringed but there was no actual loss because candidate was elected in election. In another case of
Constantine v Imperial Hotel, plaintiff was refused to allot accommodation in hotel. Plaintiff got
accommodation in other hotel. He received damages, which were very nominal.

2. Where defendant holds evidence: Any document which was lying with defendant and plaintiff was in
need of it to present as evidence in Court but common law Court were unable to get it discovered. Equity
Court was in such a position to help plaintiff in providing remedy.

3.Uses and trust: It is based on the principle that one has interfered in the enforcement of uses and trust.

In a case A conveys the certain land to B for the benefit of C. If B misappropriates the trust property, law
cannot provide remedy to C, a beneficiary. In this instance, equity interferes to provide remedy to C. Since
the wrong use of trust itself is injustice, so it can be remedied in Court of Equity.

4. Interest of mortgagor: In a mortgage transaction the mortgagor agreed to pay the mortgage debt at a
certain date and the mortgagee to reconvey the mortgage property to the mortgagor if his claim was paid
by the due date. If the debt was not paid on or by the due date the property was forfeited to the mortgagee
 and the mortgagor was forever deprived of it although the value of property was much more than the debt
in lieu of which it become absolutely vested in the mortgagee.

The mortgagor in such cases had no remedy at law to recover his property, as common law did not
recognize any right in favour of the mortgagor in the property after the date of payment. Equity took
different view. Equity Court held that intention of the mortgage was not to forfeit the property but it was
just security of debt given. If the mortgagor paid his debt even after the fixed date, he was entitled to
recover the property.

Therefore this maxim created the very important right known as the right of redemption or equity of
redemption in favour of mortgagor.

The equitable right of a mortgagor to redeem the mortgaged property after the legal right to redeem has
been lost by default in repayment of the mortgage money at the due date.

The equitable estate or interest of a mortgagor in his mortgaged land in respect of which an equitable right
to redeem subsists.

5.Right of trusteeship: Common law Court does not recognize the rights of trusteeship. But in equity author
of trust is supposed owner of the trust. If trustee commits breach of trust, author can institute a suit for
remedy against trustee for breach of trust. Equity regards the intent of the contract rather than its form.

6. Protection of the right of creditor: This maxim applies in the cases where documentary evidence loses.
Creditor holds the receipt of debt which debtor gives to creditor. Creditor keeps the receipt in his safe
custody. But there may be a case where such receipt misplaces or destroys. Common law does not provide
remedy in such a situation. Here equity provides remedy to aggrieved party such as creditor who has right
of repayment. Since equity Court is Court of conscious therefore equity regards and keeps in view of facts
rather than documents.

7. Enjoyment of right: Every person has a right to enjoy his rights within the limits which law prescribes.
Owner of a certain land may construct home on his land, which may include window towards adjacent
land. He enjoys air and light. Other person may build his own home which may cause prevention in the
enjoyment of such right, i.e., air and light. However prior builder suffers from injury by subsequent
builder, but it is not violation of legal right. Every person has right of construction on his land and he may
enjoy by such construction. There may be a contrary situation where prior builder has been acquired right
of easement. Subsequent builder shall extinct his right.

8.Specific performance: This maxim also applies in the cases where right of specific performance is granted.
Such grant follows the rules of equity.

Limitation: There are three limitations in this maxim such as:

1.Legal rights: Only violation of legal right is subject of equity. Principles of this maxim applies where breach
of legal right is committed there equity provides sufficient remedy. Equitable rights are also subject of
equity. Equity cannot provide remedy mere on breach of moral right. Courts regard only those violations
against which they enforce right. However violation of recognized right is breach of violation of right
cognizable under equity. Where equity does not recognize right, equity does not provide remedy.

2.Where jurisdiction of common Court lies: Equity does not provide relief where both right and remedy is
available under the common Court. It means equity Court fails where jurisdiction of common Court is
available. Equity regards the jurisdiction of common courts. Cases, which come in the jurisdiction of
Common Law courts cannot be presented in equity courts, thus no relief can be granted.

3. Negligence of party: Law helps those who help themselves. Law aids the vigilant and not the indolent.
Plaintiff is as responsible to protect his right as courts are. Neither plaintiff has to destroy his evidence nor
 he has to allow others to destroy evidence. Where his negligence destroys evidence or he waives off his
right, equity shall not provide remedy. Equity courts become unable where party destroys or let other party
to be destroyed evidence in his own favour due to negligence. If the right is waived off for the equitable
remedy even then this maxim is not applied.

6.Maxim: He, who comes to equity, must come with clean hands. It is meant that person claiming right is not
willing to fulfill his obligation. He must fulfill his obligation first and then come for equity. Plaintiff must
come with clean hands. Plaintiff should not himself wrongdoer. Where conduct of person is defective he is
disentitled. Terms and conditions will decide right of claimant.

S. 9 of Civil Procedure Code (CPC) gives unlimited powers to civil courts. Why these powers are given? In
old system there were heads of each and every case. If case was fallen within that heads then courts were
liable to hear that particular case. There are certain matters for which Court is not competent in normal
circumstances to hear the case. There was no provision for uncertain matters, therefore equity courts were
given the authority to decide this sort of matters. Every case is hearable for civil Court. Civil Court is only
responsible to decide matters, which are civil in nature, i.e., violation of civil legal rights. Civil Court is
empowered for every kind of civil suit. S. 22 of Specific Relief Act gives discretionary powers to civil courts.
If the document has been lost then oral evidence is admissible to prove the right.

Equity, as it was based on good faith and conscience, demanded fairness, uprightness, and good faith not
only from the defendant but also from plaintiff. It is therefore aptly said that, he that hath committed an
inequity, shall not have equity. This maxim goes a step ahead and expects the plaintiffs conduct above
reproach must be fair before he comes to the Court.

Act of state (emergency or necessity) comes in exception while act of government (authority must prevail)
may be rebutted.

Application: This maxim is applied where act is done within the limit of legal rights. If a person exercises his
legal rights which affects the rights of other cannot be said wrongdoing on the part of defendant. It is applied
in the cases where parties disagree on the distribution of profits arriving from legal proceedings. Proceeds,
which come from illegal bargain, can never claim right under equity.

Inequitable conduct is also a case where person who commits fraud and gets certain amount losses his right to
sue in equity courts. Concealment of age by minor is the good example.

Limitation: As a whole the conduct of plaintiff is not taken into consideration. Plaintiff should have immediate
and necessary connection with the equity sued.

Exception: There are two exceptions to the maxim such as:

1.For the sake of public relief is granted even the transaction is against public policy. Parties may be relieved
on moral values.

2.Where party admits his wrongdoing before his unjust plans are carried out, the Court will not stick to the
letter of the maxim and will extend its assistance for doing justice.

7. Maxim: Equity follows the laws. It means that where law is defective and unable to provide justice and
sufficient remedy there equity provides remedy, keeping in view of existing laws. Procedure of equity
Court is not in contrast with existing law, but where there, injustice or justice lacks there equity interferes to
grant remedy.

The direction of Court is governed by the rules of law and equity, which are not to oppose, but each in turn,
to be subservient to the other this direction in some cases follows the law, in some cases assists the law,
and advances the remedy. Equity does not come to destroys the law, but for its fulfillment, for its
explanation, and for its supplement.
 In other words where there is some important circumstances disregarded by the existing law and rules
there equity interferes.

Application: S. 17 of Registration Act governs the rules of compulsory registration of document, while s. 18 of
the same Act governs the rules of optional registration of document, and s. 50 deals with the priority rights. In
case where registration is compulsory and document is not got registered, that document is invalid in the eyes
of law. In other case where registration was optional and one of two persons had got registered that document
while other one had not got it registered. Here equity would follows the laws and provides the remedy to the
person who had got registered the document, despite it was optional. Here s. 50 of Registration Act applies.

In Quran owner of property is obliged to make Will in his life as he wants, but keeping in view of justice. If he
dies by making Will, which is based on inequality or biasness, can be rebutted in Court.

Where the law was based on fudal tenure, equity refused to follow it.

Limitation: It has two exceptions as follows:

1.Where specific and clear law is not applied.

2.Where analogy is not applied. Equity formulates and applies its own rules, on the reason that injustice must
be remedied.

8. Maxim: Delay defeats equities. It is selfevident truth (axiom) that eternal vigilance is the price of liberty.
This maxim means Equity aids the vigilant and not the indolent. If one sleeps upon his rights, his rights
will slip away from him and therefore this maxim is expressed. If someone has any right, he must come to
Court for remedy within stipulated time period as laid down in the law. If he comes within fixed time
period, then his right would be recognized and enforced. Delay in claim defeats right. There are two types
of delays. One is explainable and other one is not explainable. If the case is referred toward the concerned
authority and they have retained the case, which caused delay, it is explainable and does not defeat the
right.

In other instance, if the case was not put to the concerned authority and was being referred toward
irrelevant authorities and caused delay, is not explainable and thus defeats rights.

Application: This maxim applies only when a claim is made to equitable relief.

Where there is no limit of period, how the matter would be decided? Courts are allowed to use their
discretionary powers. They have power to accept or reject the arguments. Application of this maxim became
less valuable when Limitation Act passed. Now the period of limitation commences when the matter is brought
in the knowledge of the aggrieved party. If law restricts the matter to bring into the Court within one year and
matter is brought after one year with proper explanation then Court would consider its limitation from the date
of its explanation. Proper forum must be adopted for remedy. Insanity, outstation in abroad, sickness, pending
case with relevant authorities, illegal confinement, late bringing into knowledge of aggrieved party, draft was
prepared but the time of Court was over, there was delay in the typing, last day was off, transportation
breakdown, or any other valid causes are sufficient reasons to make ground for delayed matters.

Bonafide purchaser does not know whether property he has acquired is encumbered. He is one who purchases
property in good faith. Here Specific Relief Act applies.

Set off means counter claim. It means adjustment of the right, which I have to get from other and the right,
which I have to give to other. Adjustment of difference regardless maturity of others right is called set off.
Liability of other person in other transaction does not affect the right of other. If you have any claim, must give
right of others.
A claim in a liquidated amount by the defendant to a sum of money as a defence to the whole or part of a
money claim made by the plaintiff, which may be included in the defence and set off against the plaintiffs
claim, whether or no it is added as a counterclaim. There can, in general, be no set off against the Crown.

A has mortgaged his piece of land to B for the Rs. 100,000/ for three year. A is liable to pays B Rs. 100,000/
after three years. In another transaction B has to pay A Rs. 200,000/. A can adjust his payment against the
liability of B. It is only allowed if Court satisfies and allow.

9.Maxim: Equality is equity. Equality is a sort of justice in words of Plato. In the absence of other thing, it is
the best solution. Equality is not equality in its ordinary meaning but it is proportionate equity. In absence
of any sufficient reasons for any other basis of division, those who are entitled to property should have the
certainty and fairness of equal decision. Nobody should be given undue benefit. If there is no duty there is
no right.

Application: This maxim is applied in the following situations:

1.Equal distribution of joint funds and joint purchases. This maxim applies where more than one seller or
purchasers are there. If loss occurs, it would be distributed proportionately among them upto the extent of
their share in proceeds. If Court imposes fine, all are responsible equally. If one pays the whole of fine, may
recover the balance of fine from other but proportionately.

2.Contribution between cotrustees, cosureties, and cocontractors: Creditor has right to claim his advance
from any one of cosharers. The debtor who thus compelled to pay the whole of the claim had no remedy
against the others. Equity made it possible for him to recover the share of other but proportionately.

10. Maxim: Equity looks on that, as done which ought to be done. Contract is based upon the act of parties,
which creates rights and liabilities.

For instance, B pays as advance money to A, for the purchase of a plot and seller who is A receives the
money. A is liable to transfer ownership upon the receipt of full payment from B within stipulated time
period, which is to say 3 months. If buyer pays the remaining money within time specified then seller is
obliged to transfer ownership, but in contrary situtation he is liable to pay damages against the breach of
contract. Seller cannot sale the plot during the course of fixed period. He is liable to pay compensation if he
resells it to third party. But if buyer fails to pay remaining portion to seller, buyer may neither bind seller to
wait for reselling nor he can demand advance amount back.

Conversion makes movable property immovable within fixed time and vice versa.

If the contract is not executed or buyer becomes insolvent and both seller and buyer agree to alter the
contract will reconvert the contract to same position as it was before the agreement. Decision of parties is
sufficient cause for reconversion.

11. Maxim: Equity acts in personam. Where there is violation or infringement of right, in remedial system of
justice, aggrieved party is required to initiate proceeding, by means of writ, for redressal. This is obligatory
on the part of aggrieved party. Where there is violation and government takes action, it is called act in rem.
In personam, courts issue orders to the person who commits default, i.e., defendant.

Application: Summon, service of: It is a call of Court for the presence of person who may be either defendant
or witness. He also may be an expert. Court also may call any other person despite the original one. If the
required person is government official, he may nominate other person in his place. If the government official is
absent, any other suitable person from his office may be called for evidence to present record. However third
person that is irrelevant cannot be called. Declaration: Where there is refusal to accept right of person, Court
may issue declaratory decree to accept his right and may enforce it against defendant. Injunction: It is a stay
order against defaulter and also called preventive relief. Court may refuse to issue injunction if the person
applied has interest nothing. However if his own conduct is defective then again Court refuses to issue
injunction. Place of suing of suit: Case may be initiated or proceeded where there defendant resides or
property is situated. It relates to territorial jurisdiction of Court. If property is situated in Sialkot and plaintiff
resides in Lahore, he may initiate proceedings either in Lahore or Sialkot, but he cannot initiate this case in
Gujranwala.

Execution of decree: Decree is always executed on defendant in personam.

Limitation: Personal conduct may disentitle the person. Criminal and tortuous acts fall in its limitation.

Who can serve notice?

1.The claimant can give notice.

2.Legal representative may give notice in case of death of any person.

3.Authorized agent who has expressed authority or have power of attorney may give notice.

4.Official assignee may give notice in case of liquidation.

To whom it may be given?

1.Defendant is a person to whom notice may be given.

2.Agent or legal representatives are also liable to give notice.

3.In case of insolvency, notice can be given to official assignee.

When notice may be given?

1.Under express statutory provision notice is given.

2.Where cause of action (eBI) arises (on the default of other party).

When notice is not required?

1.Where facts are within the knowledge of defendant.

2.Where defendant himself is responsible for the irregularity, i.e., involve in fraud etc.

Prerequisites of notice:

1.Notice must be for a reasonable time period.

2.Opportunity must be given to defendant for his defence.

3. Notice even after proceeding is also lawful, especially in tortuous acts or in criminal cases but it is not
considered valid in civil cases.

4.Delay in notice serving is also valid in some cases.

5.Public document is also notice, like statute law, personal law applicable on self, and in newspaper. Personal
law, which is not applicable to the concerned person, is not a public document.

Constructive notice means implied notice. It means where it is conceived that it is notice.

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