8 Equity

EQUITY
AS
SOURCE OF LAW
LAW109
LEARNING OUTCOMES
• Understanding Equity as a distinct source of Law
• Exploring the process of evolution of Equity
• Impart capability of utilising Equity under modern law
• https://www.youtube.com/watch?v=4oNnv5JqZW0
(Common Law and Equity)
EQUITY
• Latin word ACQUITAS – to equalize
• Equity has been used to remove the defects of the common law
in England according to principles of reason and fair-play.
• Equity aims at three objectives:
• The interpretation of law should be based on sound logical

reasons
• There should be generality in the application of law.

• The deficiencies of law should be removed through equitable
principles of justice and good conscience
• Till medieval times, most laws were uncodified and statute law
was restricted only to certain specified matters.
• The deficiencies and lacuna of the law were remedied by resort

to principles of equity.
• The principles of equity helped common law to attain

perfection.
• Equity has been defined as
• portion of remedial justice which is
• exclusively administered by the Court of Equity
• as contra-distinguished from the portion of the remedial

justice which is exclusively administered by the Court of
common law.
• Sir Henry Maine - Equity is a set of rules
• which were in existence side by side with the original law

• were based on well established principles of morality,
natural justice, honesty and uprightness.
• Origin of equity is traceable to Roman Legal System where the

judicial officers known as Praetors used to resolve rigidity of
civil law through equity and setup separate set of courts of
administering equity law.
• In 14th century in England, the common law courts were proving

as rigid incapable of meeting the requirements of justice.
Therefore a process for evolving modern equity law began as
people directly approached the King for justice.
During this period, there were three types of Courts functioning in
England –
I. Exchequer – The King’s Court consisted of a small body of

great men which assembled on joint feats with the King on
special occasions and were thereafter named as Exchequer to
exclusively deal with matters of revenue collection for royal
administration and adjudication of public revenue disputes.
II. Court of Common Pleas – This was Royal court that dealt
with cases wherein the parties were individuals instead of
Crown being one of the parties.
• Court of Common Pleas accompanied the King in his journeys
and consequently suitors had to make tiresome journeys to
obtain Royal Justice.
• In 1215, Magna Carta was passed to setup permanent Court of

Common Pleas at Westminster to adjudicate civil disputes and
parties were no longer required to follow the King on his tours
to obtain justice.
• Court of King's Bench - The Court which accompanied the

King on his journey for deciding cases in which King was a
party, was called King's Bench.
• After the Common Plea Court was permanently located at
Westminster, the King’s Bench adjudicated criminal cases.
• NOW, all the aforesaid Courts used customary Common Law of

England. The common law suffered from many deficiencies –
• lack of remedies;
• inadequate and primitive remedies;
• cumbersome procedure.
• The equitable jurisdiction of the Courts of Chancery grew out of

the exigencies of time and deficiencies of the common law
system.
• The Equity law was administered by Chancery Courts through
three distinct jurisdictions –
• Exclusive Jurisdiction
• Concurrent Jurisdiction
• Auxiliary Jurisdiction
• The Exclusive Jurisdiction of the Chancery Court provided

relief in respect of equitable rights as opposed to legal rights,
which were protected by common law courts.
• Matters relating to trusts, mortgage, guardianship,

maintenance, divorce etc. were decided under exclusive
jurisdiction by the Chancery Courts.
• Concurrent jurisdiction of equity extended to two categories

of cases –
• Remedy provided by Common Law was inadequate
• Common Law provided remedy in an indirect manner or

via multiplicity of suits.
• Remedies provided under the equity law for these cases

included
• injunction
• specific performance of a contract, accounts partnership,
set off etc.
• inter-pleader suits (C, the finder of goods files suit to let

court determine who is its real owner when A and B both
are laying claim to the goods)
• In AUXILIARY JURISDICTION, equity did not itself decide

upon the rights of parties but merely lent its help by affording
the benefit of its special procedure.
• Auxiliary Jurisdiction was exercised where legal remedy was
available for the breach of a legal right but the procedure
thereof was defective and cumbersome.
• The new remedies of injunction, specific performance, set-off,

etc. invoked opposition from the common law Courts and also
the Parliament .
• Resultantly, Chancellor confined his jurisdiction only to

supplement the defects of common law.
• However, the conflict between the common law courts and the
Chancellor's equity jurisdiction reached its peak in 1616.
• Chief Justice Coke and Lord Chancellor came into conflict in a

case where decree was obtained before Lord Coke by
practicing a fraud.
• The Chancellor granted perpetual injunction against the

decree-holder in order to undo the fraud.
• But, it was objected to by Chief Justice Coke.

• King James I referred the matter to Attorney-General who
settled the matter with help of eminent lawyers in favor of
Chancellor.
• This cleared the final hurdle in way of development of Equity

Law as litigants could now freely come to Chancellor's Equity
Court for relief in cases where there was no relief or there was
inadequacy of relief under the common law.
• Subsequent remedies developed in form of trust, equitable

ownership, legal rights and status of infants, lunatics, married
women etc.
JUDICATURE ACTS
• Prior to 1873 CE, common law and equity law were
administered by different court, i.e., the Common Law Courts
and Court of Chancery.
• It was felt that existing structure of judicial forums is unable to

meet the requirements of justice and are not able to grant
complete relief.
• Consequently, the Judicature Acts of 1873 and 1875 fused

together Equity and Common Law courts.
• High Court of Judicature was established which consisted of
five divisions –
o Court of Chancery
o King's Bench
o Court of Common Pleas
o Exchequer Court
o The Court of Probate, Divorce and Admiralty division
• Consequently, even today Equity Law has been retained as

part and parcel of British legal System due to it value in making
justice efficient and practically accessible.
EQUITY AS LAW IN INDIA
• In India there is no separate equity law as such.
• Yet, principles of equity are incorporated in various statutory

laws.
• A general rule is followed by the courts in India that in absence

of specific law on a subject, the case shall be decided
according to the principles of justice, equity and good
conscience.
• Statutory Laws like Indian Trust Act, 1882, Transfer of Property
Act, 1882, Specific Relief Act, 1963, law on mortgages are
completely based on principles of justice, equity and good
conscience.
• In Punjab, in matters of transfer of property between two living

persons, the law which is applicable is – equity law as TPA,
1882 is not applicable to Punjab.
• However, those doctrines of equity which have not been found

suitable to Indian conditions have been rejected.

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EQUITY

• Understanding Equity as a distinct source of Law

• Exploring the process of evolution of Equity

• Impart capability of utilising Equity under modern law

• Equity aims at three objectives:

• The interpretation of law should be based on sound logical

• There should be generality in the application of law.

• The deficiencies and lacuna of the law were remedied by resort

• The principles of equity helped common law to attain

• exclusively administered by the Court of Equity

• as contra-distinguished from the portion of the remedial

• Sir Henry Maine - Equity is a set of rules

• which were in existence side by side with the original law

• Origin of equity is traceable to Roman Legal System where the

• In 14th century in England, the common law courts were proving

I. Exchequer – The King’s Court consisted of a small body of

• In 1215, Magna Carta was passed to setup permanent Court of

• Court of King's Bench - The Court which accompanied the

• NOW, all the aforesaid Courts used customary Common Law of

• The equitable jurisdiction of the Courts of Chancery grew out of

• The Exclusive Jurisdiction of the Chancery Court provided

• Matters relating to trusts, mortgage, guardianship,

• Concurrent jurisdiction of equity extended to two categories

• Common Law provided remedy in an indirect manner or

• Remedies provided under the equity law for these cases

• inter-pleader suits (C, the finder of goods files suit to let

• In AUXILIARY JURISDICTION, equity did not itself decide

• The new remedies of injunction, specific performance, set-off,

• Resultantly, Chancellor confined his jurisdiction only to

• Chief Justice Coke and Lord Chancellor came into conflict in a

• The Chancellor granted perpetual injunction against the

• But, it was objected to by Chief Justice Coke.

• This cleared the final hurdle in way of development of Equity

• Subsequent remedies developed in form of trust, equitable

• It was felt that existing structure of judicial forums is unable to

• Consequently, the Judicature Acts of 1873 and 1875 fused

• Consequently, even today Equity Law has been retained as

• Yet, principles of equity are incorporated in various statutory

• A general rule is followed by the courts in India that in absence

• In Punjab, in matters of transfer of property between two living

• However, those doctrines of equity which have not been found

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