How to deal & react with a dishonest & a liar manager who tends to wash up his hands and put the blame on his team when facing issues with Management?

If the manager in question is your boss - get a new job.  It's very hard to win unless you have an ally in senior management.   The alternative is to humiliate him repeatedly in front of his boss (or peers) in such a way that he can't punish you for it. 

If he is your subordinate - fire him.  (After going through the correct process, obviously.)

It is never acceptable for a manager to blame his team.  That's even worse than lying.  By definition, the manager is responsible for what the team does.