Papayya Sastry & Ors Vs. Government of A.P. & Ors  Insc 243 (7 March 2007)
C.K. THAKKER & LOKESHWAR SINGH PANTA
C.K. THAKKER, J.
All these appeals have been preferred by the appellants against common
judgment and order passed in WAMP No. 1879 of 2001 in W.A. No. 109 of 1997,
WAMP No. 1880 of 2001 in W.A. No. 292 of 1998 and Contempt Case No. 1008 of
2001. By the said order, the High Court recalled common judgment and order
passed on April 27, 2000 in Writ Appeal Nos. 109 of 1997 and 292 of 1998. A
direction was also issued to the authorities under the Urban Land (Ceiling and
Regulation) Act, 1976 (hereinafter referred to as 'the Ceiling Act') to
complete proceedings within the stipulated period.
The case has a long and checkered history starting from early seventies of
the last century. Appellants herein are the owners of land bearing Survey Nos.
3/1, 3/2 and 4 admeasuring 18 acres, 39 cents of Village Kancharapalem,
District Visakhapatnam. It was their case that Visakhapatnam Port Trust ('Port Trust'
for short) wanted to acquire land for public purpose, namely, for construction
of quarters for its employees.
The Chairman of the Port Trust, therefore, sent a requisition letter to the
District Collector, Visakhapatnam for acquiring land admeasuring 45 acres, 33
cents of Survey Nos. 1, 2, 3 and 4 of Kancharapalem Village. Advance possession
of the land of the appellants, bearing Survey Nos. 3/1, 3/2 and 4 admeasuring
18 acres, 39 cents was taken over by the Estate Manager of the Port Trust on August 29, 1972 by private negotiations. The State Authorities, thereafter, were requested
by the Port Trust Authorities to take appropriate proceedings for acquisition
of land under the Land Acquisition Act, 1894. According to the appellants, in
the statement recorded on August 29, 1972, Akella Suryanarayana Rao stated that
he had handed onver possession of the land to the Estate Manager of the Port
Trust. Mr. Akella also stated that there was a dispute regarding land with
tenant Koyya Gurumurthy Reddy under Andhra Pradesh Lands Tenancy Act. It was
also the case of the appellants that the Port Trust deposited with the
Government the amount of compensation payable to the owners of the land. The
land acquisition proposals were approved by the Port Trust as also by the
Government of India.
It was further case of the appellants that a preliminary notification under
sub-section (1) of Section 4 of the Land Acquisition Act was for the first time
issued on August 10, 1973 but nothing further was done in the matter. The
Ceiling Act came into force in the State of Andhra Pradesh on February 17, 1976. It, inter alia, covered the Visakhapatnam Urban Agglomeration.
The appellants filed their declarations taking the stand that possession of
land had already been handed over to Port Trust Authorities even before the Act
came into force and the provisions of the Ceiling Act, therefore, would not
apply to such land. In the light of the above factual position and the case of
the appellants, the Special Officer and Competent Authority, Urban Land
Ceiling, Visakhapatnam vide his order dated May 25, 1981 in C.C. No. 6143 of
1976 declared that the land- owners of Survey Nos. 3/1, 3/2 and 4 were
'non-surplus land holders'. Then the Government again issued notification under
sub-section (1) of Section 4 of the Act on August 29, 1981. Urgency clause under Section 17(4) was not invoked since the possession of land was already
with the Port Trust Authorities. A declaration under Section 6 was issued on October 12, 1982. No award, however, was passed.
According to the appellants, the Chief Engineer of Port Trust in reply to a
query by the Land Acquisition Officer, clarified vide his letter dated December
19, 1985 that actual and physical possession of the land was not taken by Port
Trust as the tenant did not vacate possession of the land. It appears that in
view of the above letter that physical possession of land was not with the Port
Trust Authorities, the Special Officer and Competent Authority, Urban Land
Ceiling, Visakhapatnam referred the matter to the Commissioner, Land Reforms
and Urban Land Ceiling, Government of Andhra Pradesh, Hyderabad in February,
1987 to take up the matter under Section 34 of the Ceiling Act in suo motu
revision. The Collector, Visakhapatnam also vide his D.O. letter No. 433/78,
dated June 27, 1987 requested the Commissioner to reopen the case and start
enquiry. On August 21, 1989, Chairman, Visakhapatnam Port Trust addressed a
letter to the Commissioner, Land Reforms & Urban Land Ceiling, Government
of A.P. categorically stating that land admeasuring 18 acres, 39 cents of
Survey Nos. 3/1, 3/2 and 4 of Kancherapalem village had already been taken over
by the Port Trust and there was no cause to reopen the case under Section 34 of
the Ceiling Act.
Once again, the Government approved the proposal for acquisition of land and
notification under Section 4(1) of the Land Acquisition Act was issued on May 17, 1991.
It appears that the proceedings for reopening of the case by invoking
Section 34 of the Ceiling Act were initiated. On July 20, 1994, notice was issued to the owners to show cause as to why revisional powers should not be
exercised and the order passed by the Special Officer and Competent Authority
under the Ceiling Act should not be set aside. It was also stated in the notice
that it was brought to the notice of the Government that title to the land was
undisputedly with the declarants on the appointed day under the Ceiling Act as
the Land Acquisition Proceedings were not concluded by that date. As such land
was required to be computed in the holdings of the declarants even if it was
admitted by the Port Trust Authorities that they were in possession of the land
in 1972. The land-owners submitted the reply to the notice.
Meanwhile, however, the land-owners filed a petition being Writ Petition No.
11754 of 1994 praying therein that the High Court may direct the State
Authorities to complete proceedings under the Land Acquisition Act and pass an
award. During the pendency of the writ petition the revision was allowed by the
State Government under Section 34 of the Ceiling Act on January 20, 1995 and
the order passed by the Special Officer and Competent Authority, Urban Land
Ceiling, Visakhapatnam declaring that the appellants had no surplus land had
been set aside. The appellants, therefore, filed another petition, being Writ
3102 of 1995 questioning the legality of the order passed in revision. The
learned single Judge allowed both the petitions i.e. Writ Petition Nos. 11754
of 1994 and 3102 of 1995 and by order dated June 4, 1996 directed the authorities to complete Land Acquisition Proceedings and pass award within three
months. The learned single Judge also held that the order under the Ceiling Act
was passed by the Special Officer and Competent Authority, Urban Land Ceiling, Visakhapatnam
in 1981 while suo motu revisional powers were exercised in 1994-95 i.e.
after thirteen years. Such action was, therefore, illegal, unlawful and
unwarranted. Accordingly, the order passed in revision was set aside. Writ
appeals filed by the State were dismissed. A direction was issued by the
Division Bench to fix market value on the basis of notification under Section
4(1) issued on May 17, 1991.
Special Leave Petition (Civil) Nos. 14860-14861 of 2000 filed by the State
Authorities were dismissed by this Court on October 20, 2000.
The State Authorities, thereafter, filed recall- applications on June 13, 2001. In the recall applications, it was stated inter alia that fraud was
committed by the land-owners and material facts were suppressed by them. It was
alleged that possession of land was never handed over to Port Trust
Authorities, nor Port Trust Authorities received such possession of land and
yet it was asserted by the owners that possession of land was given to Port
Trust Authorities in 1972 which was not correct. It was only in December, 1985
that the correct fact came to the knowledge of the State Authorities from a
letter by the Chief Engineer of Port Trust. Hence, the order was taken in suo
motu revision under Section 34 of the Ceiling Act. It was further stated that
even if the Port Trust Authorities would be deemed to be in possession of land
on the day the Ceiling Act came into force, Land Acquisition Proceedings were
not concluded and no award was passed. The Port Trust Authorities, in the
circumstances, would be in possession of the land for and on behalf of the
land-owners and the land was required to be declared surplus and vacant under
the Ceiling Act.
It was further averred that the High Court ordered inquiry by the Central
Bureau of Investigation (CBI) and Mr. Y. Anil Kumar, IPS, Superintendent of
Police, CBI, Visakhapatnam submitted a detailed report in the High Court when
the Writ Appeals were placed for hearing.
Unfortunately, however, the attention of the Court was never invited to the
said report which clearly revealed that there was total fraud on the part of
the land-owners in collusion with Port Trust Officers as also Officers acting
under the Ceiling Act. It was, therefore, submitted that the orders passed by
the Division Bench on April 27, 2000 was required to be recalled by directing
the authorities under the Ceiling Act to conclude proceedings.
The High Court, after hearing the learned counsel for the parties and
considering the records and proceedings including the report submitted by CBI,
held that the case was of a fraud and by suppressing material facts, several
orders were passed and actions were taken. In view of correct and true facts
and reports which clearly established that the authorities were misled, that
proceedings were initiated to revise the order, dated May 25, 1981. The Court, therefore, held that the order dated April 27, 2004 passed by the Division
Bench was required to be recalled and recall applications were allowed.
The Court therefore passed the following order;
"Considering all the aspects as stated above, we are of the considered
view that the recall petitions have to be allowed.
Accordingly we allow the recall petitions by setting aside the common
judgment passed in the aforesaid writ appeals.
We further direct that the proceedings under ULC Act have to be completed
within a period of one month from the date of receipt of this order by the
concerned authorities by giving opportunity to the petitioners and respondents
herein to put forward their cases and after final decision is taken by the
authorities under ULC Act, the further proceedings have to be initiated under
Land Acquisition Act depending upon the result under the ULC Act. The
proceedings under the Land Acquisition Act if initiated, compensation to be
awarded to the respondents herein within a period of three months from the date
of order of the authorities under the ULC Act. The Land Acquisition Officer is
also directed to consider the legal date of possession of the land taken by the
VPT Authorities after conclusion of the enquiry under the ULC Act".
The appellants have challenged the aforesaid order of the High Court. On
August 5, 2002, notice was issued by this Court. Affidavits and counter
affidavits were filed.
On August 6, 2004, leave was granted and hearing was expedited and the
matters were placed before us for final hearing.
We have heard learned counsel for the parties.
Mr. K.K. Venugopal, Senior Advocate, appearing for the appellants contended
that the High Court committed an error in law in passing the impugned order. It
was clear from the evidence on record and various communications that before
the proposal was submitted by the Port Trust Authorities for acquisition of
land for a public purpose (construction of quarters for its employees), advance
possession of land had been taken over by Port Trust Authorities and
land-owners were not in possession of the property. The said fact was noted by
the Special Officer and Competent Authority, Urband Land Ceiling, Visakhapatnam
and an order was passed in May, 1981 that the appellants were 'not surplus land
owners'. In or about 1985, however, there appeared to be encroachment over the
land and some officers of the Port Trust, with a view to save their skin, wrote
a letter on December 19, 1985 that the possession of land had not been handed
over to Port Trust Authorities since tenants were occupying the land. The said
statement was not correct and could not have been considered for initiating
proceedings under the Ceiling Act. It was also submitted by the counsel that
suo motu power was sought to be exercised after a decade. As per settled law,
revisional powers should be exercised within 'reasonable time'. By no stretch
of imagination, more than ten years can be said to be 'reasonable time'.
According to the learned counsel, learned single Judge was wholly justified in
allowing both the writ petitions filed by the land-owners and in issuing
directions, namely, (i) to complete land acquisition proceedings and pass
award; and (ii) exercise of revisional powers after about thirteen years was
wholly unwarranted. The said order was confirmed by the Division Bench in Writ
Appeals. Special Leave Petitions were also dismissed by this Court. After
dismissal of Special Leave Petitions, neither it was open to the authorities to
make an application for recalling earlier orders as has been done in June,
2001, nor it was permissible for the Court to grant such relief. It was also
submitted that the Division Bench, while dealing with Writ Appeals took note of
the fact that the land was 'agricultural land' and was having fruit bearing
a garden land. The said finding had not been disturbed even by this Court in
SLPs. The Division Bench ought to have taken into account that fact as well. By
not doing so, an illegality had been committed and the order deserves to be set
The learned counsel for the State Authorities as also Port Trust Authorities
supported the order passed by the High Court and action of recalling of the
order dated April 27, 2000. It was submitted that the authorities proceeded on
the basis that advance possession of the land was given by land-owners to Port
Trust Authorities in August, 1972. But the statement was not correct and the authorities
were misled. The order passed by the Special Officer and Competent Authority
under the Ceiling Act declaring that the owners did not possess surplus land
was founded on the above statement that the land-owners were not in possession
of land, which was false. But even otherwise, the order passed by the Special
Officer and Competent Authority was not in consonance with law inasmuch as even
if the owners were not in possession of land, proceedings under the Land
Acquisition Act were not finalized. The legal position is that the ownership of
the land-owners continued and in the eye of law, Port Trust Authorities
remained in possession for and on behalf of the land-owners. It was, therefore,
incumbent on Special Officer and Competent Authority under the Ceiling Act to
declare land to be excess and surplus under the Ceiling Act so that appropriate
consequential action could be taken. No such action, however, was taken.
Moreover, it was made clear by the Chief Engineer, Port Trust vide his letter
dated December 19, 1985 that actual and physical possession of land was never
taken by Port Trust Authorities as it remained with tenants and disputes were
going on. The matter, therefore, required detailed investigation.
The CBI made an enquiry and the report was submitted by the Police Inspector
which revealed startling facts. From the report, it is clear that fraud was
committed by the land owners in collusion with officers of the respondents.
Criminal proceedings were also initiated and they are pending. It was, therefore,
submitted that the High Court was right in recalling its earlier order.
Regarding non-applicability of the provisions of the Ceiling Act as the land
being garden land and hence agricultural land under the Ceiling Act, it was
submitted that it was never the case of the land-owners when proceedings under
the Ceiling Act had been initiated that the Act would not apply because the
land was used for agriculture. The sole ground put forward by the land- owners
was that possession of land had already been given to Port Trust Authorities
and hence the Ceiling Act had no application. It was, therefore, submitted that
the appeals deserve to be dismissed and the impugned order calls for no
Having given anxious consideration to the rival contentions of the parties,
in our opinion, no case has been made out by the appellants for interference
with the order passed by the High Court allowing the applications and recalling
earlier order. The High Court has considered the matter in detail. The case of
land- owners was that advance possession was taken over by Port Trust
Authorities in August, 1972. The subsequent facts and letter by Chief Engineer
of Port Trust in 1985 clearly revealed that it was not so. Possession of land
was never with the land owners and was not given to Port Trust Authorities.
From the record it is clear that neither the land-owners nor the Port Trust
Authorities were in actual or physical possession of land, but it was occupied
by tenants and disputes were also going on between the tenants and land owners.
Therefore, the basis on which the Special Officer and Competent Authority,
Urban Land Ceiling proceeded to decide the matter was non-existent and non est.
In our opinion, the learned counsel for the respondents are also right in
submitting that even if the statement of land-owners and Port Trust Authorities
is believed and it is held that actual and physical possession of land was
handed over by land-owners and taken over by Port Trust Authorities, it does
not change the legal position. It was not the case of land-owners themselves
that proceedings under the Land Acquisition Act were finalized and award was
passed. From the record, it is clear that no notification under the Land
Acquisition Act was issued in 1972. Such notifications were issued subsequently
in the years 1973, 1981, 1991 and 1996. At more than one occasion,
notifications were issued only because the proceedings were not finalized and
award was not passed. It is also clear that in the writ petitions filed by the land-owners
in 1994-95, a single Judge of the High Court directed the authorities to
complete land acquisition proceedings by initiating fresh action commencing
from issuance of notification under Section 4(1) of the Act and to complete
them within a period of three months. In our opinion, therefore, the High Court
was right in holding that the provisions of the Act would apply to the land and
Special Officer and Competent Authority, Urban Land Ceiling was wholly wrong in
excluding the land said to have been in possession of the Port Trust
We are further of the view that the State Government, in the facts and
circumstances of the case, was right in exercising revisional jurisdiction
under Section 34 of the Act. Mr. Venugopal is indeed right in submitting that
even though no period of limitation is prescribed for exercise of revisional
jurisdiction by the State Government suo motu, such power must be exercised
within a reasonable time [vide State of Gujarat v. Patel Raghav Natha, (1969) 2
SCC 187]. But taking into account the facts and circumstances in their entirety
and in particular, a letter of Chief Engineer, Visakhapatnam Port Trust of
December 19, 1985, it cannot be said that the power had not been exercised
within a reasonable period. It is also pertinent to note that the subsequent
development shows as to how some of the Officers of the Port Trust were parties
to fraud said to have been committed by land-owners. In this connection, the
respondents are right in inviting our attention to a letter dated August 21,
1989 by the Port Trust Authorities to the Commissioner of Land Reforms stating
therein that the Government intended to exercise suo motu power under Section
34 of the Act but there was no necessity to reopen proceedings and suitable directions
were required to be issued to District Collector, Visakhapatnam to pass an
award in respect of land sought to be acquired under the Land Acquisition Act.
In view of these developments, in our opinion, the High Court was fully
justified in recalling the earlier order.
The High Court has dealt with the contention regarding fraud said to have
been committed by land- owners in collusion with officers of the respondents.
It is stated as to how the High Court ordered CBI enquiry on prima facie
satisfaction that there was a fraud and report was submitted by Mr. Y. Anil
Kumar, IPS, Superintendent of Police, CBI, Visakhapatnam. In the said report,
CBI had stated that possession was never taken over by the Port Trust
Authorities and tenancy cases were pending. Even if there was transfer of
possession, it was in violation of the Andhra Pradesh Vacant Lands in Urban
Areas (Prohibition of Alienation) Act, 1972 which came into force on June 5,
1972. (It may be recalled that according to the land owners as well as Port
Trust Authorities, possession was taken over by the Port Trust by private
negotiations on August 29, 1972). CBI, therefore, observed that transfer of
possession in favour of Port Trust did not constitute legal transfer under 1972
Act. CBI also noted that proceedings under the Andhra Pradesh Tenancy Act were
Now, it is well settled principle of law that if any judgment or order is
obtained by fraud, it cannot be said to be a judgment or order in law. Before
three centuries, Chief Justice Edward Coke proclaimed;
"Fraud avoids all judicial acts, ecclesiastical or temporal".
It is thus settled proposition of law that a judgment, decree or order
obtained by playing fraud on the Court, Tribunal or Authority is a nullity and
non est in the eye of law. Such a judgment, decree or order by the first Court
or by the final Court has to be treated as nullity by every Court, superior or
inferior. It can be challenged in any Court, at any time, in appeal, revision,
writ or even in collateral proceedings.
In the leading case of Lazarus Estates Ltd. v.
Beasley, (1956) 1 All ER 341 : (1956) 1 QB 702 : (1956) 2 WLR 502, Lord
"No judgment of a court, no order of a Minister, can be allowed to
stand, if it has been obtained by fraud."
In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p.644, explaining
the nature of fraud, de Grey, C.J. stated that though a judgment would be res
judicata and not impeachable from within, it might be impeachable from without.
In other words, though it is not permissible to show that the court was
'mistaken', it might be shown that it was 'misled'. There is an essential
distinction between mistake and trickery. The clear implication of the
distinction is that an action to set aside a judgment cannot be brought on the
ground that it has been decided wrongly, namely, that on the merits, the
decision was one which should not have been rendered, but it can be set aside,
if the court was imposed upon or tricked into giving the judgment.
It has been said; Fraud and justice never dwell together (fraus et jus
nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus
nemini patrocinari debent).
Fraud may be defined as an act of deliberate deception with the design of
securing some unfair or undeserved benefit by taking undue advantage of
another. In fraud one gains at the loss of another. Even most solemn
proceedings stand vitiated if they are actuated by fraud. Fraud is thus an
extrinsic collateral act which vitiates all judicial acts, whether in rem or in
personam. The principle of 'finality of litigation' cannot be stretched to the
extent of an absurdity that it can be utilized as an engine of oppression by
dishonest and fraudulent litigants.
In S.P. Chengalvaraya Naidu (dead) by LRs. V.
Jagannath (dead) by LRs. & Ors. (1994) 1 SCC 1 : JT 1994 (6) SC 331,
this Court had an occasion to consider the doctrine of fraud and the effect
thereof on the judgment obtained by a party. In that case, one A by a
registered deed, relinquished all his rights in the suit property in favour of
C who sold the property to B.
Without disclosing that fact, A filed a suit for possession against B and
obtained preliminary decree. During the pendency of an application for final
decree, B came to know about the fact of release deed by A in favour of C.
He, therefore, contended that the decree was obtained by playing fraud on
the court and was a nullity. The trial court upheld the contention and
dismissed the application. The High Court, however, set aside the order of the
trial court, observing that "there was no legal duty cast upon the
plaintiff to come to court with a true case and prove it by true
evidence". B approached this Court.
Allowing the appeal, setting aside the judgment of the High Court and
describing the observations of the High Court as 'wholly perverse', Kuldip
Singh, J. stated:
"The courts of law are meant for imparting justice between the parties.
One who comes to the court, must come with clean-hands. We are constrained to
say that more often than not, process of the court is being abused.
Property-grabbers, tax- evaders, bank-loan- dodgers and other unscrupulous
persons from all walks of life find the court - process a convenient lever to
retain the illegal-gains indefinitely. We have no hesitation to say that a
person, who's case is based on falsehood, has no right to approach the court.
He can be summarily thrown out at any stage of the litigation".
(emphasis supplied) The Court proceeded to state: "A litigant, who
approaches the court, is bound to produce all the documents executed by him
which are relevant to the litigation. If he withholds a vital document in order
to gain advantage on the other side then he would he guilty of playing fraud on
the court as well as on the opposite party".
The Court concluded: "The principle of 'finality of litigation' cannot
be pressed to the extent of such an absurdity that it becomes an engine of
fraud in the hands of dishonest litigants".
In Indian Bank v. Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550 : JT
1996 (7) SC 135, referring to Lazarus Estates and Smith v. East Elloe Rural
District Council, 1956 AC 336 : (1956) 1 All ER 855 : (1956) 2 WLR 888, this
"The judiciary in India also possesses inherent power, specially under
Section 151 C.P.C., to recall its judgment or order if it is obtained by Fraud
on Court. In the case of fraud on a party to the suit or proceedings, the Court
may direct the affected party to file a separate suit for setting aside the
Decree obtained by fraud. Inherent powers are powers which are resident in all
courts, especially of superior jurisdiction. These powers spring not from
legislation but from the nature and the Constitution of the Tribunals or Courts
themselves so as to enable them to maintain their dignity, secure obedience to
its process and rules, protect its officers from indignity and wrong and to
punish unseemly behaviour. This power is necessary for the orderly
administration of the Court's business".
(emphasis supplied) In United India Insurance Co. Ltd. v. Rajendra Singh
& Ors., (2000) 3 SCC 581 : JT 2000 (3) SC 151, by practising fraud upon the
Insurance Company, the claimant obtained an award of compensation from the
Motor Accident Claims Tribunal. On coming to know of fraud, the Insurance Company
applied for recalling of the award. The Tribunal, however, dismissed the
petition on the ground that it had no power to review its own award. The High
Court confirmed the order. The Company approached this Court.
Allowing the appeal and setting aside the orders, this Court stated;
"It is unrealistic to expect the appellant company to resist a claim at
the first instance on the basis of the fraud because appellant company had at
that stage no knowledge about the fraud allegedly played by the claimants. If
the Insurance Company comes to know of any dubious concoction having been made
with the sinister object of extracting a claim for compensation, and if by that
time the award was already passed, it would not be possible for the company to
file a statutory appeal against the award. Not only because of bar of
limitation to file the appeal but the consideration of the appeal even if the
delay could be condoned, would be limited to the issues formulated from the
pleadings made till then.
Therefore, we have no doubt that the remedy to move for recalling the order
on the basis of the newly discovered facts amounting to fraud of high degree,
cannot be foreclosed in such a situation. No Court or tribunal can be regarded
as powerless to recall its own order if it is convinced that the order was
wangled through fraud or misrepresentation of such a dimension as would affect
the very basis of the claim.
The allegation made by the appellant Insurance Company, that claimants were
not involved in the accident which they described in the claim petitions,
cannot be brushed aside without further probe into the matter, for, the said
allegation has not been specifically denied by the claimants when they were
called upon to file objections to the applications for recalling of the awards.
Claimants then confined their resistance to the plea that the application
for recall is not legally maintainable. Therefore, we strongly feel that the
claim must be allowed to be resisted, on the ground of fraud now alleged by the
Insurance Company. If we fail to afford to the Insurance Company an opportunity
to substantiate their contentions it might certainly lead to serious
miscarriage of justice".
(emphasis supplied) Mr. Venugopal, no doubt, contended that when the order
passed by the earlier Division Bench was not interfered with by this Court and
SLPs were dismissed, it was not open to the High Court thereafter to entertain
recall-applications and grant the relief of recalling of earlier orders.
According to him, such an exercise of power was unlawful and abuse of process
In this connection, our attention has been invited by the learned counsel to
a decision of this Court in Abbai Maligai Partnership Firm & Anr. v. K.
Santhakumaran & Ors., (1998) 7 SCC 386 : JT 1998 (6) SC 396. In that
case, after dismissal of Special Leave Petition by this Court, review petition
was entertained by the High Court and earlier judgment was recalled. When the
matter reached this Court, setting aside the order passed by the High Court,
the Court observed:
"The manner in which the learned Single Judge of the High Court
exercised the review jurisdiction, after the special leave petitions against
the self-same order had been dismissed by this court after hearing learned
counsel for the parties, to say the least, was not proper. Interference by the
learned single Judge at that stage is subversive of judicial discipline. The
High Court was aware that SLPs against the orders dated 7.1.87 had already been
dismissed by this court. This High Court, therefore, had no power or
jurisdiction to review the self same order, which was the subject matter of
challenge in the SLPs in this court after the challenge had failed. By passing
the impugned order on 7.4.1994, judicial propriety has been sacrificed. After
the dismissal of the special leave petitions by this court, on contest, no
review petitions could be entertained by the High Court against the same order.
The very entertainment of the review petitions, in the facts and circumstances
of the case was an affront to the order of this Court. We express our strong
disapproval and hope there would be no occasion in the future when we may have
to say so. The jurisdiction exercised by the High Court, under the
circumstances, was palpably erroneous. The respondents who approached the High
Court after the dismissal of their SLPs by this court, abused the process of
the court and indulged in vexatious litigation. We strongly depricate the
manner in which the review petitions were filed and heard in the High Court
after the dismissal of the SLPs by this court."
(emphasis supplied) The respondents, on the other hand, placed reliance upon
Kunhayammed & Ors. v. State of Kerala &
Anr., (2000) 6 SCC 359 : JT 2000 (9) SC 110, wherein this Court had an
occasion to consider the application of the doctrine of merger to orders passed
by this Court while exercising jurisdiction under Article 136 of the
Constitution. The Court there observed that exercise of jurisdiction by this
Court under Article 136 is in two stages; (i) granting of a special leave to
appeal; and (ii) hearing of appeal. The Court went on to observe that the
doctrine of merger does not apply to first stage i.e. at the stage of granting
of special leave to appeal. It applies only at the second stage of hearing of
appeals. The Court in the light of above position, laid down the following
(i) Where an appeal or revision is provided against an order passed by a
court, tribunal or any other authority before superior forum and such superior
forum modifies, reverses or affirms the decision put in issue before it, the
decision by the subordinate forum merges in the decision by the superior forum
and it is the latter which subsists, remains operative and is capable of
enforcement in the eye of law.
(ii) The jurisdiction conferred by Article 136 of the Constitution is
divisible into two stages.
First stage is upto the disposal of prayer for special leave to file an
appeal. The second stage commences if and when the leave to appeal is granted
and special leave petition is converted into an appeal.
(iii) Doctrine of merger is not a doctrine of universal or unlimited
application. It will depend on the nature of jurisdiction exercised by the
superior forum and the content or subject-matter of challenge laid or capable
of being laid shall be determinative of the applicability of merger. The
superior jurisdiction should be capable of reversing, modifying or affirming
the order put in issue before it. Under Article 136 of the Constitution the
Supreme Court may reverse, modify or affirm the judgment-decree or order
appealed against while exercising its appellate jurisdiction and not while
exercising the discretionary jurisdiction disposing of petition for special
leave to appeal. The doctrine of merger can therefore be applied to the former
and not to the latter.
(iv) An order refusing special leave to appeal may be a non-speaking order
or a speaking one. In either case it does not attract the doctrine of merger.
An order refusing special leave to appeal does not stand substituted in place
of the order under challenge. All that it means is that the Court was not
inclined to exercise its discretion so as to allow the appeal being filed.
(v) If the order refusing leave to appeal is a speaking order, i.e. gives
reasons for refusing the grant of leave, then the order has two implications.
Firstly, the statement of law contained in the order is a declaration of law by
the Supreme Court within the meaning of Article 141 of the Constitution.
Secondly, other than the declaration of law, whatever is stated in the order
are the findings recorded by the Supreme Court which would bind the parties
thereto and also the court, tribunal or authority in any proceedings subsequent
thereto by way of judicial discipline, the Supreme Court being the apex court
of the country. But, this does not amount to saying that the order of the
court, tribunal or authority below has stood merged in the order of the Supreme
Court rejecting special leave petition or that the order of the Supreme Court
is the only order binding as res judicata in subsequent proceedings between the
parties, (vi) Once leave to appeal has been granted and appellate jurisdiction
of Supreme Court has been invoked the order passed in appeal would attract the
doctrine of merger; the order may be of reversal, modification or merely
(vii) On an appeal having been preferred or a petition seeking leave to
appeal having been converted into an appeal before Supreme Court the
jurisdiction of High Court to entertain a review petition is lost thereafter as
provided by Sub-rule (1) of Rule (1) of Order 47 of the C.P.C.
In Kunhayammed, Abbai Maligai was considered and it was observed that in the
facts and circumstances of that case, this Court did not approve the order
passed by the High Court. The Court noted that in Abbai Maligai, this Court did
not consider the doctrine of merger. According to the Court, a careful reading
of Abbai Maligai "brings out the correct statement of law and fortifies us
in taking the view" as taken. [see also S.
Shanmugavel Nadar v. State of T.N. & Anr., (2002) 8 SCC 361 : JT 2002
(7) SCC 568].
The matter can be looked at from a different angle as well. Suppose, a case
is decided by a competent Court of Law after hearing the parties and an order
is passed in favour of the applicant/plaintiff which is upheld by all the
courts including the final Court. Let us also think of a case where this Court
does not dismiss Special Leave Petition but after granting leave decides the
appeal finally by recording reasons. Such order can truly be said to be a
judgment to which Article 141 of the Constitution applies. Likewise, the
doctrine of merger also gets attracted. All orders passed by the
courts/authorities below, therefore, merge in the judgment of this Court and
after such judgment, it is not open to any party to the judgment to approach
any court or authority to review, recall or reconsider the order.
The above principle, however, is subject to exception of fraud. Once it is
established that the order was obtained by a successful party by practising or
playing fraud, it is vitiated. Such order cannot be held legal, valid or in
consonance with law. It is non-existent and non est and cannot be allowed to
stand. This is the fundamental principle of law and needs no further elaboration.
Therefore, it has been said that a judgment, decree or order obtained by fraud
has to be treated as nullity, whether by the court of first instance or by the
final court. And it has to be treated as non est by every Court, superior or
Hence, the argument of Mr. Venugopal cannot be upheld. Even if he is right
in submitting that after dismissal of SLPs, the respondent herein could not
have approached the High Court for recalling its earlier order passed in April,
2000 and the High Court could not have entertained such applications, nor the
recalling could have been done, in the facts and circumstances of the case and
in the light of the finding by the High Court that fraud was committed by the
land-owners in collusion with the officers of the Port Trust Authorities and
Government, in our considered view, no fault can be found against the approach
adopted by the High Court and the decision taken. The High Court, in our
opinion, rightly recalled the order, dated April 27, 2000 and remanded the case
to the authorities to decide the same afresh in accordance with law.
Mr. Venugopal also submitted that the Division Bench of the High Court in an
order dated April 27, 2000 observed that the land being a garden land having
fruit bearing trees which had been cultivated by a tenant, it did not fall
within the description of 'urban land' or 'vacant land' within the meaning of
Section 2(o) or 2(q) of the Ceiling Act and the said aspect had not been gone
into at all by the State Government. The High Court thereafter considered the
provisions of the Ceiling Act and held that the land was agricultural land and
required to be excluded from the operation of the Ceiling Act.
As to the above, we may only observe that it was never the case of
land-owners while filling a form under Section 6 of the Act that the provisions
of the Act were not applicable to the land in question because the land was
used for agriculture or horticulture purposes or that it was having fruit
bearing trees. The exclusion or non- operation of the Act was sought only on
the ground that the possession of the land had already been handed over to Port
Trust Authorities in 1972 and hence the land cannot become subject matter of
the Ceiling Act. In view of the above fact, in our opinion, the High Court was
right in passing the impugned order directing the authorities to consider all
aspects and pass an appropriate order in accordance with law.
Last but not the least. We are exercising jurisdiction under Article 136 of
the Constitution. It is discretionary and equitable in nature.? Clause (1) of
the said Article confers very wide and extensive powers on this Court to grant
special leave to appeal against any judgment, decree, determination, sentence
or order in any cause or matter passed or made by any Court or Tribunal in
India. The Article commences with a non- obstante clause, "Notwithstanding
anything in this Chapter" (i.e. Chapter IV of Part V). These words are of
overriding effect and clearly indicate the intention of the Framers of the Constitution
that it is a special jurisdiction and a residuary power unfettered by any
statute or other provisions of Chapter IV of Part V of the Constitution. It is
extraordinary in its amplitude. Its limit, when it chases injustice, is the
sky. Such power, therefore, may be exercised by this Court whenever and
wherever justice demands intervention by the highest Court of the country.
Article 136, however, does not confer a right of appeal on any party. It
confers discretion on this Court to grant leave to appeal in appropriate cases.
In other words, the Constitution has not made the Supreme Court a regular Court
of Appeal or a Court of Error. This Court only intervenes where justice, equity
and good conscience require such intervention.
In Baiganna v. Deputy Collector of Consolidation, (1978) 2 SCR 509 : (1978)
2 SCC 461; Krishna Iyer, J.
"The Supreme Court is more than a Court of appeal. It exercises power
only when there is supreme need. It is not the fifth court of appeal but the
final court of the nation. Therefore, even if legal flaws may be electronically
detected, we cannot interfere sans manifest injustice or substantial question
of public importance".
(emphasis supplied) [see also V.G. Ramachandran, 'Law of Writs'; Revised by
Justice C.K. Thakker & Mrs. M.C. Thakker; Sixth Edn; Vol.2; pp.1440-1528]
Keeping in view totality of facts and attending circumstances including serious
allegations of fraud said to have been committed by the land-owners in
collusion with officers of the respondent-Port Trust and Government, report
submitted by the Central Bureau of Investigation (CBI), prima facie showing
commission of fraud and initiation of criminal proceedings, etc. if the High
Court was pleased to recall the earlier order by issuing directions to the
authorities to pass an appropriate order afresh in accordance with law, it
cannot be said that there is miscarriage of justice which calls for
interference in exercise of discretionary and equitable jurisdiction of this
Court. We, therefore, hold that this is not a fit case which calls for our
intervention under Article 136 of the Constitution. We, therefore, decline to
Before parting with the matter, we may state that all the observations made
by us hereinabove have been made only for the purpose of deciding the legality
and validity of the order passed by the High Court. We may clarify that we may
not be understood to have expressed any opinion on merits of the matter one way
or the other.
Therefore, as and when the matter will be considered by the authorities in
pursuance of the directions of the High Court, it will be decided on its own
merits without being inhibited by the observations made by us in this judgment.
For the foregoing reasons, the appeals deserve to be dismissed and are
accordingly dismissed with costs.