S.P Chengalvaraya
Naidu Vs. Jagannath [1993] INSC 458 (27 October 1993)
KULDIP
SINGH (J) KULDIP SINGH (J) SAWANT, P.B. CITATION: 1994 AIR 853 1994 SCC (1) 1
JT 1993 (6) 331 1993 SCALE (4)277
ACT:
HEADNOTE:
The
Judgment of the Court was delivered by KULDIP SINGH, J.- "Fraud avoids all
judicial acts, ecclesiastical or temporal" observed Chief Justice Edward
Coke of England about three centuries ago. It is
the settled proposition of law that a judgment or decree obtained by playing
fraud on the court is a nullity and non est in the eyes of law. Such a
judgment/decree by the first court or by the highest court has to be treated as
a nullity by every court, whether superior or inferior. It can be challenged in
any court even in collateral proceedings.
2. Predecessor-in-interest
of the respondents-plaintiffs filed application for final decree for partition
and separate possession of the plaint-properties and for mesne profits. The
appellants-defendants contested the application on the ground that the
preliminary decree, which was sought to be made final, was obtained by fraud
and, as such, the application was liable to be dismissed. The trial Judge
accepted the contention and dismissed the 3 application for grant of final
decree. The respondents- plaintiffs went in appeal before the High Court. A
Division Bench of the High Court went through plethora of case-law and finally
allowed the appeal and set aside the order of the trial court. This appeal is
by way of certificate granted by the High Court.
3. One
Jagannath was the predecessor-in-interest of the respondents. He was working as
a clerk with one Chunilal Sowcar. Jagannath purchased at court auction the
properties in dispute which belonged to the appellants. Chunilal Sowcar had
obtained a decree and the court sale was made in execution of the said decree. Jagannath
had purchased the property in the court auction on behalf of Chunilal Sowcar,
the decree-holder. By a registered deed dated November 25, 1945, Jagannath relinquished all his rights in the property in favour
of Chunilal Sowcar. Meanwhile, the appellants who were the judgment-debtors had
paid the total decretal amount to Chunilal Sowcar. Thereafter, Chunilal Sowcar,
having received the decretal amount, was no longer entitled to the property
which he had purchased through Jagannath. Without disclosing that he had
executed a release deed in favour of Chunilal Sowcar, Jagannath filed a suit
for partition of the property and obtained a preliminary decree. During the pendency
of the suit, the appellants did not know that Jagannath had no locus standi to
file the suit because he had already executed a registered release deed,
relinquishing all his rights in respect of the property in dispute, in favour
of Chunilal Sowcar. It was only at the hearing of the application for final
decree that the appellants came to know about the release deed and, as such,
they challenged the application on the ground that non- disclosure on the part
of Jagannath that he was left with no right in the property in dispute,
vitiated the proceedings and, as such, the preliminary decree obtained by Jagannath
by playing fraud on the court was a nullity. The appellants produced the
release deed (Ex. B- 1 5) before the trial court. The relevant part of the
release deed is as under:
"Out
of your accretions and out of trust vested in me, purchased the schedule
mentioned properties benami in my name through court auction and had the said
sale confirmed. The said properties are in your possession and enjoyment and
the said properties should henceforth be held and enjoyed with all rights by
you as had been done:
So far
if any civil or criminal proceedings have to be conducted in respect of the
said properties or instituted by others in respect of the said properties you
shall conduct the said proceedings without reference to me and shall be held
liable for the profits or losses you incur thereby. All the records pertaining
the aforesaid properties are already remaining with you.
4. The
High Court reversed the findings of the trial court on the following reasonings:
"Let
us assume for the purpose of argument that this document, Ex. B-15, was of the
latter category and the plaintiff, the benamidar, had 4 completely divested himself
of all rights of every description. Even so, it cannot be held that his failure
to disclose the execution of Ex. B-15 would amount to collateral or extrinsic
fraud. The utmost that can be said in favour of the defendants is that a
plaintiff who had no title (at the time when the suit was filed) to the
properties, has falsely asserted title and one of the questions that would
arise either expressly or by necessary implication is whether the plaintiff had
a subsisting title to the properties. It was up to the defendants, to plead and
establish by gathering all the necessary materials, oral and documentary, that
the plaintiff had no title to the suit properties. It is their duty to obtain
an encumbrance certificate and find out whether the plaintiff had still a
subsisting title at the time of the suit. The plaintiff did not prevent the
defendants, did not use any contrivance, nor any trick nor any deceit by which
the defendants were prevented from raising proper pleas and adducing the
necessary evidence. The parties were fighting at arm's length and it is the
duty of each to traverse or question the allegations made by the other and to
adduce all available evidence regarding the basis of the plaintiff's claim or
the defence of the defendants and the truth or falsehood concerning the same. A
party litigant cannot be indifferent, and negligent in his duty to place the
materials in support of his contention and afterwards seek to show that the
case of his opponent was false. The position would be entirely different if a
party litigant could establish that in a prior litigation his opponent
prevented him by an independent, collateral wrongful act such as keeping his
witnesses in wrongful or secret confinement, stealing his documents to prevent
him from adducing any evidence, conducting his case by tricks and
misrepresentation resulting in his misleading of the Court.
Here,
nothing of the kind had happened and the contesting defendants could have
easily produced a certified registration copy of Ex. B-15 and non-suited the
plaintiff;
and,
it is absurd for them to take advantage of or make a point of their own acts of
omission or negligence or carelessness in the conduct of their own defence."
The High Court further held as under:
"From
this decision it follows that except proceedings for probate and other
proceedings where a duty is cast upon a party litigant to disclose all the
facts, in all other cases, there is no legal duty cast upon the plaintiff to
come to Court with a true case and prove it by true evidence. It would cut at
the root of the fundamental principle of law of finality of litigation
enunciated in the maxim 'interest reipublicae ut sit finis litium' if it should
be held that a judgment obtained by a plaintiff in a false case, false to his
knowledge, could be set aside on the ground of fraud, in a subsequent
litigation." Finally, the High Court held as under:
"The
principle of this decision governs the instant case.
At the
worst the plaintiff is guilty of fraud in having falsely alleged, at the time
when 5 he filed the suit for partition, he had subsisting interest in the
property though he had already executed Ex. B-15. Even so, that would not
amount to extrinsic fraud because that is a matter which could well have been
traversed and established to be false by the appellant by adducing the
necessary evidence.
The
preliminary decree in the partition suit necessarily involves an adjudication
though impliedly that the plaintiff has a subsisting interest in the
property." 5. The High Court, in our view, fell into patent error.
The
short question before the High Court was whether in the facts and circumstances
of this case, Jagannath obtained the preliminary decree by playing fraud on the
court. The High Court, however, went haywire and made observations which are
wholly perverse. We do not agree with the High Court that "there is no
legal duty cast upon the plaintiff to come to court with a true case and prove
it by true evidence". 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. 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.
6. The
facts of the present case leave no manner of doubt that Jagannath obtained the
preliminary decree by playing fraud on the court. A fraud is an act of deliberate
deception with the design of securing something by taking unfair advantage of
another. It is a deception in order to gain by another's loss. It is a cheating
intended to get an advantage. Jagannath was working as a clerk with Chunilal Sowcar.
He purchased the property in the court auction on behalf of Chunilal Sowcar. He
had, on his own volition, executed the registered release deed (Ex. B-15) in favour
of Chunilal Sowcar regarding the property in dispute. He knew that the
appellants had paid the total decretal amount to his master Chunilal Sowcar.
Without disclosing all these facts, he filed the suit for the partition of the
property on the ground that he had purchased the property on his own behalf and
not on behalf of Chunilal Sowcar. Non-production and even non-mentioning of the
release deed at the trial is tantamount to playing fraud on the court. We do
not agree with the observations of the High Court that the appellants-
defendants could have easily produced the certified registered copy of Ex. B-15
and non-suited the plaintiff.
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 be guilty
of playing fraud on the court as well as on the opposite party.
6
7. We,
therefore, allow the appeal, set aside the impugned judgment of the High Court
and restore that of the trial court. The appellants shall be entitled to their
costs which we quantify as Rs 11,000.
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