United
India Insurance Co. Ltd. Vs. Rajendra Singh & Ors, [2000] INSC 132 (14
March 2000)
K.T.
THOMAS & nD.P. MOHAPATRA
THOMAS,J.
Leave
granted.
L.I.T.J
If what the appellant-Insurance Company now says is true, then a rank fraud had
been played by two claimants and wangled two separate Awards from a Motor
Accident Claims Tribunal for a bulk sum. But neither the Tribunal nor the High
Court of Allahabad , before which the Insurance Company approached for annulling
the awards, opened the door but expressed helplessness even to look into the
matter and hence the Insurance Company has filed these appeals by Special
leave.
Fraud
and justice never dwell together.(Frans et jus nunquam cohabitant) is a
pristine maxim which has never lost its temper over all these centuries. Lord
Denning observed in a language without equivocation that no judgment of a
Court, no order of a Minister can be allowed to stand if it has been obtained
by fraud, for, fraud unravels everything( For a High Court in India to say that
it has no power even to consider the contention that the awards secured are the
byproducts of stark fraud played on a Tribunal, the plenary power conferred on
the High Court by the Constitution may become a mirage and peoples faith in the
efficacy of the High Courts would corrode. We would have appreciated if the
Tribunal or at least the High Court had considered the plea and found them
unsustainable on merits,if they are meritless. But when the Courts pre- empted
the Insurance Company by slamming the doors against them, this Court has to
step in and salvage the situation.
Facts
are these: One Rajendra Singh and his son Sanjay Singh (first respondent in the
respective appeals) filed two separate claim petitions before the Motor
Accident Claims Tribunal, Bulandsahar (for short the Tribunal) in 1994 praying
for awarding compensation in respect of an accident which happened on
9.11.1993. The claimants put forth-identical averments regarding the accident
which are in substance the following:
Rajendra
Singh, the father was travelling on the pillion of a two wheeler motorcycle
which was then ridden by his son Sanjay Singh and an Ambassador Car (DL
2C-9793) driven by Jai Prakash collided with the motorcycle of the claimants
and caused injuries to both of them. The ambassador car was owned by the second
respondent.
Rajendera
Singh made a claim for more than Rs. 4 lacs and Sanjay Singhs claim was even
above that (Rs.5.5 lacs).
As the
ambassador car was, at the relevant time, covered by a policy of Insurance with
the appellant Company, the claimants made the appellnat Company also a party in
the claim proceedings before the Tribunal. Though the owner of the Car as well
as the Insurance Company resisted the claims on the premise that there was no
negligence on the part of the driver of the Car, the Tribunal found the driver
guilty of negligent driving. Hence, the owner was held vicariously liable for
the damages payable to the injured claimants.Accordingly, two awards were
passed on 15.1.1998, one in favour of Rajendra Singh in a sum of Rs.3,55,000/-
and the other in favour of Sanjay Singh in a sum of Rs.
1,52,000/-.
Both the awards were to carry interest at the rate of 12% per annum from the
date of claim. An interim order was passed already for covering no fault
liability and we are told that the amount towards that had been paid by the
appellant Company.
The
awards became final as neither the owner of the ambassador car nor the
Insurance Company filed any appeal thereon. Thus far, there was no problem for
the awardees.
Hardly
four months elapsed after passing the awards, a gentleman visited the
Divisional Office of the appellant Company at Gaziabad and delivered the
photocopy of a report prepared by the Assistant Sub-Inspector of Police, subzi Mandi,
Police Station, Delhi on 9.11.1993 in which contained a narration that Sanjay
Singh and Rajendra Singh received the injuries in a different circumstance at a
different place altogether (i.e. while they were operating their own tractor,
it jutted into a ditch and in the jerk the occupants of the tractor slipped
down and sustained injuries). The gentleman who delivered the said report to
the company was prepared to disclose further details of the above accident only
on a condition that his identity would be kept in anonymity.
On
receipt of the said information, the Divisional Office of the appellant Company
made frenetic inquiries and they came across statements attributed to the
claimants and prepared by the Sub-Inspector of Police, Subzi Mandi Police
Station, Delhi, on 9.11.1993. Such statements
contained the narration that the injuries were sustained by Rajendra Singh and
Sanjay Singh in the accident which happened when the trailor trolly had slipped
into the pit.
Almost
immediately after obtaining the above information, the appellant Insurance
Company moved the Tribunal with two petitions purportly under Section 151,152
and 153 of the Code of Civil Procedure in which the appellant prayed for recall
of the awards dated 15.1.1998 on the revelation of new facts regarding the
injuries sustained by the claimants. Those applications were resisted by the
claimants solely on the ground that the Tribunal has no power of review except
to correct any error in calculating the amount of compensation and hence the
Tribunal cannot recall the awards. It appears that the Tribunal accepted the
said stand of the claimants and dismissed the application for recalling the
awards. It was in the above background that the appellant Insurance Company
moved the High Court of Allahabad with a Writ petition for quashing the awards
as well as the steps taken pursuant thereto.
Learned
Single Judge of the Allahabad High Court who dismissed the Writ petition as per
a short order passed by him stated thus:
Heard
learned counsel for the petitioner. The present Writ petition has been filed
against the order rejecting review application. There is no power of review in
the Statute. Learned Counsel for the petitioner argues that fraud has been
played. It is a question of fact, for which writ jurisdiction is not the proper
forum. The petitioner may avail himself of such legal remedy as may be
available to him. The writ petition is accordingly dismissed. There will be,
however, no order as to costs.
(underlining
supplied) Thus the Tribunal refused to open the door to the appellant Company
as the High Court declined to exercise its writ jurisdiction which is almost
plenary for which no statutory constrictions could possibly be imposed. If a
party complaining of fraud having been practised on him as well as on the court
by another party resulting in a decree, cannot avail himself of the remedy of
review or even the writ jurisdiction of the High Court, what else is the
alternative remedy for him? Is he to surrender to the product of the fraud and
thereby became a conduit to enrich the imposter unjustly? Learned Single Judge
who indicated some other alternative remedy did not unfortunately spell out
what is the other remedy which the appellant Insurance Company could pursue
with.
No one
can possibly fault the Insurance Company for persistently pursuing the matter
up to this court because they are dealing with public money. If they have
discovered that such public fund, in a whopping measure, would be knocked off
fraudulently through a fake claim, there is full justification for the
Insurance Company in approaching the Tribunal itself first. At any rate the
High Court ought not have refused to consider their grievances. What is the
legal remedy when a party to a judgment or order of court later discovered that
it was obtained by fraud? Jagnnath (dead) by Lrs. & ors. {1994 (1) SCC 1}
the two Judges Bench of this Court held:
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 {1996 (5) SCC 550} another two
Judges bench, after making reference to a number of earlier decisions rendered
by different High Courts in India, stated the legal position thus:
Since
fraud affects the solemnity, regularity and orderliness of the proceedings of
the Court and also amounts to an abuse of the process of Court, the Courts have
been held to have inherent power to set aside an order obtained by fraud practised
upon that Court. Similarly, where the Court is misled by a party or the Court
itself commits a mistake which prejudices a party, the Court has the inherent
power to recall its order.
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.
In the
result, we allow these appeals, set aside the impugned orders and quash the
awards passed by the Tribunal in favour of the claimants. We direct the
Tribunal to consider the claims put forth by the claimants afresh after
affording a reasonable opportunity to the appellant Insurance Company to
substantiate their allegations.
Opportunity must be afforded to the claimants
also to rebut the allegations.
We
make it clear that while disposing of the claims afresh the Tribunal shall not
be trammeled by any of the observations, if any, made by us on the merits of
the allegations.
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