State of Orissa &
Ors. Vs. Harpiya Bisoi  INSC 802 (20 April 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2656 OF 2009 (Arising
out of S.L.P. (C) No. 10223 of 2007) State of Orissa and Ors. .....Appellants
Versus Harapriya Bisoi ....Respondent (With Civil Appeal 2657/2009 @ SLP (C) No.11960/2007)
Dr. ARIJIT PASAYAT.
in these appeals is to the order passed by a Division Bench of the Orissa High
Court allowing the writ petition filed by the respondent in Writ Petition (C)
No.8282/2004 dated 27.10.2005 and the order dated 10.1.2007 passed in the
Review Petition No.13/2006 arising out of said writ petition.
background facts as highlighted by the appellants are as follows:
The dispute relates
to an alleged lease of 53.95 acres of land executed by Hatapatta dated
25.1.1933 by erstwhile intermediaries i.e. Chakradhar Mohapatra and Ramakrushna
Mohapatra in favour of one Kamala Devi. The respondent Harapriya Bishoi claimed
to be the successor in interest of Kamala Devi. Undisputedly, the alleged
Hatapatta is an unregistered document. The land is presently situated in the
capital city of Bhubaneswar in the State of Orissa. The purported Hatapatta
described the land as being for permanent cultivation but as per records or
rights published in 1930-31 the land is classified as "uncultivable"
within Anabadi Land. The land is further described as Jhudi jungle i.e. bushy
forest. The estate of intermediaries Chakradhar Mohapatra and Ramakrushna
Mohapatra is vested in the State by virtue of a Notification dated 1.5.1954
issued under Section 3 of the Orissa Estate Abolition Act, 1951 (in short the
`Act'). In respect of the land in question the Orissa Estate Abolition Case 4
of 1970 was registered. Originally the case was registered as OEA 18 of 1967
with OEA Collector, Cuttack. On transfer of certain villages from Cuttack
district to Puri District, the case was transferred to OEA Collector,
Bhubneshwar and was re-numbered as OEA Case No.4 of 1970.
By order dated
6.1.1971 in the said OEA case the OEA Collector set aside the disputed lease
deed on the ground of not being genuine. The Collector found that since the
lands were lying fallow, the rent receipts were not genuine. The Ekpadia or
Zamabandi Register in the Tahsil Officer had no mention of Kamala Devi as a lessee.
The lease was
unregistered even though vast tracts of land were transferred. It was thus held
that the lease deed was back dated and was created with the object of defeating
the purpose of the Act. The said order dated 6.1.1971 was upheld by Additional
District Magistrate, Puri by order dated 28.5.1974.
Between the period
1962 to 1973 settlement proceedings were carried out under the Orissa Survey
and Settlement Act, 1958 (in short the `Settlement Act'). By publication dated
6.12.1973, the State was recorded as the owner/title holder of the entire land
of 1056.8 acres under Khatian No.1076 of village Gadakana of which the disputed
land is a part. Further, by Revenue Department Notification No.13699-EA-1-
ND-1/74/R published in the Extraordinary Gazette No.371 dated 18.3.1974, the
Government of Orissa notified that the intermediaries interest of all
intermediaries in respect of all estates other than those which have vested in
the State have passed to and became vested in the State free from all encumbrances.
The order dated
28.5.1974 was challenged before the Orissa High Court by filing OJC No.882 of
1974. The High Court by order dated 29.10.1976 directed the OEA Collector,
Bhubneshwar to examine the matter afresh by issuing notice to the lessor and the
lessee and also to ensure that the interest of the State was protected.
Pursuant to the order of the High Court dated 29.10.1976 remanding the matter
to the OEA Collector, the Collector heard the matter afresh and by order dated
24.4.1989 held that the lease was entered into prior to 1.1.1946. But he found
that the claimant was only in possession of 7 acres of land and hence
recommendation was made only for registering a settlement in respect of such 7
acres of land. Significantly, the General Administration Department (in short
GA Department) was not brought on record in the proceedings. The record was
then submitted to the Board of Revenue. By order dated 27.4.1991, the Board of
Revenue held that due enquiry had not been made as per the orders of the High
Court in the earlier writ petition and the matter was returned to the Collector
for fresh enquiry.
order of OEA Collector dated 24.4.1989 was challenged in OJC 2063 of 1992 in
the High Court. There was, however, no challenge to the order passed by the
Board of Revenue dated 27.4.1991. By order dated 2.11.1992 the High Court
allowed the writ petition being of the view that the finding of the Collector
was to the effect that the lease was not executed after 1.1.1946, so as to
defeat the provisions of the Act. Therefore, the OEA Collector had no
jurisdiction to proceed further in the matter. Thus (a) the determination of
the extent of possession of the parties and (b) referral of the matter to the
Board of Revenue was beyond jurisdiction of the Collector. The High Court
quashed the order of the Collector directing settlement of portion of the
leased property and declared the proceedings before the Board of Revenue to be
The High Court
confined its order only to issue of jurisdiction and the scope of power under
Section 5(i) and there was no finding recorded regarding the genuineness of the
lease dated 25.1.1933. Additionally, the GA Department of the State which is
the relevant Department under the Orissa Government Rules of Business was not a
party in the writ petition.
After the death of
Kamala Devi, her purported successor Kishore Chandra Pattnaik filed a writ
petition bearing No.OJC 15984 of 1997 praying for a direction to the State to
accept rent in respect of the disputed property. Again, the GA Department was
not arrayed as a party in the case at the time of filing of the writ petition.
The GA Department was later arrayed as a party pursuant to the order dated
3.8.2000 passed in said OJC. One Anup Kumar Dhirsamant who was the Power of
Attorney holder of Kishore Chandra Pattnaik executed a sale deed dated 6.3.2000
covering 23.30 acres of land on behalf of the latter in favour of the present
respondent who is also the mother of Dhirsamant. Thus, the respondent came into
the picture as a vendee of Kishore Chandra Pattnaik who in turn is the son of
Kamala Devi. Kishore Chandra Pattnaik claimed that the original power of
attorney did not empower the holder to sell the land.
His plea was that the
aforesaid sale was in pursuance of a forged and interpolated document. The sale
deed dated 6.3.2000 was an impounded document for evasion of stamp duty. On
8.4.2002, a Settlement Rent Objection case under the Settlement Act bearing
case No.4013 of 2002 was instituted by the Assistant Settlement Officer,
Gadakna on the strength of the petition filed by GA Department for recording
the case land in favour of GA Department. The petition was allowed on
30.12.2002 in favour of the GA Department. Against the said order, Settlement
Appeal cases were preferred by Kishore Chandra Pattnaik and present respondent
Harapriya Bisoi. The appeals were disposed of by order dated 7.10.2004 and the
record of rights in favour of GA Department was directed not to be interfered
with. The respondent also filed a Civil Suit bearing No.2/12 of 2004 before
learned Civil Judge, Senior Division, Bhubaneswar, for a declaration of right,
title and interest in respect of disputed land. The IAs were dismissed and the
Civil Court held that the right, title and interest of the present respondent
had not been determined finally by OJC 2063 of 1992. It was held that the
findings of the High Court related only to the power and jurisdiction of the
Collector and the Board of Revenue. Respondent filed OJC 8282 of 2004 seeking a
direction to the State to accept rent from her in respect of the case land, for
a declaration of tenancy in her favour and for an injunction against the State
restraining them from interfering with her possession. By order dated
27.10.2005 the High Court allowed the writ petition and that is the subject
matter of challenge in one of the present appeals.
It is to be noted
that in its order dated 27.10.2005 the High Court relied upon the earlier
judgment in OJC 2063 of 1992 and held that in view of the finding in that case
Kamala Devi and Kishore Chandra Pattnaik were deemed to be tenants under the
State government under Section 8(1) of the Act and the present respondent being
successor in interest of Kamala Devi was to step into her shoes and has to be
treated as a tenant under the Act. The relevant findings of the High Court in
the judgment are as follows:
"(i) In paras 10
and 11 of the judgement of the High Court in OJC No. 2063/1992 it was held that
the lease deed having been executed prior to 1.1.1946 5 and the same have been
found to be a genuine document, the OEA Collector could not have proceeded with
the case any further and he should have dropped the proceeding.
(ii) In the
subsequent paras in the judgment in OJC No. 2063/1992, the Court held that the
OEA Collector had no jurisdiction to decide the question of actual possession
and make a recommendation to the Board of Revenue for concurrence.
passed by the Board of Revenue in pursuance of the references of the case by
the OEA Collector shall be taken to be non-est. The proceedings initiated under
S. 5 (i) of the OEA Act shall be taken to have been dropped."
(iii) This Court
while disposing of the earlier writ application taking note of S. 5 (i) has
held that Late Kamla Devi was a tenant under the ex-intermediaries before the
vesting and on the date of vesting and was in possession of the entire disputed
property - hence Late Kamla Devi was a deemed tenant under S. 8 (1) of the OEA
(iv) In view of the
decision of the High Court in OJC No. 2063/1992, late Kamla Devi and thereafter
her successor Kishore Chandra Pattnaik are deemed to be tenants under the State
Government and therefore the Tahasildar, Bhubaneswar was duty bound to collect
rent from them.
(v) Kishore Chandra
Pattaik being deemed to be a tenant under the State Government, the,
Petitioner, Harpriya Bishoi, has stepped into his shoes after purchasing the
land from him and, consequently, the Petitioner is to be treated as a tenant
under the State and rent is to be collected from her."
support of the appeals, learned counsel for the State submitted that the High
Court has completely mis-construed the decision in OJC 2063 of 1992. In the
said judgment the High Court had not returned any finding or expressed any
observation with regard to the genuineness of the lease deed of 1933. The only
issue before the High Court was whether the OEA Collector had exercised its
powers correctly under Section 5(i) of the Act. No further issue was under
consideration of the High Court. Only the scope and jurisdiction of the
Collector and the Board of Revenue was decided. In the said decision the High
Court had not returned any finding that late Kamala Devi was a tenant under the
ex-intermediaries before the vesting and on the date of vesting and was in
possession of the entire disputed property. The High Court has erroneously
recorded the said finding in the impugned judgment. Therefore, the High Court
was in error by holding that Kamala Devi and thereafter her successor Kishore
Chandra Pattnaik were deemed to be tenants under Section 8(1) of the Act. It is
pointed out that the proceedings in OEA Case No.4 of 1970 were under Section
5(i) of the Act and not under Section 8(1) of the Act. Neither the order of OEA
Collector in OEA Case No.4 of 1970 dated 24.4.1989 nor the High Court's order
in OJC 2063 of 1992 recognizes the predecessors in interest of the respondent
as tenants under Section 8(1) of the Act. The OEA Collector had categorically
held in the order dated 24.4.1989 that the plea of the claimants that the
proceedings to be treated as one under Section 8(1) does not hold water. The
OEA Collector was therefore conscious of the fact that there was no exercise of
power under Section 8(1) of the Act, but only under Section 5(i) of the Act.
Further, the High
Court was in error in its interpretation of Section 5(i) of the Act. The
settlement of the lease in favour of the lessee under the first proviso of
Section 5(i) has to be necessarily confirmed by a member, Board of Revenue.
has also been highlighted that a decision of this Court in State of Orissa v. Brundaban
Sharma (1995 Supp (3) SCC 249) has been completely lost sight of. The
conceptual different between Section 5(i) of the Act and Section 8 has been
lost sight of.
It was clearly
observed in Brundaban's case (supra) that the order of the Collector under
Section 5(i) of the Act is required to be confirmed by Board of Revenue even if
Collector upholds genuineness of the lease. Several gross acts of fraud have
been committed by the respondent and/or others involved. This clearly
invalidates every action. The vendor's claims are pending adjudication before
various courts. The record of rights has attained finality in the settlement
proceedings and the High Court should not have unsettled them in the manner
done. Therefore, it is submitted that the impugned judgment of the High Court
cannot be maintained.
the other hand, learned counsel for the respondent submitted that consequences
of vesting and the finding of the Collector that the lease was prior to
1.1.1946 and is a genuine one has been confirmed in the earlier judgment. The
same has attained finality. The State of Orissa was represented by the
Secretary to Government, Revenue Department, Bhubneshwar and the Member, Board
of Revenue was also a party. It is submitted that the decision in Brundaban's
case (supra) was rendered in a different set up and has no application to the
facts of the present case.
factors need to be noted in the present case.
Brundaban's case (supra) this Court held that even in a case where the OEA
Collector "decides not to set aside the lease, he should have referred the
case to the Board of Revenue. The object of conferment of such power on the
Board of Revenue appears to be to prevent collusive or fraudulent acts or
actions on the part of the intermediaries and lower level officers to defeat
the object of the Act." This Court further held that even if the OEA
Collector decides that a lease was purported to have been granted before
1.1.1946 and is not liable to be set aside, without reference or confirmation
by the Board of Revenue, such lease would not attain finality The judgment
finally concludes that, "the' order passed by the Tehsildar (exercising
powers as the OEA Collector) without confirmation by the Board is non est. A
non est order is a void order and it confers no title and its validity can be
questioned or invalidity be set up in any proceeding or at any stage."
is important to note, that in the facts of the present case, the Member, Board
of Revenue in its order dated 27.4.1991 while considering the decision of the
OEA Collector in OEA Case No. 4 of 1970, had observed that a detailed enquiry
had not been made by the OEA Collector "to ascertain who was in possession
of the case land prior to 1.1.1946 and from 1.1.1946 to 1.5.1954 (date of
vesting of estate) and thereafter". The Member, Board of Revenue, had
further stated that, "the OEA Collector should have verified the records
to ascertain who were the ex-intermediaries (lessors) and if they had right to
alienate the land and if they have got compensation u/ s 28 of the OEA
Act". Further, "the O.Ps did not press their claim for a considerable
period of time" and "after notice was published in the newspaper
'Prajatantra' dated 22.7.87, a number of interveners have preferred their
claims before the OEA Collector", who have not been examined.
Member, Board of Revenue in its order had concluded that, "the case land
are within Bhubaneswar Municipality where the capital of state has been
established and a number of Government institutions have developed.. In view of
the above points it is necessary on the part of the OEA Collector to conduct a
such confirmation by Member, Board of Revenue, the order of the OEA Collector
had not attained finality, and hence, the lease deed in favour of Kamala Devi
did not attain finality.
provisions of the Act need to be noted.
2(h) defines an `intermediary' as follows:
with reference to any estate means a proprietor, sub-proprietor, landlord, land
holder, malguzar, thikadar, gaontia, tenure-holder, under-tenure holder and
includes an inamdar, a jagirdar, Zamindar, Illaquedar, Khorposhdar, Parganadar,
Sarbarakar and Maufidar including the ruler of an Indian State merged with the
State of Orissa and all other holders or owners of interest in land between the
raiyat and the State."
2(hh) defines as `intermediary interest' as an estate or any rights or interest
therein held or owned by or vested in an Intermediary.
as the above definitions would show, an `intermediary' and an `intermediary
interest' cover all the holders or owners of interest in land between the State
and the 'Raiyat' i.e. the actual cultivator or tiller of the soil. This is in
line with the object and purpose of the 1951 Act i.e. to establish a direct
relationship between the tiller and the State, and to abolish all intermediary
interests, by whatever name called.
is the actual tiller of the soil, and is defined in section 2(n) as:
'Raiyat' means any
person holding the land for the purpose of cultivation and who has acquired the
right of occupancy according to the tenancy law or rules for the time being in
force in that area or in the absence of such law or rules, the custom prevalent
in that area.
3 of the Act empowers the State to declare,, by notification, that the estate
specified in the notification has passed to and become vested in the State free
from all encumbrances. In similar vein, Section 3A empowers the State to
declare by notification that the intermediary interests of all intermediaries
or a class of intermediaries in the whole or part of the estate have passed to
and become vested in the State free from all encumbrances.
a notification being issued under the provisions of Sections 3, 3A or 4 of the
Act, the entire estate vests in the State free from encumbrances and the
intermediary ceases to have any interest in such estate other than the
interests expressly saved under the Act.
Where a lease or
transfer has been made prior to 1.1.1946, solely with the object of defeating
the provisions of the Act or to claim higher compensation, Section 5(i) empowers
the collector to set aside such lease, settlement or transfer and take
possession of the land from such person.
virtue of Section 8, any person who immediately before the vesting of an estate
in the State government was in possession of any holding as a tenant under an
intermediary, would on the from the date of the vesting, be deemed to be a
tenant of the State government.
The words 'holding as
a tenant' mean the `Raiyat' and not any other class of tenant:
Reference in this
regard may be drawn to the definition of `holding' in the Orissa Tenancy Act,
1913. `Holding' means a parcel or parcels of land held by a raiyat and forming
the subject of a separate tenancy".
8 thus confers protection only on the `Raiyat' i.e. the actual tiller of the
a `lease' and `lessee' on the one hand are defined separately from the 'Raiyat'
under the Act. Thus, the mere execution of a lease by the intermediary in
favour of a person would not confer the status of a 'raiyat' on the lessee nor
would protect the possession of such lessee under Section 8. In fact, a `lease'
would amount to a transfer of an interest of the intermediary in the land to
the lessee. In such a situation, far from being a tenant protected under
Section 8, the lessee would in fact step into the shoes of the intermediary
with his interest being liable for confiscation and his entitlement limited to
compensation from the State. On the other hand, for protection under Section 8,
one has to be a Raiyat cultivating the land directly and having the rights of
occupancy under the tenancy laws of the State. Thus, a `lessee' who is not
actually cultivating the land i.e. who is not a 'raiyat', would not be within
the protection of Section 8 of the Act. Section 2(h) of the Act in its
residuary part states that `intermediary' would cover all owners or holders of
interest in land between the raiyat and the State. In Kumar Bimal Chandra Sinha
V. State of Orissa, (1963) 2 SCR 552, this Court while considering the scope of
the Act has held as follows:
"the position in
law is that `estate" includes the interest, by whatever' name called, of
all persons, who hold some right in land between the State at the apex and the
raiyat at the base. That is to say, the Act is intended to abolish all intermediaries
and rent receivers and to establish direct relationship between the State, in
which all such interests vest, after abolition under the Act, and the tillers
of the soil."
the facts of the present case, it is clear that the land was not under cultivation
by Kamala Devi. As per the record of rights published in 1930-31, the disputed
land is classified as Anabadi Land i.e. uncultivable. The land is further
described in the records as Jhudi jungle, i.e. bush forest. In addition, by
order dated 6.1.1971 in OEA Case 4 of 1970, the OEA Collector, Bhubaneshwar had
found that the lands were lying fallow and were not in physical possession of
any person. The land thus not being cultivated, Kamala Devi cannot prima facie
be considered as a 'Raiyat' under the Act.
is the stand of the appellant-State that the 'Hatapatta' on the basis of which
Kamala Devi has claimed her title is an unregistered document. Section 107 of
the Transfer of Property Act, 1882 (in short the `T.P. Act') read with Section
17 of the India Registration Act, (in short the `Registration Act') mandates
that the conveyance of title through a written instrument of any immovable
property worth more than Rs.100 for a period of one year or more must be
registered. If such an instrument is not registered then Section 49 of the
Registration Act read with Section 91 of the Indian Evidence Act, 1872 (in
short the `Evidence Act') precludes the adducing of any further evidence of the
terms and contents of such a document. [See Sri Sita Maharani v. Chhedi Mahto
(AIR 1955 SC 328). There is a further requirement of registration of the
instrument of conveyance/agricultural lease under Sections 15 and 16 of the
Orissa Tenancy Act, 1913 (in short the `Tenancy Act').
is further submitted that even presuming that the 'Hatapatta' is legal and
valid, it would, make Kamla Devi a 'tenure-holder' as opposed to a 'raiyat'.
Section 2(h) of the Act defines `intermediary' to include 'tenure-holder'.
Thus, a "tenure holder" being an "intermediary" under the Act-
the rights and liabilities of such tenure holder would stand extinguished under
to the proviso to Section 5(5) of Tenancy Act where the area held by the tenant
exceeds 33 acres the tenant shall be presumed to be a `tenure-holder' (which
includes her successors-in-interest) until the contrary is proved. As under the
`Hatapatta', purportedly more than 53.95 acres of land has been given by way of
lease by the ex-intermediary to Kamala Devi, she or her successor-in-interest
is presumed to be a `tenure-holder' and, therefore, an `intermediary' under the
is highlighted by learned counsel for the appellant, as various claims on prime
government land in the city of Bhubaneswar have been surfacing on the basis of
fraudulent title papers (called 'Hatapattas') allegedly to have been issued by
ex-- intermediaries, the State Government in the General Administration
Department, has handed over the issue of fraudulent 'Hatapattas' to the Crime
Branch, CID, Cuttack for inquiry and necessary legal action vide Capital Police
Station Case No.178/2005 dated 20.5.2005. An interim report of the
Inspector/CID-Crime Branch dated 31.8.2007 with respect to the suit land has
Crime Branch Report states that the Power of Attorney through which the suit
land has been sought to be alienated in favour of the Respondent herein has
been tampered and manipulated by the Power of Attorney holder, Anup Kumar
Dhirsamant, Managing Director, M/s Milan Developers & Builders (P) Ltd. The
vendor, Kishore Chandra Pattnaik had not given any powers of alienation to his
Power of Attorney holder Anup Kumar Dhirsamant. The respondent Harapriya Bisoi
is the mother of the Power of Attorney holder. The Crime Branch also states
that Anup Kumar Dhirsamant had interpolated the deed of Power of Attorney
giving himself powers to enter into a sale deed so as to be able to alienate
the property in favour of his mother, Harapriya Bisoi, the respondent herein.
The report concludes that prima facie offences u/s 420/468/471/477A/167/120B of
the Indian Penal Code, 1860 (in short `IPC'), inter-alia, have been made out
against respondent Harapriya Bisoi and Anup Kumar Dhirsamant.
has also come to light that the Sale Deed (RSD) No.1196/2000 dated 6.3.2000
executed in favour of Harapriya Bisoi, the Respondent herein, has been
impounded for non-payment of adequate stamp duty with the deficit stamp duty
and registration fee amounting to about Rs.1.03 crores.
Settlement Rent Objection Case No. 4013/2002 under the Settlement Act, the
Asst. Settlement Officer by its order dated 10.3.2003 had recorded the suit
land in favour of the G.A. Department.
the Respondent filed Settlement Appeal Case, being Suit No. 205 of 2003, to set
aside the above order. The Settlement Officer by its order dated 7.10.2004 had
dismissed the appeal holding that the draft. Record of Rights in respect of the
suit land shall not be interfered with. The officer returned the following
(1) On perusal of the
impugned order passed by the Asst. Settlement Officer in the said objection
case it is revealed that necessary field enquiry was made in presence of the
(2) It is observed
that there exists no such field/plot as found in the not final map in respect
of suit land relating to Hal Plot Nos. 7590 Ac 3.000, 7592 Ac.3.400, 7626 Ac
1.940 and 7646 Ac.5.000 - the map in respect of those plots are imaginary.
(3) The land relating
to Hal Plot No. 7646 Ac 5.000 have been allotted to Sainik School since the
year 1962-63 and comes under the premises of Sainik School.
possession of suit land by the appellant is found to be disputed with others
like Dijabar Behera S/o Bhima Behera and Golakh Behera S/o Kesab Behera.
(5) Besides, an area
of Ac 2.300 dec. out of the suit land i.e. Sabik Plot No. 4706 along with its
adjoining land to the extent of Ac. 39.399 dec. have been leased to the
Government of India, Ministry of Railways, for the purpose of construction of
office and residential complex of East Coast Railway, Bhubaneswar. It is also
observed by the Asst. Settlement Officer that no jamabandi in respect of the
suit land has been opened in the Tahsil records.
(6) The Appellant
adduced no evidence as regards to acquiring of right, title, interest and
possession over the suit land which is Government land as per the finally
published ROR of the year 1973-74.
(7) Creation of
tenancy right in favour of the Appellant by way of deeming provision u/ s 8 (1)
of the Act has also not been recognized by the 15 Tahasildar,
Cuttack/Bhubaneswar; the claim of possession by the appellant over the suit
land is not confirmed.
course of hearing of the appeals, a query was made as to what is the effect of
the order of the High Court in OJC 2063 of 1992 i.e. whether it covers the area
of 7 acres or the whole area of 53.95 acres of land. Learned counsel for the
respondent submitted that in view of the finding that the order of the
Collector was indefensible, obviously the right, title and interest of the respondent
extended to the whole area. This stand is clearly unsustainable. The
Collector's order only referred to certain enquires made to confirm possession
of only 7 acres of land. The High Court apparently has not considered this
aspect. The High Court has also not considered the effect of alleged fraud and
the fact that the relevant department was not a party in the proceedings before
the High Court in OJC 2063 of 1992.
is necessary to consider the effect of fraud.
"fraud" is meant an intention to deceive; whether it is from any
expectation of advantage to the party himself or from the ill will towards the
other is immaterial. The expression "fraud" involves two elements,
deceit and injury to the person deceived.
Injury is something
other than economic loss, that is, deprivation of property, whether movable or
immovable or of money and it will include and any harm whatever caused to any
person in body, mind, reputation or such others. In short, it is a non-economic
or non-pecuniary loss. A benefit or advantage to the deceiver, will almost
always cause loss or detriment to the deceived. Even in those rare cases where
there is a benefit or advantage to the deceiver, but no corresponding loss to
the deceived, the second condition is satisfied. (See Dr. Vimla v. Delhi
Administration (1963 Supp. 2 SCR 585) and Indian Bank v. Satyam Febres (India)
Pvt. Ltd. (1996 (5) SCC 550).
"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. (See
S.P. Changalvaraya Naidu v. Jagannath (1994 (1) SCC 1).
as is well known vitiates every solemn act. Fraud and justice never dwell
together. Fraud is a conduct either by letter or words, which includes the
other person or authority to take a definite determinative stand as a response
to the conduct of the former either by words or letter. It is also well settled
that misrepresentation itself amounts to fraud. Indeed, innocent
misrepresentation may also give reason to claim relief against fraud. A
fraudulent misrepresentation is called deceit and consists in leading a man
into damage by willfully or recklessly causing him to believe and act on
falsehood. It is a fraud in law if a party makes representations, which he
knows to be false, and injury enures therefrom although the motive from which
the representations proceeded may not have been bad. An act of fraud on court
is always viewed seriously.
A collusion or
conspiracy with a view to deprive the rights of the others in relation to a
property would render the transaction void ab initio. Fraud and deception are
synonymous. Although in a given case a deception may not amount to fraud, fraud
is anathema to all equitable principles and any affair tainted with fraud
cannot be perpetuated or saved by the application of any equitable doctrine
including res judicata.
(See Ram Chandra
Singh v. Savitri Devi and Ors. (2003 (8) SCC 319).
and collusion vitiate even the most solemn proceedings in any civilized system
of jurisprudence. It is a concept descriptive of human conduct. Michael Levi
likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to,
`wing me into the easy hearted man and trap him into snares'. It has been
defined as an act of trickery or deceit. In Webster's Third New International
Dictionary "fraud" in equity has been defined as an act or omission
to act or concealment by which one person obtains an advantage against
conscience over another or which equity or public policy forbids as being
prejudicial to another. In Black's Legal Dictionary, "fraud" is
defined as an intentional perversion of truth for the purpose of inducing another
in reliance upon it to part with some valuable thing belonging to him or
surrender a legal right; a false representation of a matter of fact whether by
words or by conduct, by false or misleading allegations, or by concealment of
that which should have been disclosed, which deceives and is intended to
deceive another so that he shall act upon it to his legal injury. In Concise
Oxford Dictionary, it has been defined as criminal deception, use of false
representation to gain unjust advantage; dishonest artifice or trick. According
to Halsbury's Laws of England, a representation is deemed to have been false,
and therefore a misrepresentation, if it was at the material date false in
substance and in fact.
Section 17 of the Indian
Contract Act, 1872 defines "fraud" as act committed by a party to a
contract with intent to deceive another. From dictionary meaning or even
otherwise fraud arises out of deliberate active role of representator about a
fact, which he knows to be untrue yet he succeeds in misleading the representee
by making him believe it to be true. The representation to become fraudulent
must be of fact with knowledge that it was false. In a leading English case
i.e. Derry and Ors. v. Peek (1886-90) All ER 1 what constitutes
"fraud" was described thus: (All ER p. 22 B-C) "fraud" is
proved when it is shown that a false representation has been made (i)
knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless
whether it be true or false". But "fraud" in public law is not
the same as "fraud" in private law. Nor can the ingredients, which
establish "fraud" in commercial transaction, be of assistance in
determining fraud in Administrative Law. It has been aptly observed by Lord
Bridge in Khawaja v. Secretary of State for Home Deptt. (1983) 1 All ER 765,
that it is dangerous to introduce maxims of common law as to effect of fraud
while determining fraud in relation of statutory law.
relation to statute must be a colourable transaction to evade the provisions of
a statute. "If a statute has been passed for some one particular purpose,
a court of law will not countenance any attempt which may be made to extend the
operation of the Act to something else which is quite foreign to its object and
beyond its scope. Present day concept of fraud on statute has veered round
abuse of power or mala fide exercise of power. It may arise due to overstepping
the limits of power or defeating the provision of statute by adopting subterfuge
or the power may be exercised for extraneous or irrelevant considerations. The
colour of fraud in public law or administration law, as it is developing, is
assuming different shades. It arises from a deception committed by disclosure
of incorrect facts knowingly and deliberately to invoke exercise of power and
procure an order from an authority or tribunal. It must result in exercise of
jurisdiction which otherwise would not have been exercised. The
misrepresentation must be in relation to the conditions provided in a section
on existence or non-existence of which the power can be exercised. But
non-disclosure of a fact not required by a statute to be disclosed may not
amount to fraud. Even in commercial transactions non-disclosure of every fact
does not vitiate the agreement. "In a contract every person must look for
himself and ensures that he acquires the information necessary to avoid bad
bargain. In public law the duty is not to deceive. (See Shrisht Dhawan (Smt.)
v. M/s. Shaw Brothers (1992 (1) SCC 534).
that case it was observed as follows:
collusion vitiate even the most solemn proceedings in any civilized system of
jurisprudence. It is a concept descriptive of human conduct. Michael levi
likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to,
'wing me into the easy-hearted man and trap him into snares'". It has been
defined as an act of trickery or deceit. In Webster's Third New International
Dictionary fraud in equity has been defined as an act or omission to act or
concealment by which one person obtains an advantage against conscience over
another or which equity or public policy forbids as being prejudicial to
In Black's Legal
Dictionary, fraud is defined as an intentional perversion of truth for the
purpose of inducing another in reliance upon it to part with some valuable
thing belonging to him or surrender a legal right; a false representation of a
matter of fact whether by words or by conduct, by false or misleading
allegations, or by concealment of that which should have been disclosed, which
deceives and is intended to deceive another so that he shall act upon it to his
legal injury. In Concise Oxford Dictionary, it has been defined as criminal
deception, use of false representation to gain unjust advantage; dishonest
artifice or trick. According to Halsbury's Laws of England, a representation is
deemed to have been false, and therefore a misrepresentation, if it was at the
material date false in substance and in fact. Section 17 of the Contract Act
defines fraud as act committed by a party to a contract with intent to deceive
another. From dictionary meaning or even otherwise fraud arises out of
deliberate active role of representator about a fact which he knows to be
untrue yet he succeeds in misleading the representee by making him believe it
to be true. The representation to become fraudulent must be of the fact with
knowledge that it was false. In a leading English case Derry v. Peek [(1886-90)
ALL ER Rep 1: (1889) 14 AC 337 (HL)] what constitutes fraud was described thus
: (All Er p. 22 B-C) `Fraud is proved when it is shown that a false
representation has been made (i) knowingly, or (ii) without belief in its
truth, or (iii) recklessly, careless whether it be true or false'."
aspect of the matter has been considered by this Court in Roshan Deen v. Preeti
Lal (2002 (1) SCC 100) Ram Preeti Yadav v. U.P. Board of High School and
Intermediate Education (2003 (8) SCC 311), Ram Chandra Singh's case (supra) and
Ashok Leyland Ltd. v. State of T.N. and Another (2004 (3) SCC 1).
of a material document would also amount to a fraud on the court. (see
Gowrishankar v. Joshi Amba Shankar Family Trust (1996 (3) SCC 310) and S.P. Chengalvaraya
Naidu's case (supra).
is a conduct either by letter or words, which induces the other person or
authority to take a definite determinative stand as a response to the conduct
of the former either by words or letter. Although negligence is not fraud but
it can be evidence on fraud; as observed in Ram Preeti Yadav's case (supra).
Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, Lord Denning observed at pages
712 & 713, "No judgment of a Court, no order of a Minister can be
allowed to stand if it has been obtained by fraud. Fraud unravels
everything." In the same judgment Lord Parker LJ observed that fraud
vitiates all transactions known to the law of however high a degree of
is another statute which has great relevance to the present dispute, i.e. The
Orissa Communal Forest and Private Lands (Prohibitions of Alienation) Act, 1948
(in short `Communal Forest Land').
Maganti Subrahmanyam (dead) by his Legal Representative v. The State of Andhra
Pradesh (AIR 1970 SC 403) it was observed as follows:
"4. The purpose
of the Act was to prohibit the alienation of communal, forest and private lands
in estates in the Province of Madras and the preamble to the Act shows that it
was enacted to prevent indiscriminate alienation of communal, forest and
private lands in estates in the Province of Madras pending the enactment of
legislation for acquiring the interests of landholders in such estates and
introducing ryotwari settlement therein.
No fixed duration of
the Act was specified and it is impossible to hold that merely because of the
above preamble the Act became a temporary Act.
The definition of
`forest land' is given in Section 2(b) of the Act reading:
includes any waste land containing trees and shrubs, pasture land and any other
class of land declared by the State Government to be forest land by
notification in the Fort St. George Gazette".
Sub-section (1) of
Section 3 prohibited landholders from selling, mortgaging, converting into
ryoti land, leasing or otherwise assigning or alienating any communal or forest
land in an estate without the previous sanction of the District Collector, on
or after the date on which the ordinance which preceded the Act came into
force, namely, 27th June, 1947. Section 4(1) provided that:
of the nature prohibited by Section 3 which took place, in the case of any
communal or forest land, on or after the 31st day of October, 1939 ... shall be
void and inoperative and shall not confer or take away, or be deemed to have
conferred or taken away, any right whatever on or from any party to the
* * *"
This sub-section had
a proviso with several clauses. Our attention was drawn to clauses (iii), (iv)
and (v) of the proviso but in our opinion none of these provisos was applicable
to the facts of the case so as to exclude the operation of sub-section (1) of
Section 4. Under sub-section (3) of Section 4:
"If any dispute
arises as to the validity of the claim of any person to any land under clauses
(i) to (v) of the proviso to sub-section (1), it shall be open to such person
or to any other person interested in the transaction or to the State
Government, to apply to the District Judge of the district in which the land is
situated, for a decision as to the validity of such claim."
Under sub-section (4)
the District Judge to whom such application is made was to decide whether the
claim to the land was valid or not after giving notice to all persons concerned
and where the application was not made by the State Government, to the
Government itself, and his decision was to be final. Madras Act 26 of 1948, was
passed on April 19, 1949, being an Act to provide for the repeal of the
Permanent Settlement, the acquisition of the rights of landholders in
permanently settled and certain other estates in the Province of Madras, and
the introduction of ryotwari settlement in such estates. Apparently because of
the preamble to the Act it was contended that with the enactment of the repeal
of the Permanent Settlement by the Act of 1948, which also provided for the
acquisition of the rights of landholders in permanently settled estates, the
Act stood repealed. We fail to see how because of the preamble to the Act it
can be said that it stood repealed by the enactment of the later Act unless there
were express words to that effect or unless there was a necessary implication.
It does not stand to reason to hold that the alienation of large blocks of land
which were rendered void under the Act became good by reason of the passing of
the later Act. Our attention was drawn to Section 63 of the later Act which
"If any question
arises whether any land in an estate is a forest or is situated in a forest, or
as to the limits of a forest, it shall be determined by the Settlement Officer,
subject to an appeal to the Director within such time as may be prescribed and also
to revision by the Board of Revenue."
In terms the section
was only prospective and it did not seek to impeach any transaction which was
effected before the Act and was not applicable to transactions anterior to the
Act. In our opinion Section 56(1) of the 22 later Act to which our attention
was drawn by the learned counsel does not fall for consideration in this case
and the disputes covered by that section do not embrace the question before us.
5, Madras General
Clauses Act 1 of 1891, deals with the effect of repeals off statutes. Section
8, sub-section (f) thereof provides that:
"Where any Act,
to which this Chapter applies, repeals any other enactment, then the repeal
shall not-- (a)-(e) * * * (f) affect any investigation, legal proceeding or remedy
in respect of any such right, privilege, obligation, liability, fine, penalty,
forfeiture or punishment as aforesaid; and any such investigation, legal
proceeding or remedy may be instituted, continued or enforced, and any such
fine, penalty, forfeiture or punishment may be imposed, as if the repealing Act
had not been passed."
This shows that even
if there was a repeal any investigation started before the repeal would have to
be continued and legal proceedings under the Act could be prosecuted as if the
repealing Act had not been passed.
6. There is also no
force in the contention that unless there was a notification under Section 2(b)
of the Act declaring a particular land to be forest land, the applicability of
the Act would be excluded. The definition of `forest land' in that section is
an inclusive one and shows that `forest land' would include not only waste land
containing trees, shrubs and pasture lands but also any other class of lands
declared by Government to be forest land. This does not mean that before a
piece of land could be said to be forest land there would have to be a
notification by the Government under the Act."
view of the aforesaid conclusions we are of the considered view that the matter
needs to be re-considered by the High Court.
High Court while re-hearing the matter shall also consider the effect of the
aforesaid observations of this Court, and various aspects highlighted above.
the background of the massiveness of apparent fraud involved, effective and
participative role of officials of the State cannot be lost sight of. Without
their active and effective participation manipulation of records, tampering
with documents could not have been possible. The State would do well to persue
the matter with seriousness to unravel the truth and punish the erring
officials and take all permissible actions (including criminal action) against
every one involved.
appeals are allowed to the aforesaid extent.
(Dr. ARIJIT PASAYAT)