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Saturday, November 23, 2013

Fraud on party also void one = Fraudulently obtained a consent decree with in 3 days on illiterate women = kept quiet for long time and again filed another suit for injunction against the same women basing on earlier decree - where the fraud came to light - All lower courts went on routine manner with out analyzing the evidence - how the decree will be passed against one sharers with out adding co sharers and how the court pass a decree with out hearing the parties under or.10, rule 1 C.P.C. - which clearly discloses a fraud = Allowed the civil appeal and set aside all decrees and judgement of lower courts = “Fraud generally lights a candle for justice to get a look at it; and rogue’s pen indites the warrant for his own arrest.” 26. Ex consequenti, the appeal is allowed and the judgment and decree of the High Court in the Second Appeal as well as the judgments and decrees of the courts below are hereby set aside and as a natural corollary the judgment and decree dated 27.11.1973 is also set aside. There shall be no order as to costs. ““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.” Smt. Badami (Deceased) By her L.R. ….. Appellant Versus Bhali … Respondent = published in http://judis.nic.in/supremecourt/helddis.aspx

            SUIT:

Fraudulent suit - Suits for permanent injunction and possession - Based on
an earlier compromise decree - Held: All facets of fraud get attracted to
the case at hand - A rustic and illiterate woman is taken to court by a
relation on the plea of creation of a lease deed and magically in a hurried
manner the plaint is presented, written statement is drafted and filed,
statement is recorded and a decree is passed within three days - It not
only gives rise to a doubt but indicates that there is some kind of foul
play - However, the trial judge who decreed the first suit on 27.11.1973
did not look at these aspects as also the requirement of O. 10, r.1, CPC -
The judgment is vitiated by fraud - When the subsequent suits were filed,
the courts below routinely followed the principles relating to consent
decree and did not dwell deep to find out how the fraud was manifestly writ
large - The foundation was a family arrangement, which was not bona fide -
No iota of evidence has been brought on record that the plaintiff had given
anything to the defendant in the arrangement - It is a matter of record
that the possession was not taken over and inference has been drawn that
possibly there was an implied agreement that the decree would be given
effect to after her death - All these reasonings are absolutely non-
plausible and common sense does not even remotely give consent to them -
The whole thing was buttressed on the edifice of fraud - The impugned
judgments and decrees are set aside - As a natural corollary, the judgment
and decree dated 27.11.1973 is also set aside - Code of Civil Procedure,
1908 - O.10, r. 1 and O. 15, r. 1.

DEEDS AND DOCUMENTS:

Family arrangement - Held: Though, a family arrangement need not be
construed narrowly and it need not be registered, but it must prima facie
appear to be genuine which is not so in the case at hand - That apart,
there was no reason to exclude the daughter and the son-in-law - It is
impossible to perceive any dispute over any property or the possibility of
it in future - On the contrary, in this so called family settlement the
whole property of the defendant is given to the plaintiff - It cannot be
accepted to be a bona fide settlement.

The plaintiff and the original defendant's late husband were the
descendants of a common ancestor. In a prior arrangement, the said
defendant got a share in the ancestral property. The plaintiff, on
24.11.1973 filed suit No. 1422 of 1973 stating that the defendant, under a
family settlement dated 1.6.1972 gave her whole share to the plaintiff and
also handed over the possession thereof to him, but since the revenue
entries continued to be in her name and there was interference with
plaintiff's possession over the suit land, the suit for declaration and
permanent injunction was filed. On the date of presentation of the plaint
itself, the written statement was filed admitting the plaint averment to be
correct and praying for decree of the suit. The suit was decreed on
27.11.1973. It was the case of the plaintiff that the revenue entries
continued to be in the name of the defendant and she remained in possession
of the suit property. He filed Civil Suit No. 401 of 1984 for permanent
injunction against the defendant restraining her from alienating the suit
land. He also filed Civil Suit No. 784 of 1984 for possession. The
defendant contested both the suits but her stand that the decree dated
27.11.1973 was obtained by fraud was not accepted and the suits were
decreed. Her appeals were also dismissed. During the pendency of the second
appeals filed by the original defendant, she died and the name of her
daughter was substituted. The second appeals were also dismissed holding
that the original defendant had failed to discharge the onus that the
initial decree dated 27.11.1973 was obtained by fraud. Aggrieved, the
daughter of the original defendant filed the appeal.

        Allowing the appeal, the Court

HELD: 1.1. Rule 1 of O. 10 of the Code of Civil Procedure, 1908 provides
for ascertainment whether allegations in pleadings are admitted or denied.
It stipulates that "at the first hearing" of the suit the court shall
ascertain from each party or his pleader whether he admits or denies such
allegations of fact as are made in the plaint or written statement (if any)
of the opposite party and as are not expressly or by necessary implication
admitted or denied by the party against whom they are made. The court is
required to record such admissions and denials. Use of the term 'first
hearing of the suit' in r. 1 has its own signification. Order 15, r. 1 lays
a postulate that where "at the first hearing" of the suit it appears that
the parties are not at issue on any question of law or of fact, the court
may at once pronounce the judgment. [Para 12] [86-E-H]

Kanwar Singh Saini v. High Court of Delhi 2012 (4) SCC 307 - relied on.

1.2. Keeping in view the pronouncement of law relating to the procedure and
the lapses committed by the trial court in the case at hand, the stand of
the original defendant, the predecessor-in-interest of the appellant, gets
fructified. All facets of fraud get attracted to the case at hand. A rustic
and illiterate woman is taken to court by a relation on the plea of
creation of a lease deed and magically in a hurried manner the plaint is
presented, written statement is drafted and filed, statement is recorded
and a decree is passed within three days. On a perusal of the decree it is
manifest that there is no reference of any kind of family arrangement and
there is total non-application of mind. It only mentions there is consent
in the written statement and hence, suit has to be decreed. Be it noted, it
was a suit for permanent injunction. There was an allegation that the
defendant was interfering with the possession of the plaintiff. What could
have transpired that the defendant would go with the plaintiff and accede
to all the reliefs. It not only gives rise to a doubt but on a first look
one can feel that there is some kind of foul play. However, the trial judge
who decreed the first suit on 27.11.1973 did not look at these aspects.
[para 13 and 25] [88-F; 95-F-G; 96-A-D]

Santosh v. Jagat Ram and another 2010 (2) SCR 429 = 2010 (3) SCC 251-
relied on.

1.3. It is a matter of grave anguish that in the first suit the court had
not applied its mind to the real nature of the family arrangement. It has
been submitted on behalf of the appellant that there was no need for a
family settlement because the defendant had got a part of the property in
an earlier family arrangement. She had a daughter and a son-in-law and she
had no cavil with plaintiff. She had also to support herself. Though, a
family arrangement need not be construed narrowly and it need not be
registered but it must prima facie appear to be genuine which is not so in
the case at hand. [para 13] [89-D-E]

Krishna Beharilal (dead) by his legal representatives v. Gulabchand and
others 1971 Suppl. SCR 27= 1971 AIR 1041; Kale and others v. Deputy
Director of Consolidation and others 1976 (2) SCR 202 = 1976 AIR 807;
Maturi Pullaiah and another v. Maturi Narasimham and others 1966 AIR 1836;
S. Shanmugam Pillai & others v. K. Shanmugam Pillai & others. 1973 (1) SCR
570 = 1972 AIR 2069 - referred to.

1.4. If the factual matrix of the case in hand is tested on the anvil of
the decisions of this Court, the family arrangement does not remotely
appear to be a bona fide. The plaintiff had no semblance of right in the
property. All rights had already been settled and the defendant was the
exclusive owner in possession. It is difficult to visualise such a family
settlement. More so, it is absolutely irrational that the defendant would
give everything to the plaintiff in lieu of nothing and suffer a consent
decree. That apart, there was no reason to exclude the daughter and the
son-in-law. It is well nigh impossible to perceive any dispute over any
property or the possibility of it in future. On the contrary in this so-
called family settlement the whole property of the defendant is given to
the plaintiff. It cannot be accepted to be a bona fide settlement. [para
17] [93-B-E]

1.5. It is, therefore, clear as crystal that the judgment and decree passed
in civil suit No. 1422 of 1973 on 27.11.1973 are fundamentally fraudulent.
It is a case which depicts a picture that the delineation by the trial
Judge was totally ephemeral. The judgement is vitiated by fraud. [para 18]
[93-F]

S. B. Noronah v. Prem Kumari Khanna 1980 (1) SCR 281 =1980 AIR 193; S. P.
Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. and others
1993 (3) Suppl. SCR 422 = 1994 AIR 853; Smt. Shrist Dhawan v. M/s. Shaw
1991 (3) Suppl. SCR 446 = Brothers 1992 AIR 1555 Roshan Deen v. Preeti Lal
2001 (5) Suppl. SCR 23 = AIR 2002 SC 33; Ram Preeti Yadav v. U. P. Board of
High School and Intermediate Education and other 2003 (3) Suppl. SCR 352 =
(2003) 8 SC 311; and Ram Chandra Singh v. Savitri Devi and others 2003 (4)
Suppl. SCR 543 = (2003) 8 SCC 319; State of Andhra Pradesh and another v.
T. Suryachandra Rao 2005 (1) Suppl. SCR 809 =AIR 2005 SC 3110; Hamza Haji
v. State of Kerala & Anr. 2006 (4) Suppl. SCR 604 = AIR 2006 SC 3028 -
referred to.

Halsbury's Laws of England, Vol. 16 Fourth Edition para 1553 - referred to.

2.1. When the second suit was filed in 1984 for title and the third suit
was filed for possession thereafter, the courts below had routinely
followed the principles relating to consent decree and did not dwell deep
to find out how the fraud was manifestly writ large. It was too obvious to
ignore. The courts below have gone by the concept that there was no
adequate material to establish that there was fraud, though it was
telltale. That apart the foundation was the family arrangement, which was
not bona fide. [para 25] [96-D-E]

2.2. No iota of evidence has been brought on record that the plaintiff had
given anything to the defendant in the arrangement. It is easily
perceivable that the rustic woman was also not old. Though the decree was
passed in 1973 wherein it was alleged that the defendant was already in
possession, she lived up to 1992 and expired after 19 years. It is a matter
of record that the possession was not taken over and inference has been
drawn that possibly there was an implied agreement that the decree would be
given effect to after her death. All these reasonings are absolutely non-
plausible and common sense does not even remotely give consent to them. The
whole thing was buttressed on the edifice of fraud. The impugned judgments
and decrees are set aside. As a corrolary the judgment and decree dated
27.11.1973 is also set aside. [para 25-26] [96-G-H; 97-A, C-D]

Case Law Reference:

2010 (2) SCR 429 relied on para 10
2012 (4) SCC 307 relied on para 12
1971 Suppl. SCR 27 referred to para 14
1976 (2) SCR 202 referred to para 15
1966 AIR 1836 referred to para 16
1973 (1) SCR 570 referred to para 16
1980 (1) SCR 281 referred to para 18
1993 (3) Suppl. SCR 422 referred to para 20
1991 (3) Suppl. SCR 446 referred to para 22
2001 (5) Suppl. SCR 23 referred to para 22
2003 (3) Suppl. SCR 352 referred to para 22
2003 (4 ) Suppl. SCR 543 referred to para 22
2005 (1) Suppl. SCR 809 referred to para 22
2006 (4) Suppl. SCR 604 referred to para 24

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1723 of 2008.

From the Judgment & Order dated 1.9.2006 of the High Court of Punjab &
Haryana at Chandigarh in R.S.A. No. 2001 and 2002 of 1988.

V.K. Jhanji, Jyoti Mendiratta, Deeksha Ladi for the Appellant.

Neeraj Kr. Jain, Sanjay Singh, Pratham Kant, Ugra Shankar Prasad for the
Respondent.

    IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL No. 1723 OF 2008


Smt. Badami (Deceased) By her L.R.                       ….. Appellant

                             Versus

Bhali                                        … Respondent







                             J U D G M E N T



Dipak  Misra, J.



      The singular question that arises for consideration in this appeal  by
way of special leave under Article 136  of  the  Constitution  of  India  is
whether the judgment and decree dated 27.11.1973 passed by the learned  sub-
Judge, Kaithal in Civil Suit No. 1422  of  1973  is  to  be  declared  as  a
nullity being vitiated by fraud and manifest  illegality  being  writ  large
and thereby the claim of right, title and interest and possession  based  on
the said judgment and decree by the respondent-plaintiff in  the  subsequent
suits, namely, Civil Suit No. 401 of 1984 and Civil Suit  No.  784  of  1984
which have been decreed and got affirmance by a composite  order  passed  by
the Additional District Judge, Kurukshetra in  Civil  Appeal  No.  19/13  of
1987 and Civil Appeal No. 18/13 of 1986 and further  gained  concurrence  by
the learned single Judge  of  the  High  Court  of  Punjab  and  Haryana  at
Chandigarh in R.S.A. Nos. 2001 of  1988  and  2002  of  1988,  is  bound  to
collapse and founder.

2.    To appreciate the controversy, it is incumbent to travel to  the  year
1973 as to how the original suit was instituted,  proceeded  and  eventually
decreed.  For the said purpose it is necessary to note that
one Dai Ram  was
the common ancestor.  He had two sons, namely, Dinda and Rachna.
Dinda  had
one son, namely, Roora and Rachna had one son, namely,  Ram  Chand.   Badami
was the widow of Roora and Bhali is the son of Ram  Chand.   Risali  is  the
daughter of Roora and Badami.
Bhali, respondent  herein,  instituted  Civil
Suit No. 1422 of 1973 on 24.11.1973 alleging that Badami was  the  owner  of
1894/9549 share of the ancestral  land  and  had  received  it  at  a  prior
arrangement.  
When she was in possession, there was a family  settlement  on
1.6.1972 and in that family settlement the defendant gave  her  whole  share
to the plaintiff-Bhali and the possession of the same was also  handed  over
in pursuance of that settlement.  
As pleaded,  the  defendant-Badami  agreed
that he would get the revenue entries of the suit land corrected  in  favour
of the plaintiff but the name of the defendant continued  as  owner  in  the
revenue records and despite the request of  the  plaintiff  therein  not  to
interfere with the possession there was interference.  
Hence,  he  had  been
compelled to file a suit for declaration and for permanent injunction.

3.    On the date of presentation of the plaint, the defendant in the  suit,
Badami, filed the written statement admitting the assertions in  the  plaint
to be correct and, in fact, prayed for decree of the suit.  The learned sub-
Judge, Kaithal on 27.11.1973 decreed the suit.

4.    As the facts would reveal, in spite of the  said  consent  decree  the
record of  entries  stood  in  the  name  of  Badami  and  she  remained  in
possession  and  enjoyed  the  same.  
The  respondent-  Bhali,  thereafter,
initially  instituted  Civil  Suit  No.  401  of  1984   seeking   permanent injunction against her restraining from alienating the land in  any  manner.
The learned trial Judge relied on the  earlier  judgment  and  decree  dated 27.11.1973, did not accept the stand put forth by  the  defendant  that  the said decree was  obtained  by  fraud  and  passed  a  decree  for  permanent injunction restraining the  defendant  from  alienating  the  suit  land  to
anyone in any manner.

5.    In the second suit for possession, the learned trial Judge framed  two
vital issues, namely,
whether the plaintiff was owner of the suit  land  and
whether the impugned decree dated 27.11.1973 is null, void and  not  binding on the rights of the defendants and, thereafter, came to hold  that  factual matrix would show that the decree was passed three  days  after  and  Badami had appeared in the court, and hence, the decree  was  validly  passed.  
On
appeals being preferred, the learned Additional District Judge affirmed  the
said findings further elaborating the reasoning that Badami had appeared  in
court, made a statement and given the thumb mark and  further  she  had  not
been able to discharge the onus that the decree was obtained by fraud.   The
appellate court gave credence to the family settlement and  also  took  note
of the fact that the parties were related and hence, there was no reason  to
discard the family settlement; and that it was a common  phenomenon  that  a
member of a family is  given  property  out  of  love  and  affection.   The
learned  appellate  Judge  opined  that  though  after  the   decree   dated
27.11.1973 the possession was with the appellant and the revenue  entry  had
not been corrected, that  was  possibly  due  to  an  implied  understanding
between the parties that the arrangement under the decree  would  be  worked
out only after the death of the appellant,  i.e.,  Badami.   Being  of  this
view, the learned appellate Judge dismissed both the appeals.

6.     Being  aggrieved,  Badami,  the  original  defendant,  preferred  two
Regular Second Appeals, namely, R.S.A. Nos. 2001 of 1988 and 2002  of  1988.
During the pendency of the appeals, she expired and  Risali,  her  daughter,
was substituted by order dated 21.2.1992 in both the appeals.   The  learned
single Judge who dealt with the appeals by the impugned judgment  dated  1st
September, 2006 referred to the issues framed by the  learned  trial  Judge,
the analysis made by the  courts  below  and  came  to  hold  that  original
defendant No. 1 had failed to discharge the onus  that  the  initial  decree
dated 27.11.1973  was  obtained  by  fraud  inasmuch  as  she  had  given  a
statement in court and put the thumb  impression  and  that  the  conclusion
drawn by the courts below were justified being based on facts  and  did  not
warrant any interference as no substantial question of law was involved.

7.    We have  heard  learned  counsel  for  the  parties  and  perused  the
records.

8.    To appreciate the controversy, it is appropriate to refer  to  para  3
of the plaint presented on 24.11.1973.
 It reads as follows:-

           “3.   That the parties  entered  into  a  family  settlement  on
           1/6/72 and in that family  settlement  the  defendant  gave  her
           whole share to the plaintiff and the possession of the same  was
           also handed over to the plaintiff in pursuance  of  that  family
           settlement, the defendant also agreed  that  he  would  get  the
           revenue entries of the suit land  corrected  in  favour  of  the
           plaintiff, but the name of the defendant is still continuing  as
           owner in the revenue records.”

9.    From the perusal of the averments made in the plaint,  it  is  obvious
that emphasis was  laid  on  the  family  settlement  and  handing  over  of
possession.  It is interesting to note that the first  appellate  court  had
opined that the possession remained with  Badami  and  the  revenue  entries
were not corrected and continued possibly due to implied  understanding  but
the plaintiff  was  compelled  to  file  the  second  suit  when  there  was
interference.  It has come out on the testimony of evidence of  Badami  that
she was absolutely illiterate.  The only ground on  which  the  courts  have
proceeded that there was a consent decree and allegation of  fraud  had  not
been established.

10.   In this context, we may usefully refer to the decision in  Santosh  v.
Jagat Ram and another[1] 
wherein this Court was  dealing  with  a  situation
almost similar to the present nature.
 In the said case the day  the  plaint
was presented, on the same day written statement was  also  filed,  evidence
of the plaintiff and the defendant was recorded and the  judgment  was  also
made ready along with a decree on the  same  day.
 In  that  context,  this
Court observed as follows: -

           “This, by itself, was sufficient to raise serious doubts in  the
           mind of the courts.  Instead, the appellate  court  went  on  to
           believe the evidence of Dharam Singh (DW 1), record keeper,  who
           produced the files of the summons.  One wonders as to  when  was
           the suit filed and when did the Court issue a summons and how is
           it that on the same day, the written statement was  also  ready,
           duly drafted by the other side lawyer S.K. Joshi (DW 3).”

The Bench further proceeded to observe as follows: -

           “We are anguished to see the attitude of the Court,  who  passed
           the decree on the basis of a plaint  and  a  written  statement,
           which were filed on the same day.  We are also surprised at  the
           observations made by the appellate court that such  circumstance
           could not, by itself, prove the fraudulent nature of the decree.

                 A fraud puts an  end  to  everything.  
 It  is  a  settled
           position in law that such a decree is nothing, but a nullity.”

11.   From the aforesaid decision it becomes quite  clear  that  this  Court
expressed a sense of surprise the way the suit in that case  proceeded  with
and also expressed its  anguish  how  the  court  passed  a  decree  on  the
foundation of a plaint and a written statement that were filed on  the  same
day.

12.   It is seemly to note that the Code of  Civil  Procedure  provides  how
the court trying the suit is required to deal with  the  matter.   Order  IV
Rule 1 provides for suit to be commenced  by  plaint.   Order  V  Rule  1(1)
provides when the suit has been duly instituted, a summon may be  issued  to
defendant to appear and answer the claim on a day to be  therein  specified.
As per the proviso to Order V Rule  1  no  summon  need  be  issued  if  the
defendant appears and admits the claim of  the  plaintiff.   Order  X  deals
with the examination of parties by the court.  Rule 1 of  Order  X  provides
for ascertainment whether allegations in pleadings are admitted  or  denied.
It stipulates that “at the first  hearing”  of  the  suit  the  court  shall
ascertain from each party or his pleader whether he admits  or  denies  such
allegations of fact as are made in the plaint or written statement (if  any)
of the opposite party and as are not expressly or by  necessary  implication
admitted or denied by the party against whom they are made.   The  court  is
required to record such admissions and denials.   Use  of  the  term  ‘first
hearing of the suit’ in Rule 1 has its own signification.
Order XV  Rule  1
lays a postulate that where “at the first hearing” of the  suit  it  appears
that the parties are not at issue on any question of law  or  of  fact,  the
court may at once pronounce the judgment. 
 Recently, this  Court  in  Kanwar
Singh Saini v. High Court of Delhi[2], while dealing  with  the  concept  of
first hearing, speaking through one of us (Dr. B.S. Chauhan, J)  has  opined
thus: -

           “12.  The suit was filed on  26-4-2003  and  notice  was  issued
           returnable just after three days i.e. on 29-4-2003 and  on  that
           date the written statement was filed and the appellant  appeared
           in person and the statement was recorded.  Order 10 Rule  1  CPC
           provides for recording the statement of the parties to the  suit
           at the “first hearing of the suit” which comes after the framing
           of the issues and then the suit is posted  for  trial  i.e.  for
           production of evidence.  Such an interpretation emerges from the
           conjoint reading of the provisions of Order 10 Rule 1, Order  14
           Rule 1(5) and Order 15 Rule 1 CPC.  The cumulative effect of the
           aboverffered provisions of CPC comes to that the “first  hearing
           of the suit” can never be earlier than the date  fixed  for  the
           preliminary examination of the parties  and  the  settlement  of
           issues.  On the date of appearance of the defendant,  the  court
           does not take up the case for hearing or apply its mind  to  the
           facts of the case, and it is only after filing  of  the  written
           statement and  framing  of  issues,  the  hearing  of  the  case
           commences.  The hearing presupposes the existence of an occasion
           which enables the parties to be heard by the court in respect of
           the cause.  Hearing, therefore, should be first in point of time
           after the issues have been framed.

           13.   The date of  “first  hearing  of  a  suit”  under  CPC  is
           ordinarily understood to be the date on which the court proposes
           to apply its mind to the contentions raised by  the  parties  in
           their respective pleadings and also to the  documents  filed  by
           them for the purpose of framing  the  issues  which  are  to  be
           decided in the suit.  Thus, the question of  having  the  “first
           hearing  of  the  suit”  prior  to  determining  the  points  in
           controversy between the parties i.e. framing of issues does  not
           arise.  The words “first day of hearing” do not mean the day for
           the return of the summons or the returnable date, but the day on
           which the court applies its mind to the  case  which  ordinarily
           would be at the time when either the issues  are  determined  or
           evidence is taken. (Vide Ved Prakash Wadhwa v. Vishwa  Mohan[3],
           Sham Lal v. Atme Nand Jain Sabha[4],  Siraj  Ahmad  Siddiqui  v.
           Prem  Nath  Kapoor[5]  and  Mangat  Singh  Trilochan  Singh   v.
           Satpal[6].”

After so stating, it has been further observed as follows: -

                 “From the above fact situation, it  is  evident  that  the
           suit was filed on 26-4-2003 and in response to the notice issued
           in that case, the appellant-defendant appeared on  29.4.2003  in
           person and filed his written statement.  It was on the same  day
           that his statement had been recorded by the court.  We failed to
           understand as to what  statutory  provision  enabled  the  civil
           court to record the statement of the appellant-defendant on  the
           date of filing the written statement.  The suit itself has  been
           disposed of on the basis of his statement within three weeks  of
           the institution of the suit.”


13.         Keeping in view the aforesaid pronouncement of law  relating  to
the procedure and the lapses committed by the trial court  in  the  case  at
hand, the stand of the original defendant,  the  predecessor-in-interest  of
the present appeal gets fructified.  From the evidence  brought  on  record,
it is perceptible that Badami was a rustic and  an  illiterate  woman;  that
she had one daughter who was married and there was no  animus  between  them
to exclude her from the whole property;  and  that  the  concept  of  family
arrangement is too farfetched to give any kind of credence. That apart,  the
filing of written statement, the  recording  of  statement  and  taking  the
thumb impression in a hurried manner further nurtures the  stance  that  the
defendant was totally unaware as to what had  happened.   The  averments  in
the plaint show that the plaintiff was put in  possession  but  as  she  was
going to alienate the property because of record of  rights  reflected  name
of Badami, the suit was filed for permanent injunction restraining her  from
alienating in any manner and  the  defendant  conceded  to  the  same.   The
averments in the plaint show that the defendant had refused the  request  of
the plaintiff on 11.11.1973 not to interfere with  the  possession  yet  she
accompanied him to suffer a consent decree.  It is worth noting  that  there
is evidence on record that she was brought to the court premises to  execute
the lease deed for a period of two years and she had faith in Bhali.  It  is
a matter of grave anguish that in the first suit the court had  not  applied
its mind to the  real  nature  of  the  family  arrangement.    The  learned
counsel for the appellant has submitted that there was no need for a  family
settlement because Badami had got a part  of  the  property  in  an  earlier
family arrangement.  She had a daughter and a  son-in-law  and  she  had  no
cavil  with  plaintiff.   She  had  also  to  support  herself.   He  fairly
submitted that the family arrangement need not be construed narrowly and  it
need not be registered but it must prima facie appear to  be  genuine  which
is not so in the case at hand.

14.   In this regard we may refer with  profit  to  certain  authorities  of
this Court.  In Krishna Beharilal (dead) by  his  legal  representatives  v.
Gulabchand and others[7]  a compromise decree had come  into  existence,  on
the  basis  of  a  compromise  deed  which  specifically  stated  that   the
properties given to one Pattobai  were  to  be  enjoyed  by  her  as  “Malik
Mustakil”.  This Court referred  to  certain  decisions  in  the  field  and
opined that the circumstances under which the compromise  was  entered  into
as well as the language used in the  deed  did  not  in  any  manner  go  to
indicate that the estate given  to  Pattobai  was  anything  other  than  an
absolute estate.  The High Court had treated the  compromise  decree  to  be
illegal on the basis that a Hindu widow could  not  have  enlarged  her  own
rights by entering into a compromise in a suit.  This  Court  observed  that
this was not a compromise  entered  into  with  third  parties.   It  was  a
compromise entered into with the presumptive reversioners and in  that  case
the issue would be totally different.  Further, the question  arose  whether
there could have been any family settlement.  In that  context,  this  Court
held as follows:-

           “8……It may be noted that Lakshmichand and Ganeshilal  who  along
           with Pattobai were the principal parties to the compromise  were
           the grand-children of Parvati who was the aunt  of  Bulakichand.
           The parties to  the  earlier  suit  were  near  relations.   The
           dispute between the parties was in respect of a certain property
           which was originally  owned  by  their  common  ancestor  namely
           Chhedilal.  To consider a settlement as a family arrangement, it
           is not necessary that the parties to the compromise  should  all
           belong to one family.  As observed by this Court in  Ram  Charan
           Das v. Girija Nandini Devi[8], the word “family” in the  context
           of the family arrangement is not to be understood  in  a  narrow
           sense of being a group of persons who are recognised in  law  as
           having a right of succession or having a claim to a share in the
           property in dispute.  If the dispute which  is  settled  is  one
           between near relations then the settlement of such a dispute can
           be considered as a family arrangement- see Ramcharan Das’s case,
           1965-3 SCR 841=(AIR 1966 SC 323) (supra).

           9.     The  Courts  lean  strongly  in  favour  of  the   family
           arrangements to bring about harmony in a family and  do  justice
           to its various members and avoid in anticipation future disputes
           which might ruin them all.”



15.   In Kale and others v. Deputy Director of Consolidation and  others[9],
it has been held that the object of the arrangement  is  to  protect  family
from filing long drawn litigation or perpetual strifes which mar  the  unity
and solidarity of the family and create hatred and  bad  blood  between  the
various members of the family.   Their Lordships opined that the  family  is
to be understood in the wider sense so as to include  within  its  fold  not
only close relations or legal heirs but even  those  persons  who  may  have
some sort of antecedent title, a semblance of claim or even if they  have  a
spes successionis so that future disputes are sealed forever and  litigation
are avoided. What could be the binding effect and essentials  for  a  family
settlement were expressed thus:-

           “10.   In  other  words  to  put  the  binding  effect  and  the
           essentials of a family settlement in  a  concretised  form,  the
           matter  may  be  reduced  into  the  form   of   the   following
           propositions:

           (1) The family settlement must be a  bona  fide  one  so  as  to
           resolve family disputes and rival claims by a fair and equitable
           division or allotment of properties between the various  members
           of the family;

           (2) The said settlement must be  voluntary  and  should  not  be
           induced by fraud, coercion or undue influence;

           (3) The family arrangements may be even oral in  which  case  no
           registration is necessary;

           (4) It is well settled that registration would be necessary only
           if the terms of the family arrangement are reduced into writing.
            Here also, a distinction should  be  made  between  a  document
           containing the terms and recitals of a family  arrangement  made
           under the document and a  mere  memorandum  prepared  after  the
           family arrangement had already been made either for the  purpose
           of the record  or  for  information  of  the  court  for  making
           necessary mutation.  In such a case the memorandum  itself  does
           not create or extinguish any rights in immovable properties  and
           therefore does not fall within the  mischief  of  Section  17(2)
           (sic) (Sec. 17  (1)  (b)?)  of  the  Registration  Act  and  is,
           therefore, not compulsorily registrable;

           (5) The members who may be parties  to  the  family  arrangement
           must have some  antecedent  title,  claim  or  interest  even  a
           possible claim in the property  which  is  acknowledged  by  the
           parties to the settlement.  Even if one of the  parties  to  the
           settlement has no title but  under  the  arrangement  the  other
           party relinquishes all its claims or titles in favour of such  a
           person and acknowledges him to  be  the  sole  owner,  then  the
           antecedent title must be assumed and the family arrangement will
           be upheld and the Courts  will  find  no  difficulty  in  giving
           assent to the same;

           (6) Even if bona fide disputes, present or possible,  which  may
           not involve legal claims are  settled  by  a  bona  fide  family
           arrangement which is fair and equitable the  family  arrangement
           is final and binding on the parties to the settlement.”

16.   We may note that the principles stated in Maturi Pullaiah and  another
v. Maturi Narasimham and others[10] were reiterated in S.  Shanmugam  Pillai
& others v. K. Shanmugam Pillai & others.[11] in the following terms:-

           “In Maturi Pullaiah v. Maturi Narasimham, AIR 1966 SC 1836  this
           Court held that although conflict of legal claims  in  praesenti
           or in futuro is generally a condition for the validity of family
           arrangements, it is not necessarily so.  Even bona fide disputes
           present or possible, which may not involve legal claims would be
           sufficient.  Members of a joint Hindu family  may,  to  maintain
           peace or to bring about harmony in the family, enter into such a
           family arrangement.  If such an agreement is entered  into  bona
           fide and the terms thereto are fair in the  circumstances  of  a
           particular case, the Courts would more readily  give  assent  to
           such an agreement than to avoid it.”

17.  If the present factual matrix tested on  the  anvil  of  the  aforesaid
decisions, the family arrangement does not remotely  appear  to  be  a  bona
fide.  Bhali had not semblance of right in the  property.   All  rights  had
already been settled and she was the exclusive owner in possession.   It  is
difficult to visualise such a family settlement.  More so, it is  absolutely
irrational that Badami would give everything to Bhali  in  lieu  of  nothing
and suffer a consent decree.  That apart, there was  no  reason  to  exclude
the daughter and the son-in-law.  Had there been any likely  possibility  of
any  future  legal  cavil  between  the  daughter  and  Bhali  the  same  is
understandable.  It is well nigh impossible to  perceive  any  dispute  over
any property or the possibility of it in future.  On the  contrary  in  this
so called family settlement the whole property of Badami is given to  Bhali.
 We are unable to accept it to be a bona fide settlement.

18.   From the aforesaid analysis it is clear as crystal that  the  judgment
and decree passed  in  civil  suit  No.  1422  of  1973  on  27.11.1973  are
fundamentally fraudulent.  It is a case which depicts  a  picture  that  the
delineation by the learned Judge was totally ephemeral.   The  judgement  is
vitiated by fraud.

19.   Presently, we shall refer as to how this Court has dealt with  concept
of fraud.  In S. B. Noronah v. Prem Kumari  Khanna[12]  while  dealing  with
the concept of estoppel and fraud a two-Judge Bench has stated  that  it  is
an old maxim that estoppels are odious, although  considerable  inroad  into
this maxim has been made by modern law.  Even so, “a  judgment  obtained  by
fraud or collusion, even, it seems a judgment of the House of Lords, may  be
treated as a nullity”.  (See Halsbury’s Laws  of  England,  Vol.  16  Fourth
Edition para 1553).  The point is that the sanction  granted  under  Section
21, if it  has  been  procured  by  fraud  or  collusion,  cannot  withstand
invalidity because, otherwise, high public policy will be given  as  hostage
to successful collusion.

20.   In S. P. Chengalvaraya Naidu (dead) by L.Rs.  v. Jagannath  (dead)  by
L.Rs. and others[13] this court commenced the  verdict  with  the  following
words:-

           ““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.”

21.   In the said case it was clearly stated that  the  courts  of  law  are
meant for imparting justice between the parties and one  who  comes  to  the
court, must come with  clean  hands.   A  person  whose  case  is  based  on
falsehood has no right to approach the Court.   A  litigant  who  approaches
the court, is bound to produce all the documents executed by him  which  are
relevant to the litigation.  If a vital document is  withheld  in  order  to
gain advantage on the other side he would be  guilty  of  playing  fraud  on
court as well as on the opposite party.

22.   In Smt. Shrist Dhawan v. M/s. Shaw Brothers[14]  it  has  been  opined
that fraud and collusion vitiate even the most  solemn  proceedings  in  any
civilised system of jurisprudence.   It  has  been  defined  as  an  act  of
trickery or deceit.  The aforesaid principle has been reiterated  in  Roshan
Deen v. Preeti Lal[15], Ram Preeti Yadav v. U. P. Board of High  School  and
Intermediate Education and other[16] and Ram Chandra Singh v.  Savitri  Devi
and others[17].

23.   In State of Andhra Pradesh and  another  v.  T.  Suryachandra  Rao[18]
after referring to the earlier decision this court observed as follows:-

           “In Lazaurs Estate Ltd. v. Beasley[19] 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 solemnity.   ”

24.   Yet in another decision Hamza Haji v. State of Kerala  &  Anr.[20]  it
has been held that no court will allow itself to be used  as  an  instrument
of fraud and no court, by way of rule of evidence and procedure,  can  allow
its eyes to be closed to the fact it is  being  used  as  an  instrument  of
fraud.  The basic principle is that a party  who  secures  the  judgment  by
taking recourse to fraud should not be enabled to enjoy the fruits  thereof.


25.   It would not be an exaggeration but on the contrary an  understatement
if it is said that all facets of fraud get attracted to the  case  at  hand.
A rustic and illiterate woman is taken to court by a relation  on  the  plea
of creation of a lease deed and magically in a hurried manner the plaint  is
presented, written statement is drafted and  filed,  statement  is  recorded
and a decree is passed within three days.  On a perusal of the decree it  is
manifest that there is no reference of any kind of  family  arrangement  and
there is total non-application of mind.  It only mentions there  is  consent
in the written statement and hence, suit has to be decreed.   Be  it  noted,
it was a suit for permanent injunction.  There was an  allegation  that  the
respondent was interfering with  the  possession  of  the  plaintiff.   What
could have transpired that the defendant would go  with  the  plaintiff  and
accede to all the reliefs.  It not only gives rise  to  a  doubt  but  on  a
first look one can feel that there is some kind of foul play.  However,  the
learned trial Judge who decreed the first suit on 27.11.1973  did  not  look
at these aspects.  When the second suit was filed in 1984 for title and  the
third suit was  filed  for  possession  thereafter,  the  courts  below  had
routinely followed the principles relating to consent  decree  and  did  not
dwell deep to find out how the fraud was manifestly writ large.  It was  too
obvious to ignore.  The courts below have gone by  the  concept  that  there
was no adequate material to establish that there was fraud,  though  it  was
telltale.  That apart, the foundation was the family arrangement.   We  have
already held that it was not bona fide, but, unfortunately the courts  below
as well as the High Court have held that it is a common phenomenon that  the
people in certain areas give their property to their  close  relations.   We
have already indicated that by giving the entire property  and  putting  him
in possession she would have been absolutely landless and  would  have  been
in penury.  It is unimaginable that a person would divest herself  of  one’s
own property in entirety in lieu of nothing.  No iota of evidence  has  been
brought on record that Bhali, the respondent herein, had given  anything  to
Badami in the arrangement.  It is easily perceivable that the  rustic  woman
was also not old.  Though the decree was  passed  in  1973  wherein  it  was
alleged that the defendant was already in possession, she lived up  to  1992
and expired after 19 years.  It is a matter of record  that  the  possession
was not taken over and inference has been drawn that possibly there  was  an
implied agreement that the decree would be given effect to after her  death.
 All these reasonings are absolutely non-plausible  and  common  sense  does
not even remotely give consent to them.  It is fraudulent all the way.   The
whole thing was buttressed on the edifice of fraud and it needs  no  special
emphasis to state that what is pyramided on fraud is  bound  to  decay.   In
this regard we may profitably quote a statement by a great thinker:

           “Fraud generally lights a candle for justice to get  a  look  at
           it; and rogue’s pen indites the warrant for his own arrest.”

26.   Ex consequenti, the appeal is allowed and the judgment and  decree  of
the High Court in the Second Appeal as well as the judgments and decrees  of
the courts below are hereby  set  aside  and  as  a  natural  corollary  the
judgment and decree dated 27.11.1973 is also set aside.  There shall  be  no
order as to costs.




                              ............................................J.
                                                          [DR. B.S. Chauhan]






                              ............................................J.
                                                               [Dipak Misra]
New Delhi;
May 22, 2012.

-----------------------
[1] (2010) 3 SCC 251
[2] (2012) 4 SCC 307
[3] (1981) 3 SCC 667 : AIR 1982 SC 816
[4] (1987) 1 SCC 222 : AIR 1987 SC 197
[5] (1993) 4 SCC 406 : AIR 1993 SC 2525
[6] (2003) 8 SCC 357 : AIR 2003 SC 4300
[7] AIR 1971 SC 1041
[8] (1965) 3 SCR 841 =  AIR 1966 SC 323
[9] AIR 1976 SC 807
[10]  AIR 1966 SC 1836
[11] AIR 1972 SC 2069
[12]  AIR 1980 SC 193
[13] AIR 1994 SC 853
[14] AIR 1992 SC 1555
[15] AIR 2002 SC 33
[16] (2003) 8 SC 311
[17]  (2003) 8 SCC 319
[18] AIR 2005 SC 3110
[19]  (1956) 1 QB 702
[20] AIR 2006 Sc 3028

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