Patna High Court
Ekawari And Ors. vs Jadunandan Kamat And Ors. on 31 October, 1972
Equivalent citations: AIR1974PAT191, AIR 1974 PATNA 191
JUDGMENT Madan Mohan Prasad, J.
1. This second appeal is directed against the dismissal of the plaintiffs' suit for setting aside a decree on the ground of fraud and for recovery of possession of the properties involved.
2. Briefly stated, the plaintiffs' case is that they were in possession of certain lands from which they were forcibly dispossessed by defendant No. 1 on the 15th January, 1956. It is said that the said defendant had claimed to have pur-chased those lands in an execution sale arising out of a suit for money filed by the defendant against the plaintiffs. It is their case that they had no knowledge either of the money suit or of the decree passed therein or the proceedings in execution arising therefrom. The processes in all those proceedings are alleged to have been suppressed fraudulently. On this allegation of fraud, the plaintiffs prayed in this suit for setting aside the aforesaid decree and the execution sale and in consequence thereof for restoration of possession of the properties to the plaintiffs. It is said that it was only after their dispossession in January, 1956, that they had made inquiries and learnt in February, 1956, about the aforesaid fraud. The suit was filed on the 3rd January, 1959.
3. The first defendant, who alone contested the suit, raised the plea that he had taken a sale of certain other lands from plaintiff No. 1, Sibu Sah, for a sum of Rs. 375/-, but he could not get possession thereof, because those lands actually belonged to the branch of the uncle of Sibu Sah, and he wanted a refund of the money paid, but, not having got it back from Sibu, he had filed a money suit and got a decree against the plaintiffs Nos. 1 to 3, who alone were in existence at that tune. The aforesaid de-cree was put into execution and he had purchased those lands. During the course of the execution proceeding, once Sital Sah had appeared and filed a claim under Order XXI, Rule 58, of the Code of Civil Procedure. It is said that Sibu had actu-ally made a Farzi transaction of sale in his favour. The miscellaneous judicial case was, however, dismissed. Thereupon. Sital Sah filed a title suit under Order XXI, Rule 63 of the Code against this defendant and the plaintiffs. This was also dismissed for default. This led to a miscellaneous judicial case under Order IX, Rule 9 of the Code, which was dismissed on merits. There was an appeal, which also was dismissed. It is said that the notices were served on the plaintiffs in all those proceedings and that they had definite knowledge of the decree and the execution relating to the money suit,
4. Both the courts below came to the conclusion that the decree obtained in the money suit and the execution sale were tainted with fraud. Both the courts held further that the plaintiffs had know-ledge of the aforesaid decree and execu-tion as far back as December, 1952, when notices were served in the title suit under Order XXI, Rule 63, of the Code, and the miscellaneous judicial case under Order IX, Rule 9, of the Code. The trial court, however, held that the suit would have been barred, but, in view of the provisions of Section 44 of the Evidence Act, it was open to the plaintiffs to treat the decree as a nullity, and get the reliefs prayed for. The lower appellate court, however, came to the conclusion that this suit was specially framed as a suit for setting aside a decree on the ground of fraud, which would attract the provisions of Article 95 of the Limitation Act, and the suit was barred from, the date of knowledge. The trial court had thus decreed the suit, which was! reversed by the lower appellate court., Hence this appeal.
5. Learned counsel for the appellants has raised an interesting point, which appeared attractive in the beginning, but on a closer scrutiny I find that it is not tenable. The point raised is that in view of Section 44 of the Evidence Act, the plaintiffs should be held to be entitled to show that the decree was fraudulent and get rid of its effects, without asking for a declaration to the effect that the aforesaid decree was obtained by fraud and thus without getting hit by the law of limitation prescribed in Article 95 of the Limitation Act. Reliance has been placed on the decision In the case of Bishnunath Tiwary v. Mirchi (AIR 1955 Pat 66),
6. In the aforesaid case, the appeal had arisen out of a suit for redemp-tion of a usufructuary mortgage and for possession and mesne profits. The other side, however, had pleaded an earlier decree and court sale of the lands in question. The plaintiff had met the point by saying that the aforesaid sale was tainted with fraud and, therefore, not binding. Admittedly, no suit for setting aside the earlier decree or court sale had been filed by the plaintiffs within the time prescribed. The question was whether it was open to the plaintiff to say that the decree and sale were tainted with fraud. There was a difference of opinion between the learned Judges, who heard the case initially, Lakshmi Kant Jha, C. J., and Rouben, J., one holding that in view of Section 44 of the Evidence Act, it was open to the plaintiff to show in a collateral proceeding that the decree and sale were fraudulent and not binding, the other learned Judge taking a contrary view. The matter was then placed before a third learned Judge of this Court, Ramaswami, J. He agreed with Lakshmi Kant Jha. C. J. So far as the question of interpretation of Section 44 of the Evidence Act was concerned, in the words of the learned Chief Justice, the point for decision was-
"Whether the plaintiff can treat the sale as a nullity on the ground of the fraud of the mortgagee and seek redemp-tion of the mortgage without getting the sale set aside."
It may be mentioned that in that case, as in the instant case, both the courts below had held that the previous sale was vitiated by fraud of the mortgagee, but the plaintiff had no knowledge of the money suit or of the court sale. The learned Chief Justice, after reviewing the cases on the point, held-
"But whatever may be the legal position of a party in England if a judgment or sentence be vitiated by his fraud, the law on the point is clear in India and well settled on authorities. It is true that so long as judgment, decree or order of a court of competent jurisdiction stands, it cannot be made the subject of a direct attack."
"Therefore, if a party to the proceeding in which it was obtained proceeds to enforce it in execution the adverse party affected by it cannot challenge its legality on the ground of fraud or collusion. But it is the substantive right of every person affected by a judgment, decree or order of a court of competent jurisdiction to institute a suit for its avoidance on the ground of fraud or collusion within the time prescribed by the statute of limitation, and if the suit succeeds, the direct effect of it is avoided."
But the law does not require a judgment, decree or order to be set aside or reversed for a collateral attack on the ground of fraud, for Section 44, Evidence Act provides;
"Any party to a suit or other proceeding may show that any judgment, order or decree which is relevant under Section 40, 41 or 42, and which has been proved by the adverse party, was delivered by a Court not competent to deliver it, or was obtained by fraud or collusion."
The learned Chief Justice, therefore, held that the decree was a nullity for the purpose of a collateral attack. Reuben, J., however, held that a decree of a competent court tainted with fraud is not a nullity, it is only voidable. In his view, Section 44 of the Evidence Act did not make a fraudulent judgment, order or decree a nullity for all purposes and the power to challenge it is limited to cases in which the judgment or order is relevant under Section 40, 41 or 42 of that Act. He held that Section 44 had no application to the facts of the case. Ramaswarni, J., held that fraud does not make a judicial act or transaction void but only voidable at the instance of the parties defrauded; that such a judicial act may be impeached on the ground of fraud or collusion in an active proceeding for rescission by way of a suit or by asking for a review of the judgment. The learned Judge, however, held that "the judgment may also be impeached in a collateral proceeding in which fraud may be set up as a defence to an action on the judgment or as an answer to a plea of estoppel or res judicata founded upon the judgment". Applying the principle to the case before him, the learned Judge held that Section 40 of the Evidence Act applied and the plaintiff was entitled, under Section 44 of the same Act, to show that both the decree and sale in the execution proceeding were vitiated by fraud of the mortgagee and should be ignored and treated as a nullity in that suit.
7. It follows from the decision of the aforesaid case that it is open to a plaintiff in ,a suit, other than a suit for setting aside a decree or sale, to chal-lenge a previous decree or sale as a nullity for the purpose of that case on the ground of its being tainted with fraud, and that Section 44 of the Evidence Act enabled a party to do so, and in such a case Article 95 and the period of limitation prescribed thereby would not stand in the way.
8. The trial court, applying this principle of law to the present case, decreed the suit. The lower appellate Court did not do so on the ground that the present suit is one which is for the relief of setting aside the previous decree and sale themselves on the ground of fraud and Article 95 of the Limitation Act, therefore, stood in the wav of the plaintiffs. I am of the view that the lower appellate court has correctly applied the principle of law laid down in the aforesaid case.
9. In order to decide whether the principle laid down in the reported case would apply to the present case, the frame, nature and scope of the present suit has to be determined. It is quite evident from the frame of the suit as evidenced by the plaint itself that the plaintiffs having stated all the details of nature of and the facts relating to the fraud, have prayed for the first relief, which is setting aside the decree and treating it as a nullity on the ground of fraud. Relief No. 2 says that "as a consequence of relief No. 1," a decree for possession be given. The other reliefs prayed for are mesne profits and costs. Learned counsel for the appellants has tried to meet the situation by asking me to hold that it is merely a suit for possession and relief No. 1 was inartistic ally framed. I have been asked to ignore relief No. 1 and to hold that even though the plaintiffs were not entitled to get a declaration that the aforesaid decree and sale were fradulent, they were still entitled to get a decree for possession, irres-pective of the first relief. I am afraid, I am unable to do so. It is well settled that the nature of a suit has to be determined upon a reading of the entire plaint and finding out the essentials which go to make up the case. Reading the plaint as a whole I find that the present suit is nothing but a suit for setting aside the decree and the sale on the ground of fraud with the allegation that the plaintiffs had no knowledge of the aforesaid fraudulent decree and sale, until a particular date. The suit would have been within time if the plaintiffs had succeeded in proving the date of knowledge alleged by them. It appears, however, that both the courts have found against them on this point and held that their case with regard to the date of knowledge is not true and it was not in February, 1956, that they came to have the knowledge of the aforesaid decree and sale, but that they had knowledge thereof long before, i.e., in December, 1952. It is not disputed that if the suit he, really and in essence, a suit for avoidance of the aforesaid decree and sale, it was barred by the law of limitation, if the date of knowledge alleged by the plaintiffs is not accepted, as has been done by the courts below. The decision in AIR 1955 Pat 66 has therefore, no application to the facts of the present case. That was not a suit for setting aside a decree or sale on the ground of fraud. On the other hand, the plaintiff of that suit had not even mentioned a word about any fraud in respect of the previous decree or sale. Reliance was placed by the defendants on the facts of the previous decree and sale and it was only in defence that the plaintiff had raised the plea in the suit for redemption that the aforesaid decree and sale were nullity, tainted as they were with fraud. I am not prepared to accept that the decision in the case of Bishnunath Tiwary, AIR 1955 Pat 66 (supra) is an authority for the proposition that even though a person cannot file a suit for setting aside a decree or sale on the ground of fraud, the remedy being barred by Article 95 of the Limitation Act, it is still open to him to file a suit for the same purpose, claiming the same relief and yet ask the court to ignore the nature of the suit and urge that it is open to him, in view of Section 44 of the Evidence Act, to show that the aforesaid decree or sale is tainted with fraud and a nullity. In this view of the matter, I am unable to hold that the plaintiffs can take any advantage of the concurrent findings in their favour with regard to the aforesaid decree and sale being tainted with fraud. They might be so, but the right of the plaintiffs to challenge th" same by way of a direct attack and ask for their rescission was lost on account of lapse of time and got barred by Article 95 of the Limitation Act.
10. In this connection, I may mention that upon the findings of the courts below, the plaintiffs had knowledge of the aforesaid decree and sale, in the year 1952. The very fact that they did not challenge this transaction until the year 1959, is against them, and their conduct is one which would show that they had elected to rest content with things as they obtained. It appears that they took no steps whatsoever to challenge the aforesaid decree and sale right up to the year 1959, even though they had knowledge thereof as far back as 1952. In view of their right to challenge the same, by a suit for the aforesaid purpose, haying been lost on account of Article 95 of the Limitation Act, there could be no escape from the conclusion that the suit was barred by time and the lower appellate court has rightly come to this conclusion.
11. Learned counsel has raised another point arising out of the findings of the courts below with regard to the date of knowledge. My attention has been drawn to the fact that they have only found that these appellants had knowledge of the aforesaid decree and sale in December, 1952, and that there is no finding specifically to the effect that they had knowledge of the facts constituting the fraud. It is said that time begins to run under Article 95 of the Limitation Act not from the date of knowledge of the decree or sale, but from the date of knowledge of the fraud. The words used in Article 95 are "when the fraud becomes known". In this connection my attention has been drawn to Article 59 of the Limitation Act of 1963, according to which time begins to run from the period "when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside dr the contract rescinded first becomes known to him". Reference has next been made to Section 17 of the Limitation Act, which says that "the period of limitation shall not begin to run until the plaintiff or applicant has discovered fraud or the mistake or could, with reasonable diligence have discovered it.....". Upon the basis of the difference in the languages of the Articles and the section aforesaid, it has been urged that the law as it stood prior to the new Act of 1963 did not say about the point of time when with reasonable diligence the facts could have been discovered, and, therefore, that consideration does not apply to cases arising earlier than the aforesaid amendment of the Limitation Act. I am unable to accept that the law, as it stood prior to the amendment of the Limitation Act, did not take into consideration the reasonable time which a party ought to be allowed to make inquiries and discover the facts constituting fraud. When the law laid down that a suit would be within time if so from the date the plaintiff had become aware of the fraud, obviously, while considering the question of the date of knowledge, the court did take into account the point as to whether after having known of the existence of the decree against him he had shown diligence in trying to gather the facts which constituted fraud. The difference in language pointed out does not in my view enure to the benefit of the appellants.
12. In the present case, it is obvious that the plaintiffs had become aware of the existence of the decree and sale in the year 1952, and there is nothing on the record to show that they had made any subsequent inquiries in the matter within a reasonable period and learnt of the fraud. On the other hand, the case of the plaintiffs is that they learnt about the decree, the sale and the facts constituting the fraud long thereafter, in the year 1956. In the present case the plaintiffs were aware, according to their case, that notices, either of the suit or of the execution proceedings, had not been served on them. No more facts were necessary for them to find out in order to arrive at the conclusion that the decree and sale were fraudulent. The knowledge of the decree and the sale, in the circumstances of the present case, was sufficient to make the plaintiffs aware of the fraud committed in the earlier suit and the execution proceeding. It is, therefore, pointless to argue that in the circumstances of the present case, there is any difference between the date of knowledge of the decree and sale and the date of knowledge of the facts constituting fraud. There is, thus no force in the contention that the courts below not having said in so many words that the plaintiffs had become aware of the fraud, interference with the judgment of the court below is required.
13. Lastly, Mr. Shri Nath Singh has made an appeal to the conscience of this Court by drawing attention to the fact that on the question of fact, the earlier decree and the sale have been found by the two courts below to be tainted with fraud and has urged that on equitable principles this Court ought to treat the relief for setting aside the decree as non-existent and give a decree for possession to the plaintiffs. I am afraid, it is not open to this Court to do so. Where the right of a party to challenge a transaction has become extinct, either by election on his part or by the law of limitation and a substantial right has thus accrued to the other party, and where there is a bar to the grant of a relief prayed for by a party, it will be stretching the law too far to say that the Court is entitled to do so, in spite of all these legal hurdles, on equitable principles. In the present case, I have shown that Section 44 of the Evidence Act does not enable the plaintiffs to do what they could have done by a suit within time under Article 95 of the Limitation Act. The suit having been framed for the purpose mentioned in Article 95 of the Limitation Act itself, I am unable to hold that Article 95 should be ignored. It would have been a different matter, if the point had been raised in a collateral proceeding or if the attack had been made for a collateral purpose.
14. In the result, I find that there is no substance in this appeal and it is accordingly dismissed with costs.