Madhya Pradesh High Court
Dharmendra Singh Sengar vs Mohan Vishwakarma on 4 December, 2024
Author: Gurpal Singh Ahluwalia
Bench: G.S. Ahluwalia
NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 1
F.A. No.295/2010
IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G.S. AHLUWALIA
ON THE 4th DECEMBER 2024
F.A. No. 295 OF 2010
DHARMENDRA SINGH SENGAR & ANOTHER
VS.
MOHAN VISHWAKARMA (DEAD) THR. HIS L.R.s AND OTHERS
Appearance : Shri N.K. Gupta, Senior Counsel with Shri S.D.S. Bhadauria,
Counsel for Appellants.
None for respondents no. 1 and 2, though served
Shri D.K. Budholiya, Counsel for respondent no. 3
JUDGMENT
This First Appeal, under Section 96 of CPC, has been filed against the Judgment and Decree dated 22-9-2010 passed by 3rd Additional District Judge, Vidisha in Civil Suit No. 18-A/2010.
2. Facts necessary for disposal of present appeal, in short, are that the appellant filed a civil suit for declaration of Sale deed as null and void and also for permanent injunction. It was pleaded that the appellant is the owner of plot admeasuring 40x40 sq. ft situated in Ward No. 34, Puranpura, Vidisha. The appellant agreed to sell his plot in view of personal requirements and accordingly decided to sell his plot to respondent for a consideration of Rs. 1,00,000/-. A registered sale deed dated 18-2-2008 was executed in favour of respondent and accordingly, the respondent gave a Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 2 F.A. No.295/2010 cheque No. 895632 dated 15-2-2008 for Rs. 1,00,000/-. The cheque was given in the presence of the Sub-Registrar. However, the respondent continuously gave an assurance that he would deposit the requisite amount in his bank but did not do so. Ultimately, he gave another cheque of Rs. 1,00,000/- in the month of Feb. 2009. The appellant presented the cheque however, the State Bank of Indore informed that the cheque has been dishonoured on account of insufficient funds. Accordingly, the appellant sent a registered notice, but the same was not received by the respondent. Thus, it was prayed that since, the sale deed was without consideration amount, and the same was got executed by playing fraud on the appellant, therefore, the appellant is entitled to get the sale deed declared as null and void and is also entitled to get back the possession.
3. The respondent did not appear before the Trial Court and accordingly he was proceeded exparte.
4. The Trial Court after recording evidence and hearing the appellant, dismissed the suit on the ground that a sale deed cannot be declared as null and void only on the ground that it was executed without consideration amount.
5. Challenging the judgment and decree passed by the Court below, it is submitted by Counsel for the Appellant, that it is not a case of execution of sale deed without consideration. In fact the cheque of Rs. 1,00,000/- was given in lieu of consideration amount, and since, the cheque stood dishonoured, therefore, the sale deed was got executed by respondent by playing fraud on the appellant. It is further submitted that the appellant has filed I.A. No. 3826 of 2012 for amendment in the plaint, thereby claiming alternative prayer for refund of Rs. 1,00,000/-. The said application was allowed by co-ordinate bench of this Court by order dated 8-12-2023.
Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 3 F.A. No.295/20106. After an application for amendment in the plaint is allowed, then ordinary course of action should have been to remand the matter to the Trial Court, but as the Appellant has sought alternative relief, therefore, whether the matter is liable to be remanded back or not shall be decided after the merits of the case are considered.
7. The L.R.s of respondent/defendant have not appeared even after service of notice.
8. Counsel for respondent no. 3 has submitted that he has purchased the property in question from the L.R.s of original defendant.
9. Heard the learned Counsel for the parties.
10. The Trial Court has dismissed the suit on the ground that sale deed cannot be declared as null and void merely on the ground that it was executed without consideration amount.
11. The Trial Court has failed to appreciate the facts of the case in its proper perspective. It is the case of the appellant, that in lieu of consideration amount, the cheque was given which subsequently stood dishonoured as a result the consideration amount remained unpaid. If the aforesaid aspect is considered then it is clear that the intention of the respondent was dishonest right from the very inception and his intention was to play fraud on the appellant as well as not to pay the price of the land. The Supreme Court in the case of Meghmala v. G. Narasimha Reddy, reported in (2010) 8 SCC 383 has held as under :
28. It is settled proposition of law that where an applicant gets an order/office by making misrepresentation or playing fraud upon the competent authority, such order cannot be sustained in the eye of the law. "Fraud avoids all judicial acts, ecclesiastical or temporal."
(Vide S.P. Chengalvaraya Naidu v. Jagannath.) In Lazarus Estates Ltd. v. Beasley the Court observed without equivocation that : (QB Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 4 F.A. No.295/2010 p. 712) "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."
29. In A.P. State Financial Corpn. v. GAR Re-Rolling Mills and State of Maharashtra v. Prabhu this Court observed that a writ court, while exercising its equitable jurisdiction, should not act as to prevent perpetration of a legal fraud as the courts are obliged to do justice by promotion of good faith. "Equity is always known to defend the law from crafty evasions and new subtleties invented to evade law."
30. In Shrisht Dhawan v. Shaw Bros. it has been held as under :
(SCC p. 553, para 20) "20. Fraud and collusion vitiate even the most solemn proceedings in any civilised system of jurisprudence. It is a concept descriptive of human conduct."
31. In United India Insurance Co. Ltd. v. Rajendra Singh this Court observed that "Fraud and justice never dwell together" (fraus et jus nunquam cohabitant) and it is a pristine maxim which has never lost its temper over all these centuries.
32. The ratio laid down by this Court in various cases is that dishonesty should not be permitted to bear the fruit and benefit to the persons who played fraud or made misrepresentation and in such circumstances the Court should not perpetuate the fraud. (See Vizianagaram Social Welfare Residential School Society v. M. Tripura Sundari Devi, Union of India v. M. Bhaskaran, Kendriya Vidyalaya Sangathan v. Girdharilal Yadav, State of Maharashtra v. Ravi Prakash Babulalsing Parmar, Himadri Chemicals Industries Ltd. v. Coal Tar Refining Co. and Mohd. Ibrahim v. State of Bihar.)
33. Fraud is an intrinsic, collateral act, and fraud of an egregious nature would vitiate the most solemn proceedings of courts of justice. Fraud is an act of deliberate deception with a design to secure something, which is otherwise not due. The expression "fraud" involves two elements, deceit and injury to the person deceived. It is a cheating intended to get an advantage. [Vide Vimla (Dr.) v. Delhi Admn., Indian Bank v. Satyam Fibres (India) (P) Ltd., State of A.P. v. T. Suryachandra Rao, K.D. Sharma v. SAIL and Central Bank of India v. Madhulika Guruprasad Dahir.]
34. 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 Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 5 F.A. No.295/2010 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. 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. Suppression of a material document would also amount to a fraud on the court. (Vide S.P. Chengalvaraya Naidu, Gowrishankar v. Joshi Amba Shankar Family Trust, Ram Chandra Singh v. Savitri Devi, Roshan Deen v. Preeti Lal, Ram Preeti Yadav v. U.P. Board of High School & Intermediate Education and Ashok Leyland Ltd. v. State of T.N.)
35. In Kinch v. Walcott it has been held that:
"... mere constructive fraud is not, at all events after long delay, sufficient but such a judgment will not be set aside upon mere proof that the judgment was obtained by perjury".
Thus, detection/discovery of constructive fraud at a much belated stage may not be sufficient to set aside the judgment procured by perjury.
36. From the above, it is evident that even in judicial proceedings, once a fraud is proved, all advantages gained by playing fraud can be taken away. In such an eventuality the questions of non- executing of the statutory remedies or statutory bars like doctrine of res judicata are not attracted. Suppression of any material fact/document amounts to a fraud on the court. Every court has an inherent power to recall its own order obtained by fraud as the order so obtained is non est.
12. Section 25 of Contract Act reads as under :
25. Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law.--An agreement made without consideration is void, unless--
(1) it is expressed in writing and registered under the law for the time being in force for registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 6 F.A. No.295/2010 (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
In any of these cases, such an agreement is a contract. Explanation 1.--Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made. Explanation 2.--An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent to the promisor was freely given.
Illustrations
(a) A promises, for no consideration, to give to B Rs. 1,000. This is a void agreement.
(b) A, for natural love and affection, promises to give his son, B, Rs. 1,000. A puts his promise to B into writing and registers it. This is a contract.
(c) A finds B's purse and gives it to him. B promises to give A Rs.
50. This is a contract.
(d) A supports B's infant son. B promises to pay A's expenses in so doing. This is a contract.
(e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract.
(f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A's consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration.
(g) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the Court should take into account in considering whether or not A's consent was freely given.
Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 7 F.A. No.295/201013. Thus, an agreement without consideration is void unless and until it is expressed in writing and registered under the law for the time being in force for registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other. If the facts of the case are considered then it is clear that in the sale deed Ex. P.1 it was specifically mentioned that the entire consideration amount has been paid by cheque and nothing is outstanding. Thereafter, it is the case of the Appellant, that the cheque was given by way of consideration amount, stood dishonoured. Therefore, it is clear that sale deed was not executed out of love and affection but it was executed by giving a cheque of consideration amount, but thereafter, the cheque stood dishonoured. Therefore, it is a case of fraud.
14. The Trial Court has relied upon Judgment passed by Supreme Court in the case of Vidhyadhar Vs. Manikrao reported in AIR 1999 SC 1441. The Supreme Court in the case of Vidhyadhar (Supra) has held as under :
35. Even if the findings recorded by the High Court that the plaintiff had paid only Rs 500 to Defendant 2 as sale consideration and the remaining amount of Rs 4500 which was shown to have been paid before the execution of the deed was, in fact, not paid, the sale deed would not, for that reason, become invalid on account of the provisions contained in Section 54 of the Transfer of Property Act, 1882 which provide as under:
"54. 'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 8 F.A. No.295/2010
A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
36. The definition indicates that in order to constitute a sale, there must be a transfer of ownership from one person to another, i.e., transfer of all rights and interests in the properties which are possessed by that person are transferred by him to another person. The transferor cannot retain any part of his interest or right in that property or else it would not be a sale. The definition further says that the transfer of ownership has to be for a "price paid or promised or part-paid and part-promised". Price thus constitutes an essential ingredient of the transaction of sale. The words "price paid or promised or part-paid and part-promised" indicate that actual payment of the whole of the price at the time of the execution of sale deed is not a sine qua non to the completion of the sale. Even if the whole of the price is not paid but the document is executed and thereafter registered, if the property is of the value of more than Rs 100, the sale would be complete.
37. There is a catena of decisions of various High Courts in which it has been held that even if the whole of the price is not paid, the transaction of sale will take effect and the title would pass under that transaction. To cite only a few, in Gayatri Prasad v. Board of Revenue it was held that non-payment of a portion of the sale price would not affect validity of sale. It was observed that part-payment of consideration by the vendee itself proved the intention to pay the remaining amount of the sale price. To the same effect is the decision of the Madhya Pradesh High Court in Sukaloo v. Punau.
38. The real test is the intention of the parties. In order to constitute a "sale", the parties must intend to transfer the ownership of the property and they must also intend that the price would be paid either in praesenti or in future. The intention is to be gathered from the recital in the sale deed, the conduct of the parties and the evidence on record.
15. Thus, if the facts and circumstances of the case are considered, then it is clear that the intention of the defendant/respondent was not to pay the price either in praesenti or in future. The cheque was given by way of consideration amount, which never got encashed.
Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 9 F.A. No.295/201016. Similarly, the Trial Court has relied upon the judgment passed by this Court in the case of Prem Narayan Vs. Kunwarji reported in AIR 1993 MP 162, however, the facts of the said case are completely different. If the facts of the present case are considered, it is clear that payment of consideration amount was made a condition precedent, therefore, there is a specific mention in the sale deed, Ex. P.1 regarding payment of consideration amount through cheque and the cheque never got encashed.
17. Thus, in the considered opinion of this Court, the Trial Court committed a material illegality by dismissing the suit on the ground that non- payment of consideration amount cannot be a ground to declare a sale deed as null and void.
18. Thus, it is held that since, the respondent/defendant namely Mohan Vishwakarma played a fraud on the appellant and never intended to pay the price of the land, therefore, the sale deed executed on 18-2-2008, Ex. P.1 is a null and void document.
19. Since, the possession was delivered to the respondent/Mohan Vishwakarma in the light of Sale deed dated 18-2-2008, Ex. P.1, and since, the said sale deed has been declared as null and void, therefore, it is held that the appellant is entitled for possession of the said land.
20. It is submitted by Counsel for the respondent no.2 that now he has purchased the property from the L.R.s of defendant Mohan Vishwakarma. Since, the sale deed was executed during the pendency of civil litigation, therefore, provisions of Section 52 of Transfer Of Property Act would apply with full force, accordingly it is held that the respondent no.3 after having stepped into the shoes of the respondent no.1 and 2, cannot maintain his possession over the land in dispute. The respondent no.3 is bound by the decree which is being passed against the respondents no. 1 and 2. Since, he Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 10 F.A. No.295/2010 has purchased the property from the respondent no.1 and 2, therefore, he shall be free to recover the damages from respondents no. 1 and 2.
21. Ex Consequenti, the Judgment and Decree dated 22-9-2010 passed by 3rd Additional District Judge, Vidisha in Civil Suit No. 18-A/2010 is hereby set aside.
22. The appeal is allowed and suit filed by Appellant is hereby decreed. The Sale deed dated 18-2-2008, Ex. P.1 is hereby declared as null and void and it is directed that respondents no. 1 to 3 shall handover the vacant possession of the property to appellant failing which the appellant shall be entitled to recover possession by getting the decree executed.
23. No order as to costs.
24. A decree be drawn accordingly.
(G.S.Ahluwalia) Judge Signature Not Verified Signed by: ANAND SHRIVASTAVA Signing time: 12/6/2024 5:39:00 PM