Karnataka High Court
Smt.Mubina W/O Mohasin Nagaraji vs Shri Sanjay S/O Tukaram Jasud on 22 November, 2024
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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NC: 2024:KHC-D:18607-DB
RFA No. 100336 of 2019
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 22ND DAY OF NOVEMBER, 2024
PRESENT
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
AND
THE HON'BLE MR. JUSTICE G BASAVARAJA
REGULAR FIRST APPEAL NO. 100336 OF 2019 (SP)
BETWEEN:
1. SMT.MUBINA
W/O MOHASIN NAGARAJI
AGE: 27 YEARS,
OCC: HOUSEHOLD WORK,
R/O: JIJAMATA CHOWK, NIPANI,
TQ: NIPANI,
DIST: BELAGAVI.
2. SHRI. SADDAM
S/O HAJI SALIM NAGARAJI
Digitally signed AGE: 28 YEARS,
by SHWETHA OCC: BUSINESS,
RAGHAVENDRA
R/O: JIJAMATA CHOWK, NIPANI,
Location: HIGH
COURT OF TQ: NIPANI,
KARNATAKA DIST: BELAGAVI.
BOTH ARE REPRESENED BY THEIR GPA HOLDER
SHRI HAJI SALIM
S/O SAYYAD NAGARAJI
AGE: 54 YEARS
OCC: BUSINESS,
R/O JIJAMATA CHOWK, NIPANI,
TAL: NIPANI,
DIST: BELGAUM-591237.
...APPELLANTS
(BY SRI. SHIVRAJ S. BALLOLI, ADVOCATE)
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NC: 2024:KHC-D:18607-DB
RFA No. 100336 of 2019
AND
1. SHRI. SANJAY
S/O TUKARAM JASUD
AGE: 46 YEARS,
OCC: TRANSPORT AND BUSINESS,
R/O: SHRI DATTA MOTORS,
CHIKKODI ROAD, NIPANI,
TQ: NIPANI,
DIST: BELAGAVI-591237.
2. SOMANATH
S/O SHRIKANT PARAMANE
AGED ABOUT 46 YEARS,
OCC: ENGINEER AND CONTRACTOR
R/O ASHOK NAGAR, NIPPANI,
TQ: NIPPANI, DIST: BELAGAVI
...RESPONDENTS
(BY SRI. GIRISH A. YADAWAD, ADVOCATE FOR R1;
SRI. GURUDEV I. GACHCHINAMATH., ADVOCATE FOR R2)
THIS RFA IS FILED UNDER ORDER 41 R(1) R/W SECTION 96
OF CPC PRAYING TO MODIFY THE JUDGMENT AND DECREE DATED
29.03.2019 PASSED BY THE SENIOR CIVIL JUDGE AND JMFC, NIPANI
IN O.S.NO.33/2018 BY ALLOWING THE APPEAL AND GRANTING THE
RELIEF OF SPECIFIC PERFORMANCE TO MEET THE ENDS OF JUSTICE
AND EQUITY.
THIS RFA HAVING BEEN HEARD ON IA Nos.2 AND 3 OF 2023
AND IA No.2 OF 2024 AND RESERVED FOR ORDERS ON 19.09.2024,
COMING ON FOR 'PRONOUNCEMENT OF ORDERS, THIS DAY, SURAJ
GOVINDARAJ J., PASSED THE FOLLOWING:
CORAM: THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
AND
THE HON'BLE MR. JUSTICE G BASAVARAJA
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NC: 2024:KHC-D:18607-DB
RFA No. 100336 of 2019
CAV JUDGMENT
(PER: THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ) ORDERS ON IA NOS.2 AND 3 OF 2023 AND IA NO.2 OF 2024
1. The above First Appeal has been compromised and the compromise has been recorded disposing the above matter vide judgment dated 07.12.2022.
2. The background of the litigation is as under;
2.1. The appellants claimed that they had entered into an agreement of sale dated 17.08.2016 in respect of property bearing R.S.No.72A/2 measuring 11 guntas 9 annas 9 paise situated at old P.B. Road, Nippani with the Respondent No.1.
2.2. Respondent No.1 not having complied with his obligations, by executing a sale deed in favour of the Appellants, the Appellants had filed a suit in O.S.No.33/2018 for specific performance before the Senior Civil Judge and JMFC, Nippani which came to be partly allowed inasmuch as -4- NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 the relief sought for specific performance was rejected but the Trial Court directed the Respondent No.1 to make payment of the earnest amount of Rs.10,00,000/- along with interest at the rate of 6% per annum. 2.3. It is aggrieved by the said judgment that the appellants had approached this Court vide the aforesaid First Appeal in RFA No.100336/2019. 2.4. It was also claimed that Respondent No.1 had executed another agreement of sale in favour of appellants No.2 and his brother in respect of one other property bearing R.S.No.72A/1/3B measuring 5 guntas situated at Chikodi-Nippani Road, Nippani agreeing to sell the same for a consideration of Rs.20,00,000/- as regards which an earnest deposit of Rs.19,00,000/- was paid to the Respondent No.1 at the time of execution of the agreement of sale i.e., on 03.05.2017.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 2.5. The Respondent No.1 not having come forward to execute a sale deed, appellants No.2 and his brother had filed O.S.No.34/2018 which suit also came to be partly decreed with a direction to the Respondent No.1 to return the earnest money of Rs.19,00,000/- vide judgment and Decree dated 01.03.2019. Needless to state, that relief for specific performance had been rejected. That judgment and Decree had been challenged in RFA No.100332/2019. 2.6. Both the said first appeals had been clubbed together and were taken up for consideration, on several dates when arguments were advanced, the parties had indicated that they were exploring the possibility of settlement and it is in furtherance thereof, that a compromise petition came to be filed on 07.12.2022 which came to be recorded by this Court in its judgment dated 07.12.2022.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 2.7. In terms of the said compromise, it was agreed between the parties that the property scheduled to RFA No.100336/2019 would be sold by Respondent No.1 to the Appellants by execution of a sale deed for a total consideration of Rs.1,29,36,000/-. The consideration paid under the agreement subject matter of RFA No.100332/2019 was to be adjusted for such consideration, the appellants No.2 and his brother gave up their rights under the agreement subject matter of RFA No.100332/2019.
2.8. Respondent No.1 agreed to execute a sale deed with respect to the property subject matter of RFA No.100336/2019 by receiving the balance sum of Rs.94,36,000/-. It is recording the said compromise after due enquiry with the appellants and Respondent No.1 that the compromise decree was passed on 07.12.2022. -7-
NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 2.9. Thereafter, IA No.1 of 2023 came to be filed by one Mr. Somnath s/o Shrikant Paramane, claiming that there was an earlier agreement of sale in his favour executed on 30.4.2015 under which Respondent No.1 has agreed to sell the property covered under R.S.No.72A/2 measuring 11 guntas 9 annas 9 paise to him for a consideration of Rs.40,00,000/- as regards which an amount of Rs.30,25,000/- had been paid. The said application came to be allowed and he was brought on record as respondent No.2.
2.10. Respondent No.1 not having come forward to execute the necessary sale deed, Respondent No.2 had filed a suit in O.S.No.30/2019 before the Senior Civil Judge & JMFC, Nippani which came to be decreed on 23.11.2021, directing the Respondent No.1 to execute a necessary sale deed in favour of Respondent No.2. -8-
NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 2.11. It is claimed that Respondent No.2 and the Respondent No.1 had approached the sub- registrar office on 11.01.2022 for compliance with the Decree passed. However, on 17.01.2022, the Sub-registrar issued an endorsement stating that there was an interim order operating in RFA No.100336/2019 as regards the said property, and hence the sale deed could not be registered. Respondent No.2 claims that Respondent No.1 assured Respondent No.2 that he would get the interim order vacated and the sale deed would be executed in favour of Respondent No.2. 2.12. Instead of doing so Respondent No.1 had filed an application under Section 151 of the Code of Civil Procedure read with Section 28 of the Specific Relief Act to rescind the agreement of sale dated 30.04.2015 in O.S.No.30/2019, which came to be rejected by the Senior Civil Judge & JMFC, Nippani on 6.9.2022, challenging -9- NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 which the Respondent No.1 had preferred writ petition in WP No.104072/2022.
2.13. The submission of Respondent No.2 was that without adverting to the above facts, the Appellants and Respondent No.1 had compromised the matter to the detriment of Respondent No.2. The compromise being related to the very same property subject matter of the Decree in O.S.No.30/2019, the Decree having been passed on 23.11.2021, the question of a subsequent compromise being entered into on 07.12.2022 in the present First Appeal after the Decree had been passed in O.S.No.30/2019 would not arise.
2.14. Respondent No.2 has also filed IA No.2 of 2023, seeking for cancellation of sale deed dated 31.01.2023, executed in respect of RS No.72A/2, in pursuance of the compromise decree dated 07.12.2022 in the above matter, as also IA No.3 of 2023, seeking for recalling
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 and setting aside the compromise decree dated 07.12.2022. The submissions made in the impleading application were reiterated in the said applications.
3. Objections were filed by the Appellants and Respondent No.1 contending that, 3.1. The impleading application as also IA No.2 of 2023 and IA No.3 of 2023, filed by Respondent No.2 were completely misconstrued and not maintainable, that Respondent No.2 has an alternative remedy to challenge the compromise decree by filing a separate suit and applications in the present first appeals were not maintainable.
3.2. It was further alleged that the Decree passed in OS No.30/2019 had become unenforceable because of Respondent No.2 not having paid the amounts within the prescribed time of two months under the aforesaid Decree in O.S.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 No.30/2019 and as such Respondent No.2 had lost his right to enforce the Decree. 3.3. The Appellants further alleged that challenging the order passed under Section 28 of the Specific Relief Act, Respondent No.1 had filed a writ petition in WP No.104072/2022 which is pending consideration and therefore, appellants contended that both the application in IA No.2 of 2023 and IA No.3 of 2023 are required to be dismissed.
4. Respondent No.1 also filed common objections to the application in IA No.1 of 2023, IA No.2 of 2023 and IA No.3 of 2023, 4.1. Respondent No.1 virtually restating what has been stated by the appellants verbatim and taking up the very same contentions that the Decree passed in O.S. No.30/2019 was unenforceable on the basis of the conduct of Respondent No.2.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 4.2. Respondent No.2 not having made payment of the due amounts within a period of two months had forfeited his right to enforce the Decree. 4.3. Though a reference was made to the order passed under Section 28 of the Specific Relief Act, what can be seen is conspicuously both the appellants and the Respondent No.1 did not advert to the averments made by Respondent No.2 as regards Respondent No.1 and Respondent No.2 having approached the sub- registrar's office and the endorsement issued by the sub-registrar's office.
5. Respondent No.2 filed a further application under Order 41 Rule 27 of the Code of Civil Procedure in IA No.2 of 2024, producing certain documents. 5.1. By relying on the said documents, it was contended that on 03.04.2021, the power of attorney holder of the appellants had taken out a paper publication through his advocate Mr. M.M. Kulkarni indicating their desire to
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 purchase the aforesaid property from Respondent No.1 as regards which Respondent No.2 through his advocate submitted a reply on 25.03.2021 to the General Power of Attorney holder (for short hereinafter referred to as "GPA holder") of the appellants. However, the GPA holder refused to receive the said notice and to evidence the same, the returned cover has been produced.
5.2. It is further contended that Respondent No.2 addressed a reply notice to the advocate, Mr. M.M. Kulkarni, who had issued a public notice, which reply was received by him.
5.3. It is further alleged that the said Mr. M.M. Kulkarni is a common advocate of the GPA holder of the appellants as also that of Respondent No.1. The said advocate being fully knowledgeable about the reply dated 25.03.2021, more so when the said advocate is the advocate of the GPA holder of the
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 appellants, the objections of Respondent No.2 have been placed on record and it being clearly indicated that there was a decree already passed in favour of Respondent No.1. 5.4. The appellants and Respondent No.1 have entered into a compromise in the present First Appeals which categorically indicates the malafide's on their behalf. It is on the basis of the above pleadings on record that the matter was taken up for arguments.
6. Sri. Girish A. Yadawad, learned counsel appearing for Respondent No.1, reiterated the objections filed by Respondent No.1 and contended that; 6.1. The Decree passed in OS No.30/2019 was an ex-parte decree and not binding on Respondent No.1. Respondent No.1 was not aware of the said Decree and that Respondent No.1 had entered into a compromise with the appellants in a bonafide manner in the present First
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 Appeals and no fault can be found with Respondent No.1 in relation thereto.
7. Sri. Shivraj S. Balloli., learned counsel for the Appellants also reiterated the very same submission made by Sri. Girish A. Yadawad and further contends that 7.1. the appellants being bonafide purchasers for value having paid the entire sale consideration, the sale deed having been executed in favour of the appellants, neither the compromise nor the sale deed can be set aside.
7.2. His submission is that Respondent No.2 would be required to file separate proceedings challenging the compromise decree and the sale deed executed and in this regard, he relies upon the decision of the Hon'ble Apex Court in Ram Ji Gupta Vs. Gopi Krishan Agrawal1 more particularly para nos. 13 and 19 thereof, 1 (2013) 11 SCC 296 | 2013 INSC 242
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 which are reproduced hereunder for easy reference:
13. Section 151 CPC is not a substantive provision that confers the right to get any relief of any kind. It is a mere procedural provision which enables a party to have the proceedings of a pending suit conducted in a manner that is consistent with justice and equity. The court can do justice between the parties before it. Similarly, inherent powers cannot be used to re-open settled matters. The inherent powers of the Court must, to that extent, be regarded as abrogated by the legislature. A provision barring the exercise of inherent power need not be express, it may even be implied. Inherent power cannot be used to restrain the execution of a decree at the instance of one who was not a party to suit. Such power is absolutely essential for securing the ends of justice, and to overcome the failure of justice. The Court under Section 151 CPC may adopt any procedure to do justice, unless the same is expressly prohibited.
19. In view of the above, the law on this issue stands crystallised to the effect that the inherent powers enshrined under Section 151 CPC can be exercised only where no remedy has been provided for in any other provision of CPC. In the event that a party has obtained a decree or order by playing a fraud upon the court, or where an order has been passed by a mistake of the court, the court may be justified in rectifying such mistake, either by recalling the said order, or by passing any other appropriate order. However, inherent powers cannot be used in conflict of any other existing provision, or in case a remedy has been provided for by any other provision of CPC.
Moreover, in the event that a fraud has been played upon a party, the same may not be a case where inherent powers can be exercised.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 7.3. Relying upon the Judgment in Ram Ji Gupta's case, he submits that there are no inherent powers vested in this Court to set aside a compromise which has been recorded. The remedy would be to file separate proceedings. 7.4. He also places reliance on the decision of the Hon'ble Apex Court in My Palace Mutually Aided Co-operative Society vs B. Mahesh & Others,2 more particularly para no. 35 thereof, which is reproduced hereunder for easy reference:
35. Therefore, we are of the firm opinion that recalling a final decree in such circumstances cannot be countenanced under Section 151 of the CPC. The High Court erred in exercising its jurisdiction under Section 151 of the CPC, to hear and pass a detailed judgment recalling its earlier final Decree dated 19.09.2013, rather than directing the Respondent No.1s to pursue the effective alternate remedies under law. Having said the above, we must clarify that we are not, in any way, doubting the proposition of law that fraud nullifies all proceedings, or that the Court has power to recall an order which was passed due to a fraud played on the Court. However, while exercising the power under Section 151 CPC for setting aside the final judgment and Decree, the Division Bench should have taken into consideration the restriction which was observed by 2 2022 SCC Online SC 1063 | 2022 INSC 854
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 this Court in the captioned judgment. Once we have come to the irresistible conclusion that exercising power under Section 151 CPC in the facts and circumstances of the case is bad, we are not inclined to go into further issues that were extensively argued.
7.5. Relying on the Judgment in My Palace Mutually Aided Co-operative Society's case, he submits that a final decree cannot be recalled under section 151 of CPC, any challenge to a decree would have to be done in terms of the applicable law and as such, in the present case, compromise decree having been drawn up, the same cannot be set aside under section 151 of CPC.
7.6. Relying on both the above-mentioned judgments, he submits that this Court would not have the power to recall the compromise decree and/or set aside the sale deed executed, and it is for Respondent No.2 to approach the Court of Competent Jurisdiction.
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8. Sri. Gurudev I. Gachchinamath, learned counsel for Respondent No.2, while reiterating the submissions made in the applications, would further contend that; 8.1. The dates are relevant inasmuch as the agreement executed in favour of Respondent No.2 was on 30.04.2015, prior to the agreement executed in favour of the Appellants on 17.08.2016.
8.2. By 08.01.2016 i.e., much before the agreement of sale in favour of the Appellants, Respondent No.2 had made payment of Rs.30,25,000/- out of a total consideration of Rs.40,00,000/-. 8.3. The suit which was filed by Respondent No.2 in O.S. No.30/2019 was for specific performance, which was decreed, whereas the suit, subject matter of the above appeal, filed by the Appellants had been partly allowed, dismissing the relief of specific performance and directing the refund of an amount of Rs.10,00,000/- along with interest at a rate of 6% per annum.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 8.4. Thus, he submits that it is the suit of Respondent No.2 which came to be decreed insofar as specific performance is concerned and the suit of the Appellants came to be dismissed insofar as the relief of specific performance is concerned.
8.5. The Decree in favour of Respondent No.2 having been passed on 23.01.2021, Respondent No.1 and Respondent No.2 had approached the office of the Jurisdictional Sub- Registrar on 11.01.2022 within a period of two months of the Decree in OS No.30/2019 and at that time, Respondent No.2 was ready to make payment of the balance sum, which cheque details have been mentioned in the sale deed presented for registration as Cheque Bearing No.000216, dated 13.01.2022, drawn on ICICI Bank Limited, Nippani for a sum of Rs.9,75,000/-.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 8.6. Thus, he submits that the contentions taken up by the Appellants and Respondent No.1 that the Respondent No.2 was not ready to make payment of the balance sum within two months of the Decree having been passed in OS No.30/2019 is a completely false statement and made knowing fully well of the falsity thereof.
8.7. Respondent No.2 being personally present for registration of the sale deed on 11.01.2022, the Sub-Registrar had rejected the registration on account of the interim order passed in RFA No.100336/2019, which the Respondent No.1 had undertaken to get vacated and thereafter proceed to execute and register the necessary sale deed.
8.8. His further submission is that, subsequent to the said rejection by the Sub-Registrar, Respondent No.1 had filed an application under Section 28 of the Specific Relief Act in OS
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 No.30/2019, seeking to rescind the agreement of sale date 30.05.2015, which came to be dismissed by the Senior Civil Judge & JMFC, Nippani on 06.09.2022, though the Respondent No.1 has challenged the same in W.P. No.104072/2022, the fact remains that even after filing an application under Section 28 of the Specific Relief Act, Respondent No.1 has entered into the said compromise and placed it for consideration before this Court, suppressing the Decree in OS No.30/2019, the order dated 06.09.2022 passed by the Senior Civil Judge & JMFC, Nippani, as also the fact of Respondent No.1 and Respondent No.2 having approached the Sub-Registrar on 11.01.2022 and the endorsement dated 17.01.2022 issued by the Sub-Registrar.
8.9. His submission is also that a public notice has been taken by Sri. M.M. Kulkarni, Advocate for and on behalf of Power of Attorney Holder of
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 the Appellants, who is also a counsel for Respondent No.1. There is collusion between the Appellants and Respondent No.1 in suppressing all these facts and as such he submits that a collusive compromise petition filed before this Court to defraud the rights of Respondent No.2 cannot be allowed to continue and an act of this Court cannot lead to injustice being caused to Respondent No.2 in enjoying the fruits of the Decree passed in OS No.30/2019.
8.10. On these grounds, he submits that both IA No.2 of 2023 and IA No.3 of 2023 are required to be allowed by considering the documents produced along with IA 2 of 2024, the compromise decree recalled and the sale executed in pursuance of the compromise decree be set aside.
9. Heard Sri. Shivraj S. Balloli, learned counsel for the petitioner, Sri. Girish A. Yadawad, learned counsel
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 for Respondent No.1 and Sri. Gurudev I Gachchinamath, learned counsel for the proposed Respondent No.2. Perused papers.
10. During the course of arguments, this Court taking note of the several facts which have been adverted to, provided sufficient opportunities to the parties to resolve the dispute by themselves. However, all the counsels have submitted that the matter could not be resolved. Respondent No.2, being agreeable for such amicable resolution, the counsel for the Appellants and Respondent No.1 have indicated that no such amicable resolution could occur. It is in that background that the applications were taken up for final disposal.
11. From the narration of the facts above, we are of the considered opinion that the present case is a classic case of fraud played on the Court by litigants, namely the appellants and Respondent No.1.
12. The sequence of events, as indicated by Sri. Gurudev I. Gachchinamath leaves no doubt in our mind of the
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 fraud played by Respondent No.1, as also the collusion of the Appellants with Respondent No.1, in placing a compromise petition before this Court by suppressing all material facts. If at all, the material facts had been brought to the notice of this Court, this Court would never have accepted the compromise petition. This fraud being the cause for acceptance of the comp[romise petition, it being trite law that fraud vitiates everything, the order of thie court accepting the compromise and all actions taken pursuant thereto stands vitiated on account fo the fraud of the Appellants and Respondent No.1.
13. Admittedly, the suit in OS No.30/2019 had been decreed on 23.11.2021. Respondent No.1 and Respondent No.2 had approached the Sub-Registrar on 11.01.2022 with a sale deed for registration. The registration was refused on 17.01.2022 by the Sub- Registrar on the ground that there was an interim order in RFA No.100336/2019.
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14. Subsequent thereto, Respondent No.1 had filed an application under Section 151 of the Code of Civil Procedure, read with Section 28 of the Specific Relief Act, to rescind the agreement of sale dated 03.04.2015, which came to be rejected by the Senior Civil Judge & JMFC, Nippani on 06.09.2022.
15. In the meanwhile, the appellants had taken out a paper publication on 02.04.2021 as regards the property subject matter of the above proceedings, through their advocate Sri. M.M.Kulkarni, indicating that the appellants have intended to purchase the property from the Respondent No.1. Objections were filed by Respondent No.2 to the said notice dated 02.04.2021 on 07.04.2021. The said objections have been addressed to the power of attorney of the Appellants as also to the Respondent No.1, clearly indicating the claim of Respondent No.2. The said reply notices were refused to be received by the addressees and sent back to Respondent No.2.
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16. In that view of the matter, Respondent No.2 had addressed his objections to the counsel for the power of attorney holder of the appellants who is also a counsel for the Respondent No.1 as clearly and categorically evidenced by the Vakalathnama filed by the said advocate on their behalf.
17. Thus, way back in the year 2021, the appellants, through their power of attorney, as also through their advocate, was aware of the objections and claims of Respondent No.2, despite which the matter was proceeded with, and a compromise petition filed in the present first appeal.
18. Shockingly, the objections filed by both the appellants and Respondent No.1 are virtually verbatim, taking the very same contentions, the Appellants if they had been aggrieved, would have sought for action to be taken against Respondent No.1 for having defrauded them. However, the appellants have given a clean chit to Respondent No.1 and have even certified the conduct of
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 Respondent No.1. It is however claimed that it is Respondent No.2 who has not acted in a proper manner and has therefore forfeited his right for specific performance on account of the payment not having been made within a period of two months from the date of the Decree in O.S. No.30/2019.
19. These contentions are falsified by the very sale deed which had been presented for registration before the sub-registrar which indicated the details of the cheque under which the balance consideration was offered to be paid by Respondent No.2 to Respondent No.1 and the statement of account produced by Respondent No.2 indicating that Respondent No.2 had enough and sufficient balance in his bank account to cover the cheque mentioned in the sale deed presented for registration on 11.01.2022.
20. Further fraud has been played by Respondent No.1 by approaching the Court which has decreed O.S. No.30/2019 seeking for rescission of the
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 agreement of sale by filing the application under Section 28 of the Specific Relief Act, which application having been rejected a writ petition in W.P. No.104072/2022 has been filed, which facts were also suppressed from this Court when the compromise petition was submitted.
21. Looked at from any angle, Respondent No.1 firstly and the appellants secondly in collusion with Respondent No.1 have abused the process of this Court, placed a fraudulent compromise petition before this Court by suppressing all material particulars which have been deliberated and expounded hereinabove, which would indicate the collusion between the appellants and Respondent No.1.
22. It is trite law that fraud vitiates everything. The fraud committed by the appellants and Respondent No.1 deserves to be dealt with strictly so that they are taken to task for the violations committed by them
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 and that it acts as a deterrent to a litigant in commiting such fraud by abusing the court's process.
23. The fraud in the present matter is not only as regards Respondent No.2 but also on this Court having recorded the compromise, believing the statements made by the Applellants and Respondent No.1.
24. The Hon'ble Apex Court in Ram Ji Gupta's case has categorically held that the powers under Section 151 of CPC can be exercised when no remedy has been provided for under any other provision of CPC and further that in the event of the party having obtained a decree or order by playing fraud on the Court or where an order has been passed by mistake of the Court, the Court may be justified in rectifying such mistake either by recalling the said order or by passing any other appropriate order.
25. In the present case, as afore observed, the compromise petition was filed which came to be accepted and a decree directed to be drawn up on
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 the basis of the fraud committed by the appellants and respondent No.1. Fraud having been played on the Court and there being an abuse of process of Court, this Court, in our considered opinion, would be dutybound to rectify any mistake which has occurred on account of such fraud, the appellants and respondent No.1 not being entitled to fruits of any fraud committed by them.
26. In the above circumstances, the decisions which have been relied upon by Sri.Shivraj S.Ballolli in Ram Ji Gupta's case would not enure to his benefit in as much as in that decision what was subject matter was an order passed under Rule 13 of Order 9 read with Section 151 of the Code of Civil Procedure filed by a person claiming that he was not made a party to the suit though he had a share in the property by holding that an application under Rule 13 of Order 9 could be filed only by a person party to the litigation and not by a third-party.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019
27. In the present case, we are not concerned with an application under Rule 13 of Order 9, but an application filed before this Court to set aside a compromise decree obtained by fraud.
28. The decision in My Palace Mutually Aided Co-operative Society's Case would also not be applicable. In that case, the application for recall of the compromise was filed 7 years after the final Decree was passed and a challenge was made as regards a withdrawal of the suit in C.S.No.7/1958 and a preliminary-cum-final decree was passed on 06.04.1959 and subsequently on 16.09.2000 on the basis of an assignment deed, a conveyance deed came to be executed on 03.08.2023 and on that basis an application was filed in Application No.837 of 2013 to pass a final decree.
29. In the present case, we are concerned with a compromise which has been entered into on 07.12.2022 and the applications having been filed on 13.03.2023 placing the facts which had been
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 suppressed by the appellants and Respondent No.1. The judgment in My Palace Mutually Aided Co-operative Society's Case was not one which dealt with fraud or collusion but was dealing with setting aside a final decree simplicitor.
30. In the present case, we are concerned with fraud which has been played by the appellants and Respondent No.1 on this Court to usurp the property which was decreed in favour of Respondent No.2. In that view of the matter, we are of the considered opinion that both the above decisions would not be applicable to the present facts.
31. In view of the various facts which have been adverted to hereinabove and which have been considered by us, we are of the considered opinion that both the appellants and Respondent No.1 have abused the process of the Court, played fraud on this Court and had been successful in getting a compromise recorded by suppressing material facts as well as suggesting false facts. Inasmuch as, if all
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 the facts adverted to above had been placed before us, the compromise petition would never have been taken on record and a compromise decree never be directed to be drawn up.
32. The subject matter of RFA No.100336/2019 being R.S.No.72A/2 measuring 11 guntas 9 paise situated at old P.B.Road, Nippani, the subject matter of RFA No.100332/2019 being R.S.No.72A/1/3B measuring 5 guntas situated at Chikodi-Nippani Road, Nippani, the subject matter of decree O.S. No.30/2019 being R.S. No.72A/2 measuring 11 guntas 9 annas 9 paise, it is clearly seen that the subject matter of RFA No.100336/2019 is covered by a decree in O.S. No.30/2019. There is a decree of specific performance that was passed with respect to the very same subject property in O.S. No.30/2019, which remained unchallenged and attained finality.
33. The challenge in RFA No.100336/2019 having been made as regards denial of relief of specific performance, the said relief would not survive for consideration in view of a decree having already been passed in O.S. No.30/2019
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 and as such, the said RFA No. 100336/2019 would not be amenable for consideration and would be liable to be dismissed.
34. RFA No.100332/2019 being as regards different property than that covered under RFA No.10036/2019 and the decree in O.S. No.30/2019 would have to be considered separately dehors the brother of the appellants having given up his right under the compromise decree passed in both the said Regular First Appeals which is now being set-aside.
35. In that view of the matter, we pass the following order.
ORDER i. IA No.2/2024 is allowed, the documents produced along with the said application are taken on record. ii. IA No.3/2023 is allowed, the compromise decree dated 07.12.2022 in RFA No.100336/2019 and RFA No.100332/2019 is recalled.
iii. IA No.2 of 2023 is allowed, the Sale Deed dated 31.01.2023 having been executed in pursuance of the compromise decree dated 07.12.2022, the said sale deed dated 31.01.2023 registered as document No.NPN-1-03400-2022-23 and stored in CD No.NPND1152 in Book 1 dated 31.01.2023 in the office of the Sub-Registrar, Nippani is cancelled, the Sub-registrar, Nippani is directed to make necessary entries in the concerned registers.
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NC: 2024:KHC-D:18607-DB RFA No. 100336 of 2019 iv. RFA No.100336/2019 stands dismissed. v. RFA No.100332/2019 is restored to file. vi. The Additional Registrar General is directed to initiate proceedings against the Appellants and Respondent No.1 under Sections 177, 181, 193, 196, 199, 200, and 209 of the IPC along with Sections 195 read with 340 of the CrPC, since the offences have been committed prior to Bharatiya Nyaya Sanhita and Bharatiya Nagarik Suraksha Sanhita coming into force, within a period of 30 days from the date of the receipt of this order, of course investigation would have to be carried out in terms of the Bharatiya Nagarik Suraksha Sanhita. vii. Liberty is also reserved to the applicant to initiate such proceedings as may be advised both civil and criminal.
SD/-
(SURAJ GOVINDARAJ) JUDGE SD/-
(G BASAVARAJA) JUDGE SR/LN List No.: 19 Sl No.: 1