Madras High Court
J. Sivasubramanian And Another vs N. Govindarajan And Another on 19 January, 1998
Equivalent citations: 1998(1)CTC470, (1998)IMLJ643
ORDER
1. A person who is not a party to the suit, but who is aggrieved by the decree, has come to this Court, under Art. 227 of the Constitution of India, alleging fraud and collusion in obtaining the decree.
2. Second respondent was the owner of the suit property. He executed a power of attorney in favour of first respondent, who filed O.S.No. 7631 of 1997, on the file of XV Assistant Judge, City Civil Court, Madras, on 3.11.1997. On 5.11.1997, the principal (second respondent), who had executed the power of attorney, made an endorsement on the plaint that he has no objection for passing of a decree. The suit was decreed as prayed for. The decree reads thus:
"(1) That it be and is hereby declared that the General power duly executed by the defendant in favour of the plaintiff dated 29.9.97 duly registered at the Office of Sub-Registrar, Purasawakam, as Document No.575/97 is, valid acted upon, irrevocable, etc. (2) That the defendant be and is hereby restrained by permanent injunction from interfering with the peaceful possession and enjoyment of all the piece of land in all measuring 12 acres and 5 cents comprised in various Survey Nos. namely, 331/2, 336/2, 336/1B and 333/2 situated at Village No.56, Kolapakkam, Sriperumbudur Taluk, Chengai M.G.R. District and within the Sub-Registration District of Pammal and within the Registration District of Madras South in any manner either by himself, his workers, agents, representatives, assigns, etc. (3) That the defendant do pay plaintiff a sum of Rs.61 (Rupees Sixty one only) towards the cost of this suit as taxed noted below."
3. If the decree is only against the defendant in the suit, I would not have interfered with the matter. The relevant facts which necessitated the filing of the revision petition must be summarised, and then only it could be understood whether there was fraud in obtaining the decree.
4. As stated earlier, the properties belonged to the second respondent long back in 1983. The then power of attorney-holder, sold the properties by registered sale deeds, in favour of Rajeswari Ammal wife of Shanmugha Naicker, D. Rajendran son of Dhakshnamoorthi. Second respondent had appointed one Munuswamy alias P.M. Swamy as his power of attorney at that time. After the purchasers came into possession, the properties were sold to the petitioners herein, for valuable consideration.
5. Admitting the possession of the petitioners, and seeking recovery from them, a legal notice was issued by second respondent himself on 17.4.1997. One Mr.A. Palani, Advocate, has issued the notice. It is stated therein that the petitioners are illegally occupying the lands mentioned therein, including brick industries and, therefore, he wanted the petitioners to deliver vacant possession of the same to his client. He has said that their value is more than 12 1/2 lakhs of rupees. He also sought for recovery of damage of Rs. 10,00,000. In that notice, second respondent wanted immediate handing over of possession of the properties, failing which, it is said therein that he will initiate legal proceedings against the petitioners, for recovery of the property.
6. A detailed reply was sent on 1.5.1997 explaining as to how the petitioners are interested in the properties, and how they came into possession. It was stated in that reply that the second respondent has no right over the same, and that he has already disposed of the same through his power of attorney, and the same was subsequently ratified by him. After sending a notice and reply, second respondent executed a power of attorney in favour of the first respondent on 29.9.1997. On the basis of that Power of Attorney, first respondent filed the above suit against the second respondent, i.e., agent filed the suit against the principal, on 3.11.1997, for declaration and permanent injunction. The suit was decreed on the basis of the endorsement made by the second respondent on 5.11.1997, by advancing the suit to that date. After getting a decree on 5.11.1997, a notice was issued by the first respondent on 14.11.1997, informing the petitioners about the suit and the decree. In that letter, it is said that since the decree is against his assigns also, it is binding on them, with a further statement that he reserves his right to file a suit for setting aside the fraudulent sale deeds. The petitioner has come to this Court with the grievance that on the basis of the decree, their possession is disturbed even though it is admitted that they are in possession. It is further stated therein that the suit in which the decree was passed is a collusive one, filed by the agent against the principal on the basis of an endorsement and also at a time when the principal had no interest over the properties. It is also contended that an agent cannot file a suit against the principal for declaration and injunction. In fact, the plaintiff and defendant are one and the same in the suit. In the plaint none of the documents in favour of the petitioners have been disclosed, nor were they made parties, even though a notice was issued against them by the second respondent earlier. Police is interfering with their possession and plaintiff's influence is also exerted for dispossessing them. It is under the above circumstances, petitioners have come to this Court under Art. 227 of the Constitution, to declare that the decree obtained by the plaintiff, first respondent herein, is false and the same is liable to be quashed.
7. At the time when the matter came for admission, I ordered notice of motion and also granted interim stay of operation of the decree. After the first respondent entered appearance, arguments of learned counsel appearing on both sides were heard in detail.
8. Learned counsel for first respondent/plaintiff submitted that he has obtained a valid decree against the second respondent and the same is not liable to be impeached by third parties, petitioners herein, and their remedy is only either by filing a separate suit to declare their possession or to file an impleading application in the suit already filed with ah application to set aside the decree. It is further contended that merely getting a concession or consent to pass; a decree, is not fraud, nor can it be construed as collusion. If the second respondent agrees that he has no interest or agrees to pass a decree, a third party cannot challenge the same. At any rate, remedy under Art. 227 of the Constitution of India cannot be invoked.
9. After having heard learned counsel on both sides, I feel that this is a fit case where the Court is bound to invoke Art. 227 of the Constitution of India and grant relief to the petitioners.
10. I would not have thought of interfering with the decree of the lower Court, but for the admission of the respondents themselves that petitioners are in possession, and, therefore, defendant (second respondent) wanted recovery of possession of the properties from them. That is clear from the notice issued by the 2nd respondent on 17.4.1997. After giving details of all the properties which are the subject matter of the suit, in para 6, it is said:
"My client states that without any authority or lawful grant from my client you are illegally occupying the above said lands including the said two brick industries. You are in possession of the above said properties by fraud upon my clients in connivance with the said my power of attorney. Though my client demanded you to hand over possession to him, you have failed and neglected to oblige my client's demands with an ulterior motive to grab the above said properties for which you have no manner of right."
In Paragraph 8, it is further reiterated thus:-
"Therefore, on behalf of my client, I hereby call upon both of you to deliver vacant possession of the above said properties, namely, "Aruljothiram Brick Industries and Sakthiraja Brick Industries" situated in Kollappakkam Village, Sriperumbudur Taluk, Chengai M.G.R. District, comprised in Survey Nos. (1)331/2(2) 336/2, (3) 336/1 B, (4) 333/2 having total extent of 12-07 acres along with the sum of Rs. 5,00,00,000 (Five crores) and Rs. 10,00,000 (Ten lakhs) towards loss and mental agony within one month from the date of receipt of this notice, failing which my client has no option except initiating legal proceedings both under criminal and civil laws holding both of you liable for all costs and expenses incidental thereto."
After having admitted that the petitioners are in possession and also after asking them to hand over possession, second respondent executed the Power of Attorney in favour of the first respondent. A suit is filed on that basis and a decree is obtained. The suit was filed on 3.11.1997. Even before summons were served on the defendant, within 48 hours, second respondent (defendant) enters appearance and makes an endorsement on the plaint that he has no objection for a decree being passed. The Court also, without any application of mind, has passed the decree. No evidence is taken. The trial court also failed to note that the suit itself has been filed by the agent against the principal. An agent is not entitled to file a suit against his principal, preventing the principal from entering into the properties. No interest in land is granted by the agency. By filing the suit through the agent, the person who got advantage is the second respondent who has already admitted that the petitioners are in possession on the basis of documents. Second respondent, though arrayed as defendant in the suit, he is the real plaintiff. He has suppressed the execution of documents by his power of attorney Munuswamy alias P.M.Swamy in the year 1983, and the subsequent purchase by the petitioners. He has also suppressed the issuance of notice dated 17.4.1997. If these facts had been brought to the notice of the trial court, injunction would not have been granted. It would only prove that he was not in possession. If the second respondent was not in possession, naturally his Power of Attorney Agent also, by virtue of the Deed of Power, cannot get any possession.
11. Subsequent to the decree, another notice was issued by the Power of Attorney on 14.11.1997, reserving his right to set aside the documents. After fully knowing that third parties are in possession and their rights will be affected, if a suit is filed putting forward a false claim knowing it to be false and a collusive decree is obtained, it is nothing but a fraud on Court. Even though the decree is passed on concession, the trial Court ought, to have applied its mind before passing the decree. The Court at least must have seen as to who are the parties and what are their rights. The Court must also have seen as to what is the right of the plaintiff when he claims only as a Power of Attorney. In the cause-title he has given only his name, without disclosing that he is a Power of Attorney Agent. But in the body of the plaint, he states that he is the Power of Attorney Agent of second respondent herein (defendant in the suit). The decree is also granted in that way. Once it has taken note of the averments made in the plaint, should not the trial Court at least see whether the relief prayed for in the plaint could be granted? By arraying the principal alone as defendant, and recognising the plaintiff as his power agent, there is only one party to the suit, i.e., defendant plays the role of both plaintiff and defendant. Such a suit is never permitted in law. What prevented the plaintiff from making the petitioners also as parties to the suit is nowhere explained. Learned counsel for first respondent is also not in a position to explain the same. The only inference that could be drawn from the admitted facts is that both the respondents herein, though arrayed as plaintiff and defendant in. the suit, what they wanted was, recovery of possession of the properties from the petitioners. They have colluded together in getting a decree. They have also suppressed all facts before Court to their advantage. In such cases, it is the duty of the Court to see that the suit itself is wiped off from the file.
12. In S.P. Chengalvaraya Naidu (dead) by LRs. v. Jagannath (dead) by LRs. and others, , their Lordships have decided as to what is meant by 'fraud'. In paragraph 6, Their Lordships have held thus:-
"... A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage..."
Their Lordships have further said thus:-
"A litigant who approaches the Court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side, then he would be guilty of playing fraud on the Court as well as on the opposite party."
In the earlier portion of that Judgment, their Lordships have held thus:-
"... We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation."
The effect of such a decree obtained in such cases is also stated in that judgment thus:-
"... The principle of "finality of litigation" cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands.... 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."
In Mahboob Sahab v. Syed Ismail and others, of the judgment, Their Lordships declared thus:-
"... The reason is that fraud is and extrinsic collateral act, which vitiates the most solemn proceedings of courts of justice. If a party obtains a decree from the Court by practicing fraud or collusion, he cannot be allowed to say that the matter is res judicata and cannot be reopened. There can also be no question of res judicata in a case where signs of fraud or collusion are transparently pregnant or apparent from the facts on record."
In paragraph 10, Their Lordships further declared thus:-
"... Section 44 of the Evidence Act envisages that any party to a suit or proceeding may show that any judgment, order or decree, which is relevant under Sections 40, 41 or 42 has been obtained by fraud or collusion. Under Section 40, the existence of the judgment, order or decree which by law prevents any Court from taking cognizance of a suit or holding a trial, is a relevant fact when the question is whether such court ought to take cognizance of such suit or to hold such trial."
In Indian Bank v. Satyam Fibres (India) Pvt. Ltd., it was declared thus:-
"The authorities, be they constitutional, statutory or administrative, (and particularly those who have to decide a lis) possess the power to recall their judgments or orders if they are obtained by fraud as fraud and justice never dwell together (Fraud et jus nunquam cohabitant). Fraud and deceit defend or excuse no man (Fraud et dolus nemini patrocinari debent). The judiciary in India also possesses inherent power, specially under Section 151, CPC., to recall its judgment or order if it is obtained by fraud on court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected parly to file a separate suit for setting aside the decree obtained by fraud. Inherent powers are powers which are resident in all Courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the constitution of the tribunals or courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rule, protect its officers from indignity and wrong and to punish unseemly behaviour. This power is necessary for the orderly administration of the Court's business. Since fraud affects the solemnity, regularity and orderliness of the proceedings of the court and also amounts to an abuse of the process of court, the courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court. Similarly, where the court is misled by a party or the court itself commits a mistake which prejudices a party, the court has the inherent power to recall its order."
13. I feel that all these decisions will show that a duty is cast on the litigant to plead, pray and get relief by placing all materials before Court. By suppressing facts and without impleading the necessary parties, a collusive decree is obtained. In the case on hand, the collusion is apparent. A person who has no right in the property concedes the right of the plaintiff to get a decree, and that too within 49 hours of filing of the suit. The result of this is getting unfair advantage over the rights of the petitioners and to deprive them of their properties. Both the respondents were aware that the petitioners are in possession on the basis of documents. They themselves (i,e. parties to the suit) admit the possession of the petitioners. But, without disclosing any of these documents, the power of attorney (agent) filed the suit against the principal and gets a decree, by consent. I have already stated as to what is the legal effect, i.e., the second respondent (defendant) himself is the plaintiff and defendant. It will be unjust to accept the contention of the respondents. Such a collusive decree also cannot be allowed to stand. After coming to know of these facts, if any Court shuts its eyes to realities, it will cease to be a Court of Justice. By invoking the judicial supervisory jurisdiction, I declare that the decree in O.S.No.7631 of 1997, on the file of XV Assistant Judge, City Civil Court at Madras is a nullity and on the basis of the said decree, possession of the petitioners shall not be disturbed. I further find that since the suit is filed fraudulently, the same is liable to be quashed, and I do so. O.S.No.7631 of 1997 is struck off from the file of the lower Court. The Civil Revision Petition is allowed with costs. Advocate's fee Rs. 2,500 (Rupees Two thousand five hundred). CMP. No. 17556 of 1997 for stay is closed.