Delhi High Court
Uri Civil Contractor Ab vs Pampa Mukherjee on 1 November, 1994
Equivalent citations: 1994IVAD(DELHI)1113, 56(1994)DLT608, 1995(32)DRJ195
JUDGMENT Mohd. Shamim, J.
(1) Uri Civil Contractor Ab, defendant / Petitioner ( hereinafter referred to as the petitioner, for the sake of convenience) through the present revision petition have taken exception to an order dated July 14,1992 passed by Shri Tej Singh kashyap. Sub Judge, Delhi, where through he came to the conclusion that an application under Section 151 of the Code of Civil Procedure was maintainable to set aside the judgment and decree passed under Order Xxiii Rule 3 of the Code of Civil Procedure on the ground of fraud and fixed a date for framing of issues in order to examine the factum of fraud and stayed the operation of the said judgment and decree and directed the parties to maintain the status quo in regard to the custody of the five vehicles.
(2) The matrix of the case of the petitioner is: that the plaintiff/ respondent (hereinafter referred to as the respondent for the sake of brevity) : brought forward a suit, being Suit No. 7 of 1992, for perpetual injunction against the petitioner. She prayed through the said suit that the petitioner be restrained from removing 23 vehicles from the workshop of the respondent till they made the payment for the work done by her in connection with the fabrication of the bodies of the said vehicles and till the realisation of the parking charges. The respondent Along with the said suit also moved an application under Order Xxxix Rules 1 & 2 for ad interim injunction. Vide order dated December 31,1991 the learned Additional District Judge directed the petitioner to maintain the status quo with regard to the vehicles in their possession till the next date.
(3) While the proceedings were going on before the learned lower court, the parties settled the matter amicably on the terms and conditions enumerated in the compromise deed ( Ex.CI) dated March 25,199-2. The court below whereupon decided the suit in terms of the said compromise through his judgment and order dated March 25,1992. Parties were left to bear their own costs.
(4) Subsequently the respondent herein moved an application under Section 151 Civil Procedure Code . dated May 1,1992 for setting aside the said judgment and decree dated March 25,1992 whereby the suit was decided in terms of the compromise Ex. Cl on the ground that the said judgment and decree were the result of a fraud practiced on her . She would have never come to terms with the petitioner but for the said fraud practiced on her. According to the respondent the petitioner made additions and alterations in the compromise deed Ex.CI. She never agreed and gave her consent to the terms and conditions mentioned in para 3(b) of ExC1 wherein there is an interpolation and addition of 5 lines. The date was changed from 15.5.92 to 30th of April 92. Furthermore, the petitioner as per the agreement alluded to above were under an obligation to place an order for the fabrication of the bodies of seven more vehicles but they did not do so till April 30,1992. In the above circumstances it was prayed that the said judgment and decree be 'set aside and the case be re-opened and proceeded with.
(5) The petitioner opposed the said application tooth and nail inter alia on the following grounds: that the application in question is not maintainable. It is false and preposterous that any fraud was ever committed. The respondent entered into the said compromise with her open eyes. The terms of the same were settled after a lot of discussion and deliberations in between the parties in the presence of their counsel. The respondent now wants to wriggle out of the same in order to bring pressure on the petitioner to extort money from them. The parties were completely ad idem at the time of settlement. She thus cannot be allowed to go back on the same. The court below has become functus officio after delivering the judgment. The matter thus cannot be reopened for a trial de novo. The application is thus liable to be dismissed.
(6) After hearing the learned counsel for the parties, the learned lower court was of the view that the application adverted to above was maintainable. However, the question with regard to the fraud could not be decided in the absence of the evidence of the parties on the said point. With the said end in view he fixed a date for framing of issues vide the impugned order dated July 14,1992.
(7) Aggrieved and dis-satisfied with the said order the petitioner have approached this Court by way of the present revision petition.
(8) Learned counsel for the petitioner Mr. V. P. Singh, Senior Advocate, has vehemently contended that the learned lower court fell' into a grave error by coming to the conclusion that the present application under Section 151 Civil Procedure Code , was maintainable. There was absolutely not even an iota of evidence on record even prima facie to show and prove that the respondent was defrauded. The impugned compromise was the result of great deliberation and discussion in between the parties and their respective counsel. Thus, how the fraud could have been practiced. The learned lower court should have held as such.
(9) Mr. Chaudhary, learned counsel for the respondent, on the other hand, has urged that the present revision petition is not maintainable inasmuch as it falls outside the domain of Section 115 Civil Procedure Code . According to the learned counsel the court below has neither failed to exercise the jurisdiction which was vested in him nor has assumed the jurisdiction which was not vested in him. Furthermore by passing the impugned order the learned Sub Judge has also not committed any illegality or material irregularity which requires interference by this Court under Section 115 C.P.C. By the impugned order the learned lower court has not finally disposed of the application under Section 151 Civil Procedure Code . No irreparable injury has been caused to the petitioner through the impugned order. Hence, the present petition is not maintainable and is liable to be dismissed on this ground alone.
(10) Since we are concerned with the construction of Section 115 Civil Procedure Code the provisions of the said Section can be adverted to with profit. Section 115 C.P.C. is in the following words :- "(1)The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears- (a) to have exercised a jurisdiction not vested in it by law, or (b) to have failed to exercise a jurisdiction so vested, or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit: Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where - (a) the order, if it had been made in favor of the party applying for revision, would have finally disposed of the suit or other proceeding, or (b) the order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made. (2) the High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate thereto. Explanation : In this section, the expression "any case which has been decided" includes any order made, or any order deciding an issue, in the course of a suit or other proceeding."
(11) Learned counsel for the respondent, Mr. Chaudhary, on the basis of the relevant provisions of law dealing with the powers of revision under Section 115 Civil Procedure Code . reproduced above, has vehemently argued that the learned lower court through the impugned order has not finally disposed of the application under Section 151 Civil Procedure Code . He has so far simply found that the said application is maintainable and has thus fixed a date for framing of issues as the court below was of the view that the question of fraud cannot be ascertained till the parties are allowed to lead evidence in support of their respective contentions. The learned counsel in support of his argument has placed reliance on the observations of a Single Judge as reported in Modi Spinning & Weaving Mills Co. and another v. M/s Ladha Ram & Co, ...."Every interlocutory order passed by the tria(l court during the progress of the suit cannot be held to be a case decided within the meaning of 115 of the Civil Procedure Code . The case can be said to be decided only if for the purpose of the suit some right or obligation of the parties have been decided by the said order."
(12) The contention of the learned counsel. I feel is not so simple as he is trying to make out it to be. Admittedly, the judgment and decree were passed on the basis of the compromise deed Ex.C1 in between the parties. The learned lower court vide the impugned order has suspended the operation of the said judgment and decree passed by him vide his order dated March 25,1992. Thus, the suit was disposed of vide judgment and decree dated March 25,1992 and the rights of the parties were finally adjudicated upon by the said judgment and decree. The court below as already observed above has stayed the operation of the said judgment and decree in terms of the compromise Ex.CI. It has thus led to the deprivation of the rights and benefits which accrued to them there- under. Thus, it would be a fallacy to contend that no irreparable injury has been caused to the petitioner and there was no failure of justice through the order in question. I thus feel that the present revision petition is maintainable as the instant case would be squarely covered by the relevant provisons of Section 115 Civil Procedure Code .
(13) The above view was also given vent to by a Division Bench of the Calcutta High Court as reported in Food Corporation of India v. Birendera Nath Dhar, ...... "AN order may occasion a failure of justice to a party without causing any irreparable injury to him. In that case, he can move this Court under S. 115 if the other conditions of that section are satisfied. So also where by an order an irreparable injury would be caused to a party such party may also move this Court against that order. In our view, there is no reason why the word "or" should be read as "and", as contended on behalf of the opposite party. As stated already, if the impugned order is allowed to stand it would cause an irreparable injury to the. petitioner and, as such, it satisfied the provision of Cl.(b) of the proviso, the order is therefore revisable under S. 115. The preliminary objection taken on behalf of the opposite party petitioner is accordingly overruled."
(14) Learned counsel for the petitioner, Mr.V.P.Singh, has argued with all the vehemence on his command that the application under Section 151 C.P.C. was not maintainable inasmuch as as per the averments made in the said application the instant case is not a case of fraud alleged to have been committed 'on the Court'. The application under Section 151 Civil Procedure Code . for setting aside a compromise decree is maintainable only in those discerning few cases where there is a case of fraud alleged to have been committed on the Court. The learned counsel in support of his argument has led this Court through the observations of a Division Bench of the Patna High Court as reported in Sadho Saran Rai and others v. Anant Rai and others, (AIR 1923 Patna 483). It was opined "THE Court has inherent powers to correct its own proceedings when it is satisfied that in passing a particular order it was misled by one of the parties. A distinction has been drawn in the case of Indian Courts between a fraud practiced upon a party and a fraud practiced upon the Court. It has been laid down that where the question is whether there was consent in fact, there is power in the Court to investigate the matter in a properly constituted application and to set aside the decree if it is satisfied that a party never in fact consented to it but that the Court was induced to pass the decree on the fraudulent representation made to it that the party had consented to it, but that where there is a consent in fact, that is to say, where the parties have filed a compromise petition and they admit that they have filed but if the parties allege that his consent was procured by fraud, the Court cannot investigate the matter either in review or in the exercise of its inherent power, and that the only remedy of the party is to institute a suit to set aside the decree on the ground of fraud. In other words, the factum of the consent can be investigated in summary proceedings but the reality of the consent cannot be so investigated."
(15) Counsel for the respondent Mr. Chaudhary, on the other hand, has contended that even where there is a case of fraud practiced by one party on the other i.e. a fraud inter se the parties, even then it would be deemed and considered as a fraud practiced upon the Court and the Court is competent enough to go into that and in case it comes to the conclusion that in fact, it was a case of fraud and the compromise decree was obtained by practicing fraud in that eventuality the Court can set it aside on an application moved under Section 151 Civil Procedure Code .
(16) The learned counsel in support of his argument has placed reliance on the observations of a Single Judge of the Patna High Court as reported in Mairnun Nisa and another v. Mohammad Khodabin and others, , where the learned Judge expressed his view in the following words:- "WHERE the compromise petition filed by the parties to the suit is accepted by the Court and a decree in terms of the compromise is passed and subsequently an application is made by a party for setting aside the decree on the ground that his consent to the terms of the compromise was obtained by fraud, the Court can entertain the application under S. 151 and if it is found that the party had not consented to the terms of the compromise and his consent was obtained by fraud, then the compromise cannot be said to be a lawful compromise and it has to be held that the Court was induced to record the compromise on false representation which shall amount to practicing fraud on the Court and not merely a fraud upon the party. In that case the Court has inherent power under S. 151 to set aside the compromise decree."
(17) The learned counsel on the basis of the above authority has argued that if the learned lower court prima facie was of the view that it was a case of fraud then he was fully justified and competent to hold that the said application to set aside the decree of compromise on the basis of fraud under Section 151 was fully maintainable.
(18) I am sorry I am unable to agree with the above contention of the learned counsel. To my mind, there is a distinction between fraud 'practiced by one party on the other party' and the fraud 'practiced on the Court'. In the former case i.e. case of fraud between the parties inter se, the party cannot approach the Court under Section 151 Civil Procedure Code . for setting aside the compromise decree on the basis of fraud. The only course open to the said party would be to file a suit for declaration for getting the said decree declared as null and void. However, on the other hand, in case of fraud practiced on the Court the Court would be fully competent to investigate the said fraud and to set aside the said decree on an application under Section 151 Civil Procedure Code , moved by a party if it comes to the conclusion that it was a case of fraud practiced on the Court. I am supported in my above view by the observations of their Lordships of the Supreme Court as reported in Dadu Dayal Mahasabha v. Sukhdev Arya and another, . In the above said case the order of withdrawal of a suit by a registered society was obtained from the trial court by an unauthorised person by misleading the court that he was the elected Secretary of the society. Hence, the application by the duly elected Secretary was held to be maintainable. I am tempted here to cite in extenso from paragraph 7 of the said authority wherein their Lordships made a clear distinction in the fraud practiced 'inter se the parties' in order to obtain a decree and the fraud, on the other hand, practiced on the court to procure the decree. It reads as under:- "LET us consider the cases in which consent decrees are challenged. If a party makes an application before the court for setting aside the decree on the ground that he did not give his consent, the court has the power and duty to investigate the matter and to set aside the decree if it is satisfied that the consent as a fact was lacking and the court was induced to pass the decree on a fraudulent representation made to it that the party had actually consented to it. However, if the case of the party challenging the decree is that he was in fact a party to the compromise petition filed in the case but his consent has been procured by fraud, the court cannot, investigate the matter in the exercise of its inherent poswer, and the only remedy to the party is to institute a suit. It was succinctly summed up in the aforementioned case (Sadho Saran Rai v. Anant Rai supra) that the factum of the consent can be investigated in summary proceedings, but the reality of the consent cannot be so investigated...... In Basangowda Hanmantgowda Patil v. Churchigirigowda Yogangowda, ( 2nd 54 Bom. 408), the defendant applied to the court to set aside a compromise decree on the ground that he had not engaged the lawyer claiming to be representing him and had not authorised him to compromise the suit. The court accepted his plea and ruled that it is the inherent power of every court to correct its own proceedings when it has been misled....."
(19) It is manifest from above that the Hon'ble Supreme Court has cited with approval the observations made in Sadho Saran Rai v. Anant Rai (supra). Thus, thereby they. have put their seal of approval on the said authority and as such, in view of the above, the reliance placed by the learned counsel for the respondent on the observations of a Single Judge of the Patna High Court as reported in Mairnun Nisa and another v. Mohammad Khodabin and others (supra) would be misplaced inasmuch as the same cannot be considered to be a good law.
(20) One of the first and foremost duty of the Court is to see that there is an end to the litigation. A great sanctity is attached as such to a compromise because it puts an end to litigation once and for all. A compromise decree is a decree which is to the satisfaction of both the parties. No party is aggrieved and as such, there is no question of further litigation. It is unlike an order of the Court which is always in favor of one party and against the other party and as such, it is appealed against by the party whosoever feels aggrieved. It was perhaps with the said end in view that the legislators in their wisdom enacted Order Xxiii Rule 3A of the Code of Civil Procedure which reads as under:- "NO suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful."
(21) Hence the Court would be very much reluctant to entertain an application for setting aside a judgment and decree passed on the basis of a compromise arrived at in between the parties otherwise the provisions of Order Xxiii Rule 3 Civil Procedure Code . would be rendered nugatory. As such an application under Section 151 Civil Procedure Code . is to be entertained only in those clear cut cases where there is a prima facie case of fraud practiced on the Court.
(22) This brings me to the point of fraud as to whether a fraud was in fact committed on the respondent by the petitioner while entering into the compromise Ex.C1. Before embarking upon any discussion on this point, I would like to observe that the lamed counsel for the respondent Mr. Chaudhary has not argued any thing on this point. However, since the very basis of the application under Section 151 Civil Procedure Code . moved by the respondent before the learned lower court is fraud, I would like to deal with the same in order to put an end to this controversy. As per the averments made in the application under section 151 Civil Procedure Code . moved by the respondent before the learned lower court, the petitioner are alleged to have inserted last five lines in para 3(b) of the compromise application. They are further alleged to have changed the date of the delivery of the vehicle to 30th April from 15th May, 1992. A close scrutiny of the draft compromise deed reveals that the above said alleged additions and alternations were made in the draft terms of the compromise. To my mind, there is nothing wrong if certain additions and alterations were made in the draft proposals. I feel everyone is authorised to do so since it is 'simply a draft which is as yet to be approved by the parties. This is not the case of the respondent that any additions or interpolations were made in the compromise deed Ex.C1 which subsequently formed the basis of the compromise and the basis of the impugned judgment and decree in terms of the said compromise.
(23) The next grievance of the respondent raised through the application under Section 151 is that the petitioner were under an obligation to place an order for the fabrication of the bodies of seven vehicles as per the terms of the compromise, but they failed to do so. The above grievance of the respondent is without any justification, whatsoever, inasmuch as she herself has admitted in the impugned application itself that an order to that effect i.e. for the fabrication of the bodies of seven vehicles was in fact placed on April 30,1992. Thus, I feel the complaint on the said score is only figment of her imagination.
(24) Furthermore, assuming arguendo, that no order was placed as per the terms of the compromise Ex.CI, in that eventuality, it will be simply a breach of the compromise and would give to the respondent a separate cause of action, it cannot be termed as a fraud practiced on the respondent while entering into the compromise. The fraud to constitute a cause of action for moving an application under Section 151 Civil Procedure Code . must be anterior to the compromise and not posterior thereto. In case there is non compliance with the terms of the compromise subsequently, in that eventuality it cannot be called a fraud.
(25) There is another aspect of the matter. A perusal of the record reveals that the compromise Ex.CI bears the signatures of the respondent i.e. Mrs. Pampa Mukherjee and that of her counsel and that of Mrs. Arshi Singh for and on behalf of the petitioner. It is also supported by the affidavits of both the parties. Furthermore, the learned lower court recorded the statement of the respondent Mrs. Pampa Mukherjee and that of her counsel Mr. Sharma. Similarly, the learned Sub Judge also recorded the statement of Mrs. Arshi Singh Makhija, Manager (Legal) for and on behalf of the petitioner and that of their counsel Shri Panikkar. In the above circumstances, it is too late in the day for the respondent to allege that she was defrauded by the petitioner. She entered into the compromise with her eyes open. She was not alone while entering into the said compromise but was assisted at the relevant time by her counsel Mr. Sharma.
(26) There is another side of the picture. It is manifest from above that the compromise Ex.C1 was entered into on March 25,1992. The respondent herein thereafter wrote several letters to the petitioner. First letter addressed to the petitioner by her counsel Shri T.C.Sharma is dated April 2,1992. Thus, if the contention of the respondent is taken to be correct that she was induced to enter into a compromise by the petitioner through fraud and misrepresentation in that eventuality she must have said so in her letter dated April 2,1992 which was addressed to the petitioner. Surprisingly enough the respondent for the best reasons known to her kept quiet and did not even raise tiny finger of protest in the said letter. Curiously enough she did not make any grievance on the said score even in her subsequent letter addressed to the petitioner through her counsel Shri T. C. Sharma. Thus, it can be safely concluded there from that the instant case is not a case of fraud and it appears to be an afterthought with ulterior motive.
(27) There is yet another side of the picture. Admittedly, the compromise deed Ex.CI, as already observed above, bears not only the signatures of the parties but of their counsel also. Thus, there is a presumption that the respondent must have gone through the compromise deed and each and every term of the same must have been known to her. In any case, she has got the sufficient time and opportunity at her disposal to have known the fraud, if any, alleged to have been perpetrated on her. Thus, the instant case cannot be a case of fraud or misrepresentation. When there was sufficient opportunity on the part of the respondent to have known it, yet she kept her eyes shut and did not try to find out with regard to the alleged fraud then she cannot by any stretch of imagination be said to have been defrauded. The above view was given vent to by a Single Judge of the Rajasthan High Court as reported in Kamal Kant Paliwal v. Smt. Prakash Devi Paliwal and others, ..." In order to constitute fraud, the person making the statement must have been aware of the falsity of the statement and the party defrauded remains ignorant of the correct situation. The effect of fraud on an agreement so far as consent to it is procured by it may be a complete misunderstanding on the part of the person deceived as to the nature of the transaction undertaken, or the person of the other party. But if the other party has the facts before it or has the means to know the facts, the party cannot be said to have been defrauded even if a false statement has been made.
(28) The plaintiff seeking the cancellation of the trust deed was an educated man. The validity of the deed was challenged on the ground that he was asked to sign it on making him to believe it as general power of attorney. The deed was attested by plaintiff's father and his advocate. The plaintiff had all the means to know the contents of the documents. Held, no fraud was practiced."
(29) It has then been urged for and on behalf of the petitioner that the present suit i.e. Suit No. 7/92,was filed for a perpetual injunction restraining the petitioner from removing the 23 vehicles from the workshop of the plaintiff i.e. the respondent herein without making payment for the work done by the respondent in connection with the fabrication of the bodies of the said vehicles. According to the learned counsel, all the said vehicles have now been released. Thus the present suit for injunction has become infructuous. Thus, it would be an exercise in futility to re-open the said case because nothing survives for adjudication in the said case. I agree.
(30) A perusal of the record reveals that out of the said 23 vehicles, 11 vehicles were released vide order dated January 22,1992 passed by the learned Sub Judge. Subsequently, 7 vehicles were released vide order dated February 12,1992 passed by the learned lower court. The remaining 5 vehicles were released during the pendency of the present revision petition vide order dated September 23,1992 passed by Hon ble Mr. Justice C. L. Chaudhary, learned predecessor of this Court. Thus, no vehicle is in possession of the respondent/plaintiff. Hence, no restraint order is required. Consequently, the suit has become infructuous. Hence, the application under Section 151 Civil Procedure Code .moved in Suit No. 7/92 for the revival of the said suit and for setting aside the impugned judgment and decree dated March 25,1992 is nothing but an exercise in futility. This Court feels that even the said application has become infructuous.
(31) In the circumstances stated above, the petitioner are entitled to succeed. The present revision petition is allowed with costs. The order dated July 14,1992 passed by the learned Sub Judge is hereby set aside. Consequently, the application under Section 151 of the Code of Civil Procedure is dismissed.