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TMI Blog1952 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... mortgage bond it was stated that the annual rent including cesses was ₹ 19/12/3 (Ext. A.). 3. While the mortgagee was in possession, the landlords brought two suits for arrears of rent in respect of the mortgaged land and put up the holding to sale in execution of the decree, but the entire decretal amounts were deposited by the mortgagee (vide chalans Exts. B to B2) and the sales were averted. 4. According to the defendants, the landlords instituted the two rent suits, claiming rent at an enhanced jama of ₹ 23/7/3 and the mortgagee (Harihar) deposited the landlords' dues under the two decrees in order to protect his own interest. It is alleged that the plaintiff was asked to reimburse the defendants; and on her refusal to do so, the sons of Harihar (two of whom are defendants 1 and 2) instituted a money suit against the plaintiff and her son in 1941 for recovery of the excess amount and an 'ex parte' money decree (Ext. E) was obtained, and as the decree was not satisfied the mortgaged land was sold in execution of the money decree and auction-purchased by the sons of Harihar themselves. The plaintiff however, brought the suit for redemption, pure and sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellants, is that the money decree or the court sale not having been set aside within three years of the date of the plaintiff's knowledge of the fraud under Article 95 Limitation Act, the plea of nullity is not available to the plaintiff & the court of appeal below had no jurisdiction to decide the question of fraud and record its finding thereon. He has accordingly urged that the finding of fraud must be ignored and the suit for redemption dismissed. Mr. Das has raised interesting questions of law but, on authorities, his contentions must, in my opinion, fail. 8. The allegation of the plaintiff in paragraph 9 of her plaint is that on 15-1-1946, the defendants "expressed" to have purchased the land in dispute at an auction sale in connection with some money decree, and in paragraph 10 of her plaint she puts her case thus: "No kind of decree was, by any means, passed against the plaintiff, nor has the plaintiff got knowledge of any decree, nor was any summons or notice etc. or writ of attachment or sale proclamation or writ of delivery of possession served. If the defendants have taken any kind of proceeding after winning over the maliks and the peon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is set aside. There is, in my view, no force in this contention. Order 21, Rule 92 Clause (1), provides: "where no application is made under Rule 89, Rule 90 or Rule 91, or where such application is made and disallowed, the Court shall make an order confirming the sale, and thereupon the sale shall become absolute." And Clause (3) provides: "No suit to set aside an order made under this rule shall be brought by any person against whom such order is made." It is thus clear that the sale must stand if the case be governed by any of the rules mentioned in Order 21, Rule 92, Clause (1). 9. The case before us cannot fall either under Rule 89 or Rule 91. The bar of the Rule can be attract- ed only if the case falls under Rule 90. In my view, the provisions of Rule 90 also cannot apply because the sale is not challenged on the ground of material irregularity or fraud in publishing or conducting the sale. It is sought to be attacked on the ground of fraud in snatching a decree from the court and proceeding with the execution of it with which the sub-rule has no concern. According to both the courts below, there was no basis for the claim, firstly because the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands, it stops the plaintiff from denying the correctness of the judgment or of the execution. The facts of that case were shortly these : The plaintiff was indebted to the defendants in the sum of #28. The defendants commenced an action against the plaintiff in the Queen's Bench for the recovery of the debt by a writ specially endorsed and personally served. The plaintiff, before appearance and before Judgment, paid to the defendants, and the defendants accepted, the sum of #10 on account of the debt, but the defendants, after such payment, signed judgment for default of appearance for the full amount of the debt of # 28, and costs and sought to realise the full amount under the decree by the arrest of the plaintiff. The plaintiff was arrested and was compelled, in order to procure his discharge, to pay the full amount endorsed and the Sherrif's fees. The plaintiff averred that the defendants wrongfully and maliciously & without reasonable or probable cause realised the amount in excess of the amount for which he was liable. He accordingly sued for damages in respect of the # 10, the extra fees and costs and the detention. Kelly, C. B. observed that "while the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Court of Chancery has no right to review a decree of the Court of Exchequer; that nothing but a Court of Appeal can give redress if such decree is erroneous, is clear, and indeed nothing can be more true than such a proposition, but it is equally true, that if the decree has been obtained by fraud it shall avail nothing for or against the parties affected by it, to the prosecution of a claim, or to the defence of a right. These two propositions are undeniably true; they are recognised in practice, they are independent of each other, and they stand well together. That was the rule stated as deduced from all the authorities in a case which, having been decided in the Court of Arches, was subsequently the subject of discussion in another court. The question was, whether the judgment of the Court of Arches was conclusive and binding on all other Courts, not Courts where that judgment was before them on appeal. Mr. Solicitor General Wedderburn, in his excellent argument in that case, thus summed up the effect of all the authorities : 'A sentence is a judicial determination' of a cause agitated between real parties, upon which a real interest has been settled; in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic nature. Sections 41 and 42, therefore, have no application to the present case. But the application of Section 40 is attracted because the decree (Ext. E) on which the whole execution proceeding is founded and which was pleaded in bar as 'res judicata' under issue No. 3 is vitiated by the fraud of the mortgagee. The decree is, therefore, a nullity for the purpose of a collateral attack, and anything flowing from such a decree, must also be treated as nullity. The plaintiff can, therefore, ignore the sale and the effect of the decree on, the ground of fraud. The language of Section 44 is wide enough to allow a party to show the true nature of a decree or order which is pleaded in bar, notwithstanding the fact that the decree or order has not been avoided. As the court of appeal below, in agreement with the trial court, has found that the decree and sale were fraudulent, they can be ignored and treated as a nullity, for Lord Walsingham in the -- 'Duchess of Kingston's case (1776) 1 Leach 14S observed: "Fraud is an extrinsic, collateral act, which vitiates the most solemn proceedings of Courts of Justice. Lord Coke says, it avoids all judicial acts, eccles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party, it is not necessary for the party against whom such judgment, order or decree is set up to bring a separate suit to have the same set aside. It may be stated, that Sir John Stanley, as the Chief Justice of the Allahabad High Court, reiterated the view taken by him in 23 Cal 891 . The same view was taken by Sulaiman C. J. in -- 'Mt. Parbati v. Gajraj Singh' MANU/UP/0013/1936 : AIR 1937 All 28 (M)'. Dawson Miller, C. J. in -- 'Hare Krishna v. Umesh Chandra' MANU/BH/0198/1921 : AIR 1921 Pat 193 : 193, 197 (PB) (N), in repelling the argument based on 'res judicata', observed : "It is nevertheless open to the plaintiff to reply in answer to this plea that the settlement record was obtained by fraud and if this can be proved there can be no question of res judicata. If the settlement record was in fact obtained by a fraud practised upon the settlement court there was in the eye of the law no settlement record at all upon the matter in question and it can be treated as nullity. Section 44, Evidence Act specially provides for such a case and it is not necessary that the appellant should first institute a separate suit to set aside the record on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff has proved deceit as well as injury arising from fraudulent concealments of legal proceedings by the mortgagee. In paying the decretal amount, the mortgagee discharged his own contractual obligation, and if it be held that the plaintiff has lost her right of redemption, the defendants must be held to take advantage of their own fraud to defeat the suit. Therefore, the plaintiff's right of redemption cannot be lost by reason of the sale because there was "no Judge, but a person invested with the ensigns of a judicial office was misemployed" in conducting the sale. The courts below have, therefore, rightly treated the sale as a nullity. 15. In the suit before us, as already stated, the sons of Harihar purchased the mortgaged land in execution of their money decree and the sale stands unreversed. The contention of Mr. Das is that the sale being in contravention of Order 34, Rule 14, Civil P. C., is an irregular sale liable to be set-aside merely on proof that the terms of that rule have been contravened; and as the sale stands, the plaintiff cannot successfully maintain a suit for redemption of the property without first getting the sale set aside. He has strongly re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence Act, permits a Judgment, order or decree to be challenged collaterally on the ground that "it was obtained by fraud. "This provision does not make a fraudulent judgment, order or decree a nullity for all purposes. The power to challenge it is limited to cases in which the judgment, decree or order is relevant under Section 40 or 41 or 42 of the Act. Section 40 permits the use in evidence of a judgment, order or decree the existence of which prevents a Court from taking cognizance of a suit or holding a trial when the question is whether the Court should take cognizance of such suit or hold such trial. This section provides the means by which a plea of 'res judicata' on the Civil Side or 'autrefois acquit' or 'autrefois convict' on the criminal side may be proved. Where a matter has once been decided between the parties the Court cannot try it again between them but Section 44 permits such a trial where it is alleged that the former judgment, decree or order was obtained by fraud. It is under this provision that the party aggrieved by a fraudulent decree can sue to get it set aside. This must be done within the time limited by Article 95, Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had been put in evidence, it would not in my opinion come within the mischief of Section 44, for that section permits the judgment, order or decree to be attacked on the ground that "it (the judgment, decree or order) was obtained by fraud". Under Order 21, Rule 92 the order cannot be challenged on the ground that it was obtained by fraud (-- 'Satish Chandra v. Makbelali Talukdar' 68 Cal LJ 431 and the challenge in this case is on the ground that the decree, in execution of which the sale was held, was obtained by fraud. This is a third reason why Section 44 has no application. 22. I consider that Section 44 has no application, and that the plaintiff cannot challenge the validity of the execution sale either on the ground of fraud in the execution, proceeding or on the ground of fraud in obtaining the decree. 23. I would therefore allow the appeal, set aside the decree and dismiss the suit. In the circumstances of the case I would direct that the parties bear their own costs. Ramaswami, J. 24. The question involved in this appeal is whether the plaintiff should be granted a decree for redemption of a usufructuary mortgage bond with respect to 3.83 acres of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney suit was fraudulent. The learned Judge was of opinion that the money decree cannot be challenged in this suit since the period under Article 95, Limitation Act for setting it aside had expired. The learned Judge further held that Section 44, Evidence Act had no application and that the plaintiff cannot challenge the validity of the execution sale either on the ground of fraud in the execution proceedings or on the ground of fraud in obtaining the decree. 27. In view of the difference of opinion this case has been placed before me for decision under Clause 28 of the Letters Patent. 28. The question formulated is -- "whether on the fact as stated in paragraph 2 (here para 18) of the judgment of Reuben, J. the plaintiff can ignore the sale on the ground that the decree was fraudulent". 29. In the approach to this question, it is important to remember that fraud does not make a judicial act or transaction void but only voidable at the instance of the party defrauded. The judicial act may be impeached on the ground of fraud or collusion in an active proceeding for recession by way of suit. The defrauded party may also apply for review of the judgment to the court which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered on account of the fraud. 30. A similar principle is enacted in Section 44, Evidence Act which states; "Any party to a suit or other proceeding may show that any judgment order or decree which is relevant under Sections 40, 41 and 42, and which has been proved by the adverse party, was delivered by a Court not competent to deliver it, or was obtained by fraud or collusion." In -- 26 Cal 891 a preliminary objection was taken that High Court had no jurisdiction to set aside a decree of the Alipore Court passing a decree upon an award to which the consent of the plaintiff, a pardanashin lady, had been fraudulently obtained and the relief sought should be in the nature of a bill of review filed in the Alipore Court. It was held by Stanley, J. after review of all the authorities that the objection was sustainable and that the High Court had jurisdiction to treat the decree of Alipore Court as a 'nullity and render its effect nugatory. In -- the plaintiff in a suit to recover possession of a tank adduced in evidence a petition of compromise and a, decree obtained upon it in a previous suit between the same parties relating to the same tank. The defendants stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may impeach it in the very suit or proceeding in which the judgment is proved against him by his opponent. This construction is supported by the language of the section, especially the portions underlined "Any party 'to a suit or other proceeding' may shew that any judgment, order or decree which is relevant under Section 40 41 or 42 'and which has been proved by the adverse party', was delivered by a court not competent to deliver it, or was obtained by fraud or collusion." Learned Counsel has not pointed out any other section or other part of the Act which modify or qualify the ordinary meaning of the language used in the section. It is conceded that a judgment which a court is not competent to pronounce is void and not merely voidable and the party affected may challenge such a judgment at any time without bar of limitation. Grammatically, lack of jurisdiction and the taint of fraud or collusion are placed exactly on the same footing in wording of Section 44. "Any party to a suit or other proceeding may show that any judgment or decree or order........" was delivered by a court not competent to deliver it or was obtained by fraud or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ardian, and in betrayal of her position of trust she fraudulently and dishonestly caused the 8 annas share to be entered in her name in the settlement Records, when in fact the plaintiff alone was entitled to the property as his father's heir. In his dissenting judgment Mullick, J. held that Section 44, Evidence Act was merely a rule of evidence, that the suit ought to have been framed as a suit to set aside the decree of Settlement Officer, and that Section 44 could not absolve the plaintiff from obedience to the rules of pleading and of the Limitation Act. This view was not accepted by the majority of the Full Bench who were of opinion that it was open to the plaintiff to show that the entry in the record of rights was obtained by fraud, in which case settlement would be null and void and it was not necessary to institute a suit to set it aside. In pp. 195, 197 Dawson Miller, C. J. states: "There can be no doubt in my opinion that a record properly made under the rules provided in the Regulation was meant to be final and conclusive except as therein provided and that the jurisdiction of civil courts regarding any matters decided by the settlement courts should be barr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position to the detriment of person, who is beneficially interested in the property. The mortgagee clearly stands in a position of fiduciary relationship and he cannot avail himself of his position as such to gain advantage in derogation of the rights of the mortgagor : and under the express provision of Section 90, Trust Act the mortgagee must hold the advantage so gained for the benefit of the mortgagor. On this aspect of the case also Mr. Raghosaran Lal raised the question -of limitation and argued that since the decree in the money suit has not been set aside within three years as provided by Article 95 the plaintiff cannot be granted a decree for redemption. The argument proceeds upon misconception. It is not necessary for the application of the equitable principle that the plaintiff should sue for setting aside the money decree or the sale. His suit is in effect to quote the language of the Judicial Committee in -- 'Nawab Sidhee Nazir All Khan v. Rajah Ojoodhyaram Khan to confess and avoid that sale, by imposing a trust on the estate which passed under it". It is not necessary therefore that the decree or sale should be set aside in order to grant to the plaintiff a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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