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TMI Blog2008 (5) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... allegations of fraud are made. 3. The facts when noticed in the case would bring out the alleged aspect of greed involved in this case, which the petitioner has termed as a fraud on the part of the respondent. 4. At issue is an ex-parte decree dated 23.12.2005 passed in favour of respondent M/s G.T. Agencies, a registered partnership firm having its office at Show Room No. 51, Sector 26, Madhya Marg, Chandigarh for recovery of ₹ 5,67,54,376-29P. Petitioner alleges that this decree has been obtained by fraud and would refer to the facts here-in-after noticed in support of the allegations. The petitioner on coming to know about the same has filed an appeal against this ex-parte decree through which recovery of above-noted amount of more than ₹ 5-1/2 crores is allowed. Petitioner claims that the appeal is filed within thirty days of acquiring the knowledge about the decree and thus this appeal is instituted within time. It is stated that as a matter of abandoned precaution, the petitioner has filed an application under Section 5 of the Limitation Act seeking condonation of delay of 455 days, though the appeal is otherwise within a period of limitation from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Area-I, Chandigarh by way of equitable mortgage. Respondent-partnership consists of Lt. Col. A.S. Smt. Surinder Ajit Judge, Smt. Nagina, Smt Shah E. Naaz and Kuljeet Singh Sehgal. Apparently, it is a family partnership concern of Col. A.S. Judge. Smt. Surinder Ajit Judge, being his wife, and Smt. Nagina and Smt.Shah E Naaz, his two daughters. The petitioner has placed on record the copy of Form 'A', which gives particulars of the partnership firm and the same is dated 4.5.2005. One day after registration, suit is filed on 5.5.2005, Col. A.S. Judge is also the General Manager of petitioner-company, i.e., M/s Punjab Beverages Pvt. Ltd. Respondent partnership concern sued the petitioner-company at three addresses mentioned in the suit and these are Friends Colony, New Delhi, Administrative Office at 8/32, Kirti Nagar, New Delhi and Factory at Plot No. 180, Industrial Area, Chandigarh. The summons in this suit was effected upon the petitioner-company, which is defendant in the suit, through its General Manager, who is none other than Col. A.S. Judge, managing partner of the respondent-plaintiff partnership concern. He accepted the summons and engaged a counsel Shri D.V. Meht ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y days from the date of obtaining knowledge and as a matter of precaution, as already noticed, filed an application under Section 5 of the Limitation Act. It is, thus, pleaded by the petitioner-company that fraud is writ large in this case and there is no requirement of framing issue or receiving evidence. The ex-parte decree would require immediate setting-aside and the suit is required to be properly adjudicated as per law. According to the petitioner, rather than appreciating this fact the Appellate Court had framed an issue in regard to the locus of Ajit Singh in filing this appeal and the application. 11. The plea of the petitioner as projected is stoutly opposed by the respondent. As already noticed, the respondent would base its case on pure technicalities. It is first submitted that the prayer made in the petition is limited and is to the effect that there is no requirement of receiving oral evidence for setting-aside the ex-parte order and accordingly the order framing additional issue and directing the petitioner to produce minutes of meeting etc. need not to be set aside. Mr. Aggarwal, counsel representing the respondent would say that the prayer made in the revision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal and that of a suit and dispose of the application under Section 5 of the Limitation Act on the basis of documents available before the trial court on record. It is in this context that debate about the scope of Article 227 ensued when Mr. Chandhiok pleaded that this Court must set right the fraud to convey a clear message that a person who approaches the court to practice fraud cannot be allowed to take advantage thereof. 14. To justify the action of the petitioner in filing application under Order 9 Rule 13 CPC for setting aside the ex-parte decree and simultaneously filing the appeal against the said ex-parte decree, (the counsel for the petitioner has referred to the decision of Supreme Court in the case of P. Kiran Kumar v. A.S. Khadar and Ors. [2002] 3 SCR 775 . As per the law laid down in this case, prior to the date of explanation added under Order 9 Rule 13, a defendant burdened with an ex-parte decree could apply under Order 9 Rule 13 for setting aside ex-parte decree and could also file an appeal under Section 96 against the said ex-parte decree. It is also observed that mere fact of filing the appeal did not take away the jurisdiction to entertain and dispose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en reached and the workman would not be appearing. The Commissioner allowed the application and dismissed the claim as settled and withdrawn. The workman thereafter filed an application stating that the deception had been carried out and that he had never entered into any agreement with the management. Strangely, the respondent management also denied if there was any agreement which was against the earlier stand taken by it and thus the Commissioner set-aside his own order for deciding the matter on merits. Against this order, the respondent concerned approached the High Court, which set aside the order passed by the Commissioner by holding that he had recalled and re viewed his own order, which is not be permissible. The workman had then gone the Hon'ble Supreme Court, which felt so concerned and observed that it made very telling observation by expressing itself as follows: We are greatly disturbed by the insensitivity reflected in the impugned judgment rendered by the learned Single Judge in a case where judicial mind would be tempted to utilize all possible legal measures to impart justice to a man mutilated so outrageously by his cruel destiny. The High Court non-suited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court has then noticed that differences in jurisdiction between Articles 226 and 227 to note that writ of certiorari is an exercise of its original jurisdiction, whereas exercise of supervisory jurisdiction is not an original jurisdiction in that sense and it is akin to appellate, revisional or corrective jurisdiction. It is further noticed that in exercise of supervisory jurisdiction, the High Court may not only quash or set aside the impugned proceedings, judgment or order, but it may also make such directions as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. The power available with the High Court to be exercised in appropriate cases while exercising supervisory jurisdiction to substitute such a decision of its own in place of the impugned decision, as the inferior court or the tribunal should have made is also recognised by the Hon'ble Supreme Court. It is in this context it is observed that supervisory jurisdiction is capable of being exercised suo moto as well, whereas jurisdiction under Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court should have seen if the proceedings before the District Judge were in accordance with the procedure prescribed and as per the law applicable. To direct the appellant in this case to file a separate suit for setting aside the decree of divorce on the ground of fraud was observed to be hardly a solution to the case. In Pepsi Foods Limited v. Special Judicial Magistrate 1998CriLJ1 , the Hon'ble Supreme Court observed that the nomenclature under which the petition is filed is not relevant and petition under Article 226 can be treated as one under Article 227 or Section 482 Cr.P.C. It was further observed that the power of the court to discharge the accused at the time of framing of charge or existence of remedy of appeal and revision would not be a bar to invoke the jurisdiction of the High Court under Article 227 and Section 482 Cr.P.C. In this case only, it is observed that the powers conferred on the High Court under Articles 226 and 227 of the Constitution and under Section 482 of the Code have no limits but more the power more due care and caution is to be exercised while invoking these powers. 18. Prayer of Mr. Chandhiok, thus, is that this Court would have ample ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to interfere under Article 136, which was sought to be invoked by the appellant. The Hon'ble Supreme Court went on to observe that the approach of the High Court cannot be thwarted on the plea that the second review was not maintainable or High Court could not ignore its earlier orders dismissing the appeals at the admission stage or on the ground of delay. Mr. Chandhiok would, thus, say that an order or a decree obtained by fraud would need to be corrected dehors any technicalities and that is essential to ensure unpolluted delivery of justice. 19. In Hamza Haji's case, reference is made to various judgments and commentaries to bring home the effect of fraud played on the court. It is observed in R. v. Duchess of Kingston that: Fraud' is an extrinsic, collateral act, which vitiates the most solemn proceedings of courts of justice. Lord Coke says it avoids all judicial acts, ecclesiastical and temporal. 20. Any judgment which is based on fraud has to be treated as nullity. Reference can here be made to Kerr on Fraud and Mistake, which is: In applying this rule, it matters not whether the judgment impugned has been pronounced by an inferior or by the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the court has been impressed upon, has been made an instrument of injustice and has been misled into a false or improper judgment. Indeed, the connection of fraud with a judgment constitutes one of the chief causes for interference by a court of equity with the operation of a judgment. The power of courts of equity in granting such relief is inherent, and frequent applications for equitable relief against judgments on this ground were made in equity before the practice of awarding new trials was introduced into the courts of common law. Where fraud is involved, it has been held, in some cases, that a remedy at law by appeal, error, or certiorari does not preclude relief in equity from the judgment. Nor, it has been said, is there any reason why a judgment obtained by fraud cannot be the subject of a direct attack by an action in equity even though the judgment has been satisfied. 25. It may need a mention here that not every fraud is sufficient to move a court of equity to grant relief for a judgment. Equity must have jurisdiction over the subject matter. For obtaining such relief, it must appear that the fraud was practised in the very act of obtaining the judgment and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be challenged in any court even in collateral proceedings. 28. One would often hear loud calls in the corridors of the Courts that those who come to the court must come with clean hands. The courts are meant for imparting justice. A person, who has obtained advantage by misusing the process of the court or abusing the process of the court, cannot be allowed to retain his illegal gains indefinitely. In S.P. Chengalvaraya Naidu's case (supra), the Hon'ble Supreme Court made observations in this regard by saying: property-grabbers, tax- evaders, bank loan-dodgers and other unscrupulous persons from all walks of life find the court process a convenient lever to retain the illegal gains indefinitely. 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. 29. Even in A.V. Papayya Sastry and Ors. v. Government of A.P. and Ors. AIR2007SC1546 , the Hon'ble Supreme Court has clearly observed that it is well settled principle of law that if any judgment or order is obtained by fraud, it cannot be said to be a judgment or order in law. Chief Justice E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, revisional or corrective jurisdiction. 32. I am not inclined to accept the narrow view canvassed by Mr. Aggarwal in regard to sweep of the jurisdiction available under Article 227 of the Constitution. While saying that such jurisdiction should be in the nature of appellate, revisional or corrective, the counsel, in my view, is not appreciating the word 'akin' used by the Hon'ble Supreme Court while describing the nature of the jurisdiction under Article 227 of the Constitution. It has been so described as akin to such jurisdiction but cannot be so termed as same or similar. Obviously, the appellate, revisional or corrective jurisdiction may be akin to this supervisory jurisdiction and it is only to describe it that the Hon'ble Supreme Court appears to have referred it so. Article 227 of the Constitution confers an extraordinary discretionary constitutional remedy and cannot be confined to other jurisdiction exercised by the High Court. A fraud, as noticed above, would vitiate everything and in such cases even the self imposed restriction, if any, would lose significance as the aim would be to correct undue fraud practised on the court. It is not without reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncern. He having obtained this decree is now wanting to retain this gain indefinitely by sticking on to technicalities. 34. Then what is the call of justice?. Is it to make order in routine confined to traditions and look for the relief claimed and pass an order limiting to the said relief or it is such a case where judicial mind should feel tempted to use all possible legal measures to impart justice. It has been noticed that power under Art.227 or 226 of the Constitution is to advance justice and not to thwart it. In Surya Dev Rai's case (supra), Hon'ble Supreme Court has held that the High Court in exercise of supervisory jurisdiction may not only quash or set aside the proceedings, judgment or order but may also make such directions as the facts and circumstances of the case may warrant may be by way of guiding the inferior court or tribunal as to the manner it would proceed further or afresh. It can even substitute such a decision of its own in place of the impugned decision. The High Court, even in the absence of power parallel to Article 142, can mould relief to do complete justice between the parties. As already noticed, phrase complete justice can not be crib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts hand back by not interfering and stand on technicalities to say that it would not undo the effect of fraud, prayer made in the petition being of restrictive nature? 38. Though there was some lively debate in regard to nature and power of this Court to interfere while exercising revisional jurisdiction under Article 227, yet it was not urged that this Court would not have jurisdiction to suo-moto interfere, specially so when fraud is alleged and to an extent is made out from the record. The observation of the Hon'ble Supreme Court in Indian Bank's case (supra) on the basis of the case of Lazarus Estates and Smit (supra) would be a guideline that the judiciary in this country possesses inherent power, specially under Section 151 C.P.C. to even re-call its judgment or order if it is obtained by fraud on court. It is only when the affected party is defrauded that he may be asked to have a separate remedy and this position would not apply when the fraud is played on the court. Facts in the instant case reveal that the court was deceived in passing this judgment and decree. Equitable relief for the judgment, as noted in foregoing paragraphs, where fraud is committed by a su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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