R. LAKSHMI NARASIMHA RAO, Honble Member
This application is filed seeking recall of order dated 27-4-2012 for the purpose of enabling the counsel for the opposite party No.3 to advance arguments and the matter be heard in accordance with the order directing the hearing of CC Nos.108 and 118 of 2010 together.
The petitioner in the affidavit filed in support of the petition, has stated that after filing the vakalath, he filed counter affidavit along with supporting documents and also affidavit in lieu of chief, he has stated that as per the understanding between the parties, agreement of sale dated 04-9-2008 comprehends allotment of flat in lieu of the flat already agreed to be sold and agreement dated 15-5-2007 stands cancelled. Further, he has stated that this Commission had passed order on 06-2-2012 directing the registry to club CC No.108/2010 with CC No.118/2010 and the matter was posted to 07-2-2012. CC.No.108/2010 came up for hearing and reserved for orders without noticing the order dated 06-2-2012 and as such, two applications to reopen the matter were filed and on 19-4-2012 the matter was requested to be passed over by junior counsel and by the time the senior counsel reached the Commission, the complaints were reserved for orders. CC No.118/2010 was reopened for arguments and CC No.108/2010 could not be reopened as the orders were pronounced. Pronouncement of the order in CC 108/2010 is contrary to the order passed on 06-2-2012 as both matters were clubbed.
The respondent has resisted the application on the premise that the petitioner has filed written arguments in CC 108/2010 and CC 118/2010 and that the order in CC No.108/2010 was pronounced on 27-4-2012 on merits and this Commission cannot reopen the matter and the petitioner has to file appeal against the order.
Heard both counsel.
The point for consideration is whether the petitioner is entitled to the relief sought for?
A perusal of the order dated 06-2-2012 would make it clear that the CC No.108/2010 and CC No.118/2010 were directed to be heard together. The first complainant in CC 108/2010 has filed his affidavit stating that he entered into development agreement with the opposite parties 4 to 7. In para 10 of the order, the description of the flat number is mentioned as 402 and para 11 of the order dealt with the amount to be paid as also the amount that was paid by the first complainant. Paras 10 and 11 of the order dated 27-4-2012 read as under:
10. Point No.1: There is no dispute of the fact that the opposite parties No.1 to 3 entered into development agreement with the opposite parties No.4 to 7 for development of the land and construction of a residential complex consisting of 20 flats and the opposite parties No.4 to 7 are entitled to 50% of the total built up area. While the opposite parties No.4 to 7 are entitled to the balance 50% built up area. On 04-9-2008 the complainant entered into agreement for sale with opposite parties No.1 to 3 for purchase of Flat No.402 admeasuring 1712 sft. for consideration of Rs.56,50,000/-. As per clause 12 of the agreement of sale the opposite parties no.1 to 3 have to complete construction work of the flat and hand over it to the complainant within fifteen months from the date of agreement of sale, i.e. 4-12-2009.
11. The complainant paid the amount of Rs.44,50,000/- on various dates till 11-9-2009. As per clause 3 of the agreement of sale, the complainant has to pay balance sale consideration at the time of handing over of the flat by the opposite parties no.1 to 3. The opposite parties no.1 to 3 state that entire construction work except the finishing work has been completed whereas the complainant submits that 50% of the construction work is completed. Admittedly, wood work, electrical fitting work, plumbing and drainage work has to be carried out as also installation of the transformer and elevator etc. In paragraphs 6 and 7 of the written version, the opposite parties No.1 to 3 admit receipt of the amount of Rs.44,50,000/- and incomplete construction of the flat. The paragraph reads as under:
That the opposite party started construction of the project and five floors were completed in super structure and the finishing work is pending. During the said course of business the complainant approached the opposite party no.1 and entered into agreement of sale of Flat No.401. Subsequently Flat No.402 is also allotted to the complainant. This opposite parties allotted the flat No.402 to the complainant for Rs.56,50,000/- (Rs.fifty six lakhs fifty thousand only) and the complainant has paid only Rs.44,50,000/- (Rs.forty four lakhs and fifty thousand only) and these opposite parties received the same in the mode of cash and various cheques. However, the complainant still has to pay Rs.12,00,000/- (Rs.twelve lakhs only) towards the balance sale consideration of the flat No.402.
It is further submitted due to the intervention of the neighbors and objections and also due to the filing of suit 3363 of 2008 against the municipal corporation by the land owners in respect of the present subject matter wherein the civil court passed status quo order consequent to which the opposite party No.1 could not further proceed construction work. It is only after the release of permit under building regularization scheme by the GHMC vide proceedings in file No.9874/CP9/CZ dated 5-10-2009 the construction of the scheduled flat. This opposite parties are ready willing to handover the said flats after executing all the works as per requirement of the complainant and in accordance with the agreed terms under the agreement. Therefore the complainant cannot claim any deficiency in service in the present case when still amount of Rs.12,00,000/- is due and payable by him. This respondent in clear terms submit that as per the agreement the work is started and construction is made upto brick and plastering level of the concerned flat and remaining finishing work will be completed within 6-8 months time. It is denied that the construction activity is stopped and there is no improvement.
The first complainant is the husband of the second complainant and the third complainant is the daughter of the complainants No.1 and 2. The first complainant entered into agreement of sale with the first complainant for purchase of flat No.401 and to that effect he had remitted sale consideration of Rs.31,50,000/- and the balance amount was agreed to be paid. The learned counsel for the opposite party No.3 would contend that the agreement for purchase of flat No.401 was made for consideration of Rs.39,50,000/- and subsequently the complainant No.1 and the other complainants intended to purchase a bigger flat than flat No.401 and on their request flat No.402 was agreed to be sold for consideration of Rs.56,50,000/-. The amount of Rs.31,50,000/- paid by the first complainant was agreed to be adjusted towards the sale consideration of flat No.402 and it was agreed that the balance amount of Rs.25,00,000/- was to be paid by the complainants at the time of registration of the sale deed and to that effect the complainants and the opposite parties 1 to 3 entered into an agreement with an understanding that purchase of flat No.401 under the earlier agreement entered into in respect of flat No.401 stood cancelled.
The agreement of sale would show that flat No.402 was agreed to be sold by the opposite parties 1 to 3 in exchange for the flat No.401. The relevant paragraph of the agreement would make it clear that flat No.402 and flat No.401 were not intended to be sold together by the opposite parties 1 to 3 and the over all reading of the agreement takes us to the conclusion that the flats number 401 and 402 were intended to be exchanged and not agreed to be purchased or sold simultaneously by the opposite parties 1 to 3 in favour of the either the first complainant or the complainant No.1 to 3.
Added to the fact of exchange of the flats, the first complainant had presented sale deed before the Sub Registrar, Ranga Reddy which was not registered on the premise that the third opposite party had not signed the document. The learned counsel for the third opposite party has contended that the rejection of the sale deed by the Sub Registrar would itself be sufficient for drawing inference against the complainants in regard to the fraud played by them on the opposite party No.3 as also on this Commission. He had submitted that the order obtained by the complainants on 27-4-2012 by playing fraud on it is to be recalled.
A perusal of the agreement would show that there has been correction of the word âexchange and it would be amply clarified if the relevant paragraph of the agreement is reproduced herein below:
Whereas the second party already entered into agreement of sale with the First party to purchase Flat No.401 fourth floor, admeasuring 1034 sq. ft. along with an undivided share of 30.63 sq. yds. Along with amenities and car parking and paid Rs.10,50,000/- as per agreement dated 15-5-2007. now the second party with a view to purchase a big flat with three bed rooms admeasuring 1712 sq. ft. approached the first party and the first party agreed to sell the big flat No.402 admeasuring 1712 sq. ft.in addition to the earlier flat No.401 admeasuring 1034 sq. ft. on an enhanced amount of Rs.20,00,000/- (Rupees Twenty lakhs only) in addition to the sale consideration of Rs.36,50,000/- (Rupees Thirty Six Thousand (sic lakhs) Fifty thousand only) under the agreement of sale dated 15-5-2007. The first party agrees confirms and admits the allotment of flat No.402, admeasuring 1712 sq. ft.
Thus, there is no other option except the irresistible conclusion as regards to the manner in which the agreement of sale was tampered with and the order was obtained in CC No.108/2010 and as such the order passed on 27-4-2012 by means of playing fraud on this Commission by the complainants is liable to be set aside. The complexity of the matter involving fraud and tampering with of the documents can only be decided on full fledged trial in civil court.
The learned counsel for the opposite party No.3 has relied upon the following decisions;
1. Oriental Insurance Company Limited V. Muni Mahesh patel (2006) 7 SCC 655
2. Lilly kutty V. Scrutiny Committee, SC and ST others (2005) 8 SCC 283
3. Neelam Gupta V. Reliance life insurance and another I (2011) CPJ 241
4. Divisional Forest Officer, Eluru v. District judge, West Godavari and others. 2011 (2) ALD 147
In Muni Mahesh Patel Decision (supra) the Honble Supreme Court considered the nature of the disputes to be adjudicated by Consumer Fora and the complexity of the issues involved in the matter where the parties have to be relegated to civil court. The Supreme Court has made distinction between the cases which involve disputed factual questions and those which do not. The Apex court held in paras 10 and 11 as follows:
10. Proceedings before the Commission are essentially summary in nature and adjudication of issues which involve disputed factual questions should not be adjudicated. It is to be noted that the Commission accepted that the insured was not a teacher. The complainant raised a dispute about the genuineness of the documents (i.e. proposal forms) produced by the appellant.
11. The Commission having accepted that there was wrong declaration of the nature of occupation of the person insured, should not have granted the relief in the manner done.
In Lilly Kuttys case the Supreme Court was considering the effect of obtaining an order based on a false certificate filed with a view to gain undue advantage and the court held that such an act of the applicant would amount to commission of fraud and that fraudulent acts are not encouraged by the courts. The Supreme Court has observed the effect of the fraud and fraudulent misrepresentation in the proceedings before the Scrutiny Committee in the following manner.
Fraud as is well known vitiates every solemn act. Fraud and justice never dwell together.
Fraud is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by word or letter."
It was further held:
A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad.
An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous.
In Arlidge and Parry on Fraud, it is stated at p. 21:
"Indeed, the word sometimes appears to be virtually synonymous with 'deception', as in the offence (now repealed) of obtaining credit by fraud. It is true that in this context 'fraud' included certain kinds of conduct which did not amount to false pretences, since the definition referred to an obtaining of credit 'under false pretences, or by means of any other fraud'. In Jones, for example, a man who ordered a meal without pointing out that he had no money was held to be guilty of obtaining credit by fraud but not of obtaining the meal by false pretences: his conduct, though fraudulent, did not amount to a false pretence. Similarly, it has been suggested that a charge of conspiracy to defraud may be used where a 'false front' has been presented to the public (e.g. a business appears to be reputable and creditworthy when in fact it is neither) but there has been nothing so concrete as a false pretence. However, the concept of deception (as defined in the Theft Act, 1968) is broader than that of a false pretence in that (inter alia) it includes a misrepresentation as to the defendant's intentions; both Jones and the 'false front' could now be treated as cases of obtaining property by deception."
Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata.
In Shrisht Dhawan v. Shaw Bros. it has been held that: (SCC p. 553, para 20)
Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct.""
Page 984
[See also Vijay Shekhar and Anr. v. Union of India and Ors. and Vice-Chairman, Kendriya Vidyalaya Sangathan and Anr. v. Girdharilal Yadav , ]
Yet recently in Bhaurao Dagdu Paralkar v. State of Maharashtra and Ors. [JT 2005 (7) SC 530], a Division Bench of this Court inter alia following Ram Chandra Singh (supra) and other decisions observed:
"Fraud" is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter-"
Neelam Guptas is a case where the National Commission upheld the order of the State Commission which dismissed the complaint on the premise of suppression of material fact by the complainant.
In Divisional Forest officers decision, the Forest Settlement officer issued proceedings and recorded that Patta was issued in favour of the applicant. The school register of admissions revealed that the applicant was not born on 16-12-1951 by which date he claimed that he was granted patta by the Forest Settlement officer. The Honble High Court observed that fraud was played on the Forest Settlement Officer for the second time when he recorded patta in favour of the original claimant in the year 1931 and the High Court observed that at another time fraud was played when land in Survey No.537 was not subjected to sub division in the year 1931 when pattas were stated to have been granted in favour of the applicants. The High court has held that fraud in any form vitiates the proceedings. It was held in para 13 as follows:
Before examining whether or not the proceedings of the Forest Settlement Officer, dated 18-12-1984 is vitiated by fraud, it is necessary to understand what the expression âfraudâ means. A âfraud means an act of deliberating deception with the design of securing something by taking unfair advantage of the other, to gain by anothers loss. (S.P.Chengalvaraya Naidus case supra) T.Suryachandra Rao case supra) Behari Kunj Sahkari Avas Samitis case (supra) âFraud has been defined as an act of trickery or deccit. In Websters Third New International Dictionary fraud in equity has been defined as an act or omission to act, or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Blacks Law Dictionary, âfraud, is defined as an international perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, is one which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to the Halsburys Laws of England, a representation is deemed to be false and therefore, a misrepresentation if it was, at the material date, false in substance and in factâ¦â¦â¦â¦â¦â¦
In the light of the ratio laid in the aforementioned decisions and on application of the principle laid therein to the facts of the case on hand, we are of the considered opinion that the order dated 27-4-2012 was obtained by the complainants by playing fraud on this Commission and as such it is liable to be set aside.
In the result the application is allowed. The order dated 27-4-2012 is recalled by substituting the following relief.
âIn the result the complaint is dismissed. The complainants are at liberty to approach civil court and in case they file a suit they will be entitled to seek exclusion of the time spent before the Commission under Section 14 of the Limitation Act in view of the judgement of the Honble Supreme Court in the case of Laxmi Engineering Works v. P.S.G.Industrial Institute II (1995) CPJ 1 (SC).