1. Heard on I.A. No. 4630/2013, an application for condonation of delay.
2. There is delay of seven years and 84 days in filing the present review petition.
3. It is pleaded in the application for condonation of delay that an application for compromise was filed on behalf of Municipal Council, however, no permission was taken from the Council in regard to compromise, hence, the Council was not aware about the fact of compromise. The President and CMO of the Council were hand in gloves, they did not inform the Council about the judgment. After seven years, contempt proceedings were initiated and the contempt case was registered as Cont. Case No.497/2013. Thereafter, notices were issued. Council received notice on 27.8.2013, then it came to the knowledge of the Council. Thereafter, certified copy of the judgment was obtained and review petition has been filed.
4. In the present case, there was no permission to enter into compromise by the Municipal Council. Apart from this, by way of compromise, right of ownership in regard to a land, which was of the ownership of the Municipal Council, was created in favour of the respondent. The compromise was void ab initio and is per se illegal.
5. Hon'ble Supreme Court in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others reported in (2013) 12 SCC 649 : (AIR 2014 SC (Civ) 67) has laid down following principles in regard to considering the facts by the Court in the matter of condonation of delay after considering earlier judgments of the Hon'ble Supreme Court:
"15. From the aforesaid authorities the principles that can broadly be culled out are:
(i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.
(ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.
(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.
(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.
(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.
(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.
(vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.
(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.
(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.
(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.
(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.
(xii) The entire gamut of facts are to be.;, carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.
(xiii) The State or a public body or an entity representing a collective cause should be , given some acceptable latitude."
6. In view of the facts of the case, after applying the principle of law laid down by the Hon'ble Supreme Court in the aforesaid case, application (I.A. No. 4630/2013) is allowed and the delay in filing the present review petition is hereby condoned.
7. Heard on merits of the review petition.
8. This petition has been filed for review of the order dt. 29.3.2006 passed in S.A.No.395/2003.
9. The court passed the following order :-
"Heard on I.A. No. 4780/2006, which is an application for compromise filed by the parties.
Learned counsel for the appellants and learned counsel the respondent Nos. 1 and 2 submit that the compromise has taken place between the parties.
In view of this, appeal has been disposed^ of in terms of compromise filed by the parties. The compromise application shall be part of the decree.
C.C. as per rules."
10. A compromise application (I.A. No. 4780/2006) was filed before the court. The compromise application was filed by the President, Nagar Panchayat Alampur and CMO, Nagar Panchayat Alampur. The following were the terms and conditions of the compromise:-
"That, the suit shop comprising area 10x6 sq. ft. situated in Ward No.7 in Town Alampur, District Bhind (M.P.) as per map attached to the plaint shall be in possession of appellants/plaintiffs and in the possession of their legal heirs and respondents/defendants cannot interfere in the peaceful possession of the suit shop, and the appellants/plaintiffs shall have a right of owner in possession upon the suit property and can construct or reconstruct the suit shop with the permission of respondents/plaintiffs, parties shall bear their own cost."
11. It is clear from the terms and conditions that right of ownership was granted in favour of the respondent. In accordance with the provision of Section 312 Chapter XI of the M.P. Municipalities Act, 1961 the compromise can only be entered with the permission by the Municipal Council. No such permission was taken by the President and CMO of Nagar Panchayat Alampur to file the compromise. Apart from this, right of ownership in regard to the land, which is of the ownership of the Municipal Council could not be granted because the first appellate court dismissed the suit of the respondent. In this view of the matter, the compromise was per se illegal. It was obtained by playing the fraud.
12. Section 17 of the Indian Contract Act, 1872 defines the 'fraud', which is as under:-
"17. Fraud' defined.- 'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:-
(1) the suggestion, as a fact, of that which , is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent."
13. Hon'ble Supreme Court in the case of MCD v. State of Delhi and another, (2005) 4 SCC 605 : (AIR 2005 SC 2658) has held as under in regard to effect of 'fraud' -
19. The trial court heard the respondent on sentence also and passed the following order:
"Convict in person with counsel.
Heard on sentence.
It is contended that he is first offender. He is not a previous convict nor habitual offender. He has faced trial since 1991. He is aged about 57 years. He is not doing any business due to his bad health.
Considering the above facts and circumstances, and gravity of the nature of the offence i.e. extent of construction raised by the accused for commercial (sic purposes) as 11 shops at ground floor and 11 shops at first floor, I am not inclined to release the accused/convict on probation.
Hence request declined.
In the interest of justice, sentence of six months' SI, with fine of 5000, ID one month SI is imposed upon the convict for offence under Sections 332/461, DMC Act. Fine deposited. Convict remained for sentence."
20. The Additional Sessions Judge, New Delhi also in Civil Appeal No. 7 of 2002 (Annexure P-2) dismissed the appeal as there is no infirmity in the order of the trial court and upheld the conviction order passed by the trial court on the point of sentence. The appellate court held that no interference is required in the order passed by the trial court regarding point of sentence. Since the appellant MCD was not given any opportunity by the High Court to file conduct report of the respondent, the order impugned in this appeal is liable to be set aside.
14. Hon'ble Supreme Court in the case of A. V. Papayya Sastry and others v. Govt, of A.P. And others - (2007) 4 SCC 221 : (AIR 2007 SC 1546) has held as under in regard to 'fraud':
21. Now, 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. Before three centuries, Chief Justice Edward Coke proclaimed:
"Fraud avoids all judicial acts, ecclesiastical or temporal."
22. It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the court, tribunal or authority is a nullity and non est in the eye of the law. Such a judgment, decree or orderby the first court or by the final courthas to be treated as nullity by every court, superior or inferior. It can be challenged in any court, at any time, in appeal, revision, writ or even in collateral proceedings.
23. In the leading case of Lazarus Estates Ltd. v. Beasley Lord Denning observed: (All ER p. 345 C)
"No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud."
24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p. 644, explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was "mistaken", it might be shown that it was "misled". There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside, if the court was imposed upon or tricked into giving the judgment.
25. It has been said: fraud and justice never dwell together (fraus et jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari debent).
26. Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In lfaud one gains at the loss of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of "finality of litigation" cannot be stretched to the extent of an absurdity that it can be utilised as an engine of oppression by dishonest and fraudulent litigants.
27. In S.P. Chengalvaraya Naidu v. Jagannath, : (AIR 1994 SC 853, P. 855, Para 7) this Court had an occasion to consider the doctrine of fraud and the effect thereof on the judgment obtained by a party. In that case, one A by a registered deed, relinquished all his rights in the suit property in favour of C who sold the property to B. Without disclosing that fact, A filed a suit for possession against B and obtained preliminary decree. During the pendency of an application for final decree, B came to know about the fact of release deed by A in favour of C. He, therefore, contended that the decree was obtained by playing fraud on the court and was a nullity. The trial court upheld the contention and dismissed the application. The High Court, however, set aside the order of the trial court, observing that "there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence". B approached this Court.
28. Allowing the appeal, setting aside the judgment of the High Court and describing the observations of the High Court as "wholly perverse", Kuldip Singh, J. stated: (SCC p. 5, para 5)
"The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. 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 save 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."
(emphasis supplied)
29. The Court proceeded to state: (SCC p. 5, para 6) : (P. 855, Para 8)
"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."
30. The Court concluded: (SCC p. 5, para 5) : (P. 855, Para 7)
"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."
31. In Indian Bank v. Satyam Fibres (India) (P) Ltd., : (AIR 1996 SC 2592, P. 2597, Para 22) referring to Lazarus Estates and Smith v. East Elloe Rural Distt. Council this Court stated: (SCC pp. 562-63, para 22)
"22. 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 party 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 rules, 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."
15. As per the principle of law laid down by the Hon'ble Supreme Court, fraud vitiates everything.
16. Hence, the present review petition is allowed. The order under review is hereby recalled. S.A. No. 395/2003 is restored to file.
Petition allowed.