Holding

The non‑production and non‑mention of the release deed amounted to fraud on the court, making the preliminary decree a nullity.

Summary

Jagannath, acting as a clerk for Chunilal Sowcar, purchased property at a court auction on behalf of his master and later executed a registered release deed relinquishing all his rights to the property. Despite this, he filed a partition suit claiming ownership and obtained a preliminary decree, without disclosing the release deed. The original owners (appellants) learned of the deed only during the final decree hearing and challenged the decree on the ground of fraud. The trial court dismissed the challenge, but the High Court reversed that decision, allowing the decree to stand. The Supreme Court held that Jagannath's non‑production and non‑mention of the vital release deed constituted fraud on the court, rendering the preliminary decree a nullity, and set aside the High Court's judgment, restoring the trial court's order.

Issues considered

Whether the non‑disclosure of a release deed that extinguished the plaintiff's title amounts to fraud on the court warranting the setting aside of the preliminary decree.
Whether a litigant has a legal duty to disclose all material documents and whether failure to do so constitutes extrinsic fraud.
Whether a judgment obtained by a party based on falsehood is a nullity despite the principle of finality of litigation.

Subjects

fraud on the courtnon‑disclosure of vital documentpreliminary decreepartition suitclean‑hands doctrinenullity of judgmentcivil procedure

Judgment

A S.P. CHENGALVARAYA NAIDU (DEAD) BY L.RS.
v.
.JAGANNATH (DEAD) BY L.RS. AND ORS.

OCTOBER 27, 1993

B [KULDIP SINGH AND P.B. SAWANT, JJ.)
«,

Practice & Procedur~ourt Proceedings--Non-production or non-
mentioning of vital document in order to gain advantage-Litigant guilty of
playing fraud on the Court and the opposite party-Such a litigant has no
C right to approach the Court.

One 'J', predecessor-in-interest of the respondents, purchased at
Court auction certain properties which belonged to the appellan~, on
behalf of his employer 'C', the decree-holder. Subsequently 'J' relinquished
all his rights in the said property in favour of 'C. Meanwhile the a}>pel-
D lants, judgment-debtors paid the total decretal amount to 'C'. Having
received the decretal amount, 'C' was not entitled to the property which he
purchased through 'J'. But without disclosing the relinquishment deed
executed in favour of 'C', the said 'J' filed a suit for partition of the
property and obtained a preliminary decree.
E
Only during the hearing for final decree, the appellants came to
know about the release deed and challenged the application on the ground
of no1t1-disclosure of the release deed, as it amounted to fraud. The Trial
Judge dismissed the application for grant of final decree. The plaintiff's'
appeal against this order having been allowed by the High Court, the
F defendant preferred the present appeal.

Allowing the appeal this Court

HELD : 1.1. The courts of law are meant for imparting justice
between the parties. One who comes to the court, must come with clean-
G hands. More often than not, process of the court is being abused. Proper-
ty-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. A person, whose case is based on
falsehood, has no right to approach the court. He can be summarily thrown
H out at any stage of the litigation. (426-H, 427-A]
422
CHENGALVARAYANAIDUv.JAGANNATII[KULDIPSINGH,J.) 423

1.2. In the instant casei the non-production and even non-mentioning A
-of the release deed at the trial tantamounts to playing fraud on the court.
The High Court was not correct in its view that the appellants-defendants
could have easily produced the certified copy of the registered release deed
and non-suited the plaintiff. A litigant, who approaches the Court, is
bound to produce all the documents executed by him which are reievant B
to the litigation. If he withholds a vital document in order to gain ad-
vantage then he would be guilty or playing fraud on the court as well as on
the opposite party. (427-D-E-F] -~

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 994 of
1972. c:
From the Judgment and order dated 18.4.1967 of the Madras High
Court in Appeal No. 347 of 1962.

Ms. Lily Thomas for the Appellants.
D
A.T.M. Sampath and Ms. Pushpa Rangam for the Respondents.

The Judgment of the Court was delivered by

KULDIP SINGH, J. "Fraud-avoids all judicial acts, acclesiastical or
temporal" observed Chief Justice Edward Coke of England about three E
centuries ago. It is the settled proposition of law that a judgment or decree
obtained by playing fraud on the court is a nullity and nbnest in the eyes
of law. Such a judgment/decree - by the first court or by the highest court
- has to be treated as a nullity by every court, whether superior or inferior.
It can be challenged in any court even in collateral proceedings.
F
Predecessor-in-interest of the respondents-plaintiffs filed application
for final decree for partition and separate possession of the plaint -
properties and for mesne profits. The appellants-defendants contested the
application on the ground that the preliminary decree, which was sought
to be made final, was obtained by fraud and, as such, the application was
liable to be dismissed. The trial Judge accepted the contention and dis- G
missed the application for grant of final decree. The respondents-plaintiffs
went in appeal before the High Court. A Division Bench of the High Court
went through plethora of case - law and finally allowed the appeal and set
aside the order of the trial court. This appeal is by way of certificate
granted by the High Court. - H
424 SUPREME COURT REPORTS [1993) SUPP. 3 S.C.R.

A One Jagannath was the predecessor-in-interest of the respondents.
He was working as a clerk with one Chunilal Sowcar. Jagannath purchased
at court auction the properties in dispute whi~h belonged to the appellants.
Chunilal Sowcar had obtained a decree and the court sale was made in
execution of the said decree. Jagannath had purchased the property in the
court auction on behalf of Chunilal Sowcar, the decree-holder. By a
B registered deed dated November 25, 1945, Jagannath relinquished all his
rights in the property in favour of Chunilal Sowcar. Meanwhile, the appel-
lants who were the judgment-debtors had paid the total decretal amount
to Chunilal Sowcar. Thereafter, Chunilal Sowcar, having received the
decretal amount, was no longer entitled to the property which he had
C purchased through Jagannath. Without disclosing that he had executed a
release deed in favour of Chunilal Sowcar, Jagannath filed a suit for
partition of the property and obtained a preliminary decree. During the
pendency of the suit, the appellants did not know that Jagannath had no
locus-standi to file the sµit because he had already executed a registered
D release deed, relinquishing all his rights in respect of the property in
dispute, in favour of Chunilal Sowcar. It was only at the hearing of the
application for final decree that the appellants came to know about the
release deed and, as such, they challenged the·application on the ground
that non-disclosure on the part of Jagannath that he was left with no right
in the property in dispute, vitiated the· proceedings and, as such, the
E preliminary decree obtained by Jagannath by playing fraud on the court
was a nullity. The appellants produced the release deed (Ex.B-!.5) before
the trial court. The relevant part of the release deed is as under:-

"Out of your accretions and out of trust vested on me, pur-
F chased the schedule mentioned properties benami in my name
through court auction and had the said sale confirmed. The said
properties are in your possession and enjoyment the said proper-
ties should henceforth be held and enjoyed with all rights by you
as had been done:

G "So far. If any civil or cirminal proceedings have to be conducted
in respect of the said properties or instituted by others in respect
of the said properties you shall conduct the said proceeding
without reference to. me and shall be held liable for the profits or
losses you incur thereby. All the records pertaining the aforesaid
H properties are already remaining with you."
CHENGALVARAYANAIDUv. JAGANNATH [KULDIP SINGH,J.) 425

The High Court reversed the findings of the trial court on the A
following reasonings:-

"Let us assume for the purpose of argument that this document,
Exhibit B-15, was of the latter category and the plaintiff, the
benamidar, had completely divested himself of all rights of every B
description. Even so, it cannot be held that his failure to disclose
the execution of Exhibit B-15 would amount to collateral or ex-
trinsic fraud. The utmost that can be said in favour of the defen-
dants is that a plaintiff who had no title (at the time when the suit
was filed) to the properties, has falsely asserted title and one of
the questions that would arise either expressly or by necessary C
implication is whether the plaintiff had a subsisting title to the
properties. It was up to the defendants, to plead and establish by
gathering all the necessary materials, oral and documentary, that
the plaintiff had no title to the suit properties. It is their duty to
obtain an encumbrance certificate and find out whether the plain- D
tiff had still a subsisting title at the time of the suit. The plaintiff
did not prevent the defendants, did not use any contrivance, nor
any trick nor any deceit by which the defendants were prevented
from raising proper pleas and adducing the necessary evidence.
The parties were fighting at arm's length and it is the duty of each
to traverse or question the allegations made by the other and to E
adduce all available evidence regarding the basis of the plaintiff's
claim or the defence of the defendants and the truth or falsehood
concerning the same. A party litigant cannot be indifferent, and
negligent in his duty to place the materials in support of his
contention and afterwards seek to show that the case of his op- F
ponent was false. The position would be entirely different if a party
litigant could establish that in a prior litigation his opponent
prevented him by an independent, collateral wrongful act such as
keeping his witnesses in wrongful or secret confinement, stealing
his documents to prevent him from adducing any evidence, con-
ducting his case by tricks and misrepresentation resulting in his G
misleading of the Court. Here, nothing of the kind had happened
and the contesting defendants could have easily produced a cer-
tified registration copy of Exhibit B-15 and non-suited the plaintiff;
and, it is absurd for them to take advantage of or make a point of
their own acts of omission or negligence or carelessness in the H
426 ·SUPREME COURT REPORTS [1993] SUPP. 3 S.C.R.

A· conduct of their own defence."

The High Court further held as under :-

· "From this decision it follows that except proceedings for
"'-, probate and other proceedings where a duty is cast upon a party
B litigant to disclose all. the facts, in all other cases, there is no legal
duty cast upon the plaintiff to come to Court with a true case and
prove it by;true evidence. It would cut at the root of the fundamen-
tal principle of law of finality of litigation enunciated in the maxim
'interest republicaent sit finis litium' if it should be held that a
c judgment obtained by a plaintiff in a false case, false to his
knowledge, could be set aside on the ground of fraud, in a sub-
sequent litigation."

Finally, the High Court held as under:-

D "The principle of this decision governs the instant case. At the
worst the plaintiff is guilty of fraud in having falsely alleged, at the
time when he filed the suit for partition, he had subsisting interest
in the property though he had already executed Exhibit B-15. Even
so, that would not amount to extrinsic fraud because that is a
matter which could well have been traversed and established to be
:_ E --
____ false by the appellant by adducing the necessary evidence. The
preliminary decree in the partition suit necessarily involves an
adjudication though impliedly that the plaintiff has a subsisting
interest in the property."

p The High Court, in our view, fell into patent error. The short
question before the High Court was whether in the facts and circumstances
of this case, J agannath obtained the preliminary decree by playing fraud .
on the court. The High Court, however, went haywire and made observa-
tions which are wholly perverse. We do not agree with the High Court that
"there is no legal duty cast upon the plaintiff to come to court wit.h a true
G case and prove it by true evidence". 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. 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
H often than not, process of the court is being abused. Property-grabbers,
CHENGALVARAYANAIDUv.JAGANNA1H[KULDIPSINGH,J.) 4Z7

tax- evaders, bank-loan-dodgers and other unscrupulous persons from all A
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, who's
case is based on falsehood, has no right to approach the court. He can be
summarily thrown out at any stage of the litigation.

The facts of the present case leave no manner of doubt that Jagan- B
•· nath obtained the preliminary decree by playing.fraud on the court. A fraud
is an act of deliberate deception with the design of securing something by
taking unfair advantage of another. It is a deception in order to gain by
another's loss. It is a cheating intended to get an advantage. Jagannath was
working as a clerk with Chunilal Sowcar. He purchased the property in the C
court auction on behalf of Chunilal Sowcar. He had, on his own volition,
executed the registered release deed (Exhibit B-15) in favour of Chunilal
Sowcar regarding the property in dispute. He knew that the appellants had
paid the total decretal amount to his master Chunilal Sowcar. Without
disclosing all these facts, he filed the suit for the partition of the property
on the ground that he had purchased the property on his· own behalf and D
not on behalf of Chunilal Sowcar. Non-production and even non-mention-
ing of the release deed at the trial tantamounts to playing fraud on the
court. We do not agree with the observations of the High Court ti.at the
appellants-defendants could have easily produced the certifie~ registered
copy of Exhibit B-15 and non-suited the plaintiff. A litigant, who ap- E
proaches the court, is bound to produee 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 he.guilty of playing
fraud on the court as well as on the opposite party.

We, therefore, allow the appeal, set aside the impugned judgment of F
the High Court and restore that of the trial court. The appellants shall be
entitled to their costs which we quantify as Rs. 11,000.

G.N. Appeal allowed.