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1958 DIGILAW 54 (KER)

Taj Glass Works Ltd. v. Ushar Trading Co.

1958-03-10

VARADARAJA IYENGAR

body1958
Judgment :- 1. This revision is by the defendants, whose petition to set aside the compromise decree in the case on the ground of fraud, has been dismissed by the court below. 2. The defendants are The Taj Glass Works Ltd, of Hyderabad. They had contracted for sale of their glassware with the plaintiffs, who are a firm of traders at Ernakulam. On the allegation that some agency commission and damages etc., had accrued due, the plaintiffs filed this suit on 7-5-1954 for realisation from the defendants, of a sum of Rs. 2,052 -12 As. Along with the suit, the plaintiffs, applied for and obtained attachment before judgment of valuable glassware of the defendants, lying in the goods shed of the Ernakulam Railway Station and they were brought to court on 21-6-1954. According to the defendants, they had, on receipt of the summons deputed their employee, Narayanaswamy to engage local counsel on their behalf for contesting the case and entrusted to him for the purpose, a vakalath form signed by their managing director S. R. Kimtee on 30-4954, with the counsel's name left blank. Instead of carrying out his instructions, however, he entered into, a compromise arrangement with the plaintiffs, whereby they were to take all the glassware attached and brought into court apparently in satisfaction of the plaint claim, & so got the case disposed off as settled between the parties on the day fixed for the defendants' appearance, viz., 1-8-1954. The compromise petition was signed by, Narayanaswamy as if he could and did represent the defendants and was got attested by Mr. V. Bhaskara Menon, Advocate, engaged under the vakalath form aforesaid. 3. It would appear that on 5-8-1954 before the compromise petition was filed into court Narayanaswamy suggested by letter that the suit and attachment matter had better be compromised with the plaintiffs but the defendants by telegram and confirmation letter had turned down the suggestion. Vide Exts. A to C. And on 13-8-1954 after the compromise petition had been filed and accepted by court, Narayanaswamy went to the extent of informing the defendants that the law firm of Masker and Jacob' had been engaged to contest the case and the hearing stood adjourned to 23-9-1954. Vide Ext. G letter. Vide Exts. A to C. And on 13-8-1954 after the compromise petition had been filed and accepted by court, Narayanaswamy went to the extent of informing the defendants that the law firm of Masker and Jacob' had been engaged to contest the case and the hearing stood adjourned to 23-9-1954. Vide Ext. G letter. Not satisfied with the progress of the case, the defendants sought to get into touch with the law firm of Bhasker and Jacob' direct but their communication returned undelivered saying there was no such firm. Vide Ext. El postal cover. It was thereafter, on 11-11-1954, that the defendants came to the court, with prayer to set aside the judgment and decree in the case based on the compromise petition of -11-8-1954 and they relied upon S.151 and 0.47, R.1 of C. P. C The defendants' managing director S. R. Kimtee also gave evidence as Pw.1 in support of the petition and swore during the course of his deposition that Narayanaswamy their employee had acted without the defendants' authority in signing the compromise petition and had been already discharged from service for the fraud he had played in this and other matters. 4. The plaintiffs objected to the defendants' petition on the ground that it was not maintainable in law and also unfounded on fact. They examined a partner of their firm as Dw.1 and also filed a stamped receipt Ext. II dated 12-8-1954 under which Narayanaswamy acknowledged receipt of a sum of Rs. 799-14-6 "in complete settlement of the suit", 5. The court below held that this was a case where relief was clearly available to the defendants against their agent for misconduct and neglect of duty. So S.151 could not apply. And 0.47, R.1 could not also apply because the grounds thereunder were not available in the case. In the result it dismissed the petition. Hence this revision and learned counsel says that the court below had omitted to notice that here was a fraud not only on the party but also oh the court and the case was accordingly, a fit one for the exercise of the revisional jurisdiction of this Court. The principles applicable to cases of this type are now well-settled. The practice in the English Courts is described in Daniel on Chancery Practice, 7th Edition, Vol. The principles applicable to cases of this type are now well-settled. The practice in the English Courts is described in Daniel on Chancery Practice, 7th Edition, Vol. I p. 685: "After a judgment has been passed and entered, though taken by consent and under a mistake, it cannot be set aside by a motion in the action unless either there has been a clerical mistake or an error arising from an accidental slip or omission or the judgment as drawn up does not correctly state what the court actually decided and intended to decide: In any other caste in order to set aside such judgment a fresh action is necessary. In such an action the court has jurisdiction to set the judgment aside on the ground of mistake on any other ground on which an agreement in the terms of the order would be set aside but not on any other ground. So if a judgment has been obtained by fraud, relief may be had against it by original action". In the Indian High Courts however a distinction has been drawn between cases where a fraud is practised upon a party and cases where a fraud is practised upon the court. As explained by Das, J. in Dadho Saran v. Anant Rai, A. I. R.1923 Pat. 483.. "There is a long list of cases of the Calcutta High Court, of the Bombay High Court and of the Madras High Court in which it has been broadly laid down that a Court has inherent power to correct its own proceedings when it is satisfied that in passing a particular order it was misled by one of the parties ..... A distinction has been drawn in the case of the Indian Courts between a fraud practised upon a party and a fraud practised upon the court. A distinction has been drawn in the case of the Indian Courts between a fraud practised upon a party and a fraud practised upon the court. It has been laid down that where the question is whether there was a consent in fact, there is power in the Court to investigate the matter in a properly constituted application and to set aside the decree if it is satisfied that a party never in fact consented to it but that the court was induced to pass the decree on the fraudulent representation made to it that the party had consented to it, but that where there is consent in fact, that is to say, where the parties have filed a compromise petition and they admit that they have filed it but one of the parties alleges that his consent was procured by fraud, the Court cannot investigate the matter either in review or in the exercise of its inherent power, and that the only remedy of the party is to institute a suit to set aside the decree on the ground of fraud. In other words, the factum of the consent can be investigated in summary proceedings, but the reality of the consent cannot be so investigated" In that case the compromise actually filed in court was not the compromise which the plaintiff had actually signed. And the court had been persuaded to sign a decree to which therefor the plaintiff had never consented and upon the representation made to the court that the plaintiff had consented to it. The Court found that there was a gross and deliberate fraud practised not only upon the plaintiff but also upon the court and the court had accordingly inherent jurisdiction to set aside the decree. This case was followed by the Full Bench decision of the Travancore High Court in Kali v. Varkey, 29 T. L. J. 1057. In Ummal Kannu v. Amirthan.1952 K. L. T. 199 = I. L. R.1951 T-C 753 the suit had been decreed on the basis of a compromise petition which purported to have been signed by the plaintiffs and the defendants. The defendant filed the petition to set aside the decree alleging that she had not signed the compromise petition. The lower court dismissed the petition on the ground that it was not maintainable. The defendant filed the petition to set aside the decree alleging that she had not signed the compromise petition. The lower court dismissed the petition on the ground that it was not maintainable. It was held following the decision in 29 T.L.J. 1057 cited above, that the view taken by the lower court was not correct because it failed to take into consideration the distinction as to fraud oh court and the petition of the defendant was accordingly remanded for disposal on the merits. And it is useful also to notice that the fraud on court in cases of this type, need not necessarily be practised by the other party, though ordinarily it happens to be so. 6. On the facts in this case there can be absolutely no doubt that the court was persuaded to accept the compromise petition in the belief that the defendant-company was a party thereto. But that was in fact not so because, for one thing Narayanaswamy was not their secretary or any director or other principal officer who could depose to the facts of the case within the meaning of 0.29, R.1 of the Civil Procedure Code, nor again was he a person specially authorised to sign a pleading on their behalf as required by 0.6, R.14 C. P. C. See Calico Printer's Association v. Karim & Boos. A.I.R. 1930 Bom. 566. The attestation of Narayanaswamy's signature by advocate Mr. Bhaskara Menon could not also be held against the defendant-company. Apparently he himself had been misled. This was a case therefore where the defendant-company could say that fraud had been perpetrated not alone on themselves but on the court as well, and claim accordingly that the decision of the court based on the assumption of their consent be re-called and this, notwithstanding that the plaintiffs may be innocent in the whole matter. The court below indeed misled itself in thinking that the facts in this case could be assimilated to those in Haji Lal v. Nawal Singh, 15 All. L. J. 413 and so denying relief. In that case an agent on behalf of the respondent had been engaged for the purpose of instructing counsel and seeing that the appeal has been properly prosecuted After a time the agent withdrew his instructions to the counsel who was unable to appear with the consequence that the appeal was decreed ex-parte. L. J. 413 and so denying relief. In that case an agent on behalf of the respondent had been engaged for the purpose of instructing counsel and seeing that the appeal has been properly prosecuted After a time the agent withdrew his instructions to the counsel who was unable to appear with the consequence that the appeal was decreed ex-parte. Upon an application for rehearing, it was held there were no grounds therefor and the applicant should look to his agent for misconduct or neglect of duty. Certainly, the facts here are different. 7. It follows, therefore, that the petition of the defendants should have been allowed and the suit restored to file for disposal in due course of law and I order accordingly. The revision petition is thus allowed and with costs.