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2013 DIGILAW 1325 (PNJ)

Ludhiana Motor Finance Co. Pvt. Limited, Ludhiana v. State Transport Appellate Tribunal, Punjab

2013-10-01

AJAY K.MITTAL, JASPAL SINGH

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JUDGMENT Ajay Kumar Mittal, J. 1. The present appeal has been filed by the appellant against the judgment dated 16.5.2013 passed by learned Single Judge whereby the writ petition filed by it has been dismissed. 2. Briefly, the facts necessary for adjudication of the controversy involved, as available on record, may be noticed. The appellant is a private limited company duly incorporated under the provisions of the Companies Act, 1956 with its registered office at Ludhiana. As Respondent No.3 – Hoshiarpur Express Transport Co. Limited failed to discharge its liability to pay an amount of Rs. 1.75 lacs to the appellant, the matter was referred for arbitration in which it was decided that stage carriage permits in respect of buses with registration Mark PAB 881, PUH 2789 and PUH 2251 be transferred in favour of the appellant. In pursuance of the award of the arbitrator, the civil court passed decree in favour of the appellant vide judgment dated 10.11.1990. Thereafter, the appellant and the management of respondent No.3 filed a joint application before the State Transport Commissioner, Respondent No.2 who allowed the same and the above mentioned permits were transferred in favour of the appellant. As the buses with the above registration marks were not motorable, the appellant replaced the said buses at its own expense and the permits were renewed in respect of the new vehicles purchased by the appellant. On account of dispute between the management of Respondent No.3 and the appellant, a civil suit No.120 of 16.8.1994 was filed by respondent No.3 challenging the award as well as the judgment and decree dated 10.11.1990 whereby the award was made rule of the court. The said suit was decreed by Civil Judge (JD) Ludhiana vide judgment dated 12.10.2001 and it was held that the order and decree dated 10.11.1990 was obtained by fraud by the appellant and direction was given to the appellant to hand over permits to Respondent No.3. Aggrieved by the judgment of the trial court dated 12.10.2001, Shri Daljit Singh Latti filed an appeal in the lower appellate court which was dismissed vide judgment and decree dated 12.5.2004. RSA No.3076 of 2004 was filed by the appellant in this court which was dismissed on 4.3.2005. Thereafter, respondent No.3 filed an execution application with the prayer that warrants of possession of the route permits be granted to it. RSA No.3076 of 2004 was filed by the appellant in this court which was dismissed on 4.3.2005. Thereafter, respondent No.3 filed an execution application with the prayer that warrants of possession of the route permits be granted to it. The appellant filed objections which were allowed vide order dated 30.5.2009 and it was held that the decree was inexecutable. Respondent No.3 challenged the said order by way of revision petition bearing C.R. No.5074 of 2009 in this Court which was disposed of vide order dated 6.5.2010. The order passed by the executing court was set aside and respondent Nos.1 and 2 were directed to return route permits in question to the appellant. The appellant handed over the said permits to respondent No.3. Respondent No.3 filed an application before respondent No.2 for transfer of stage carriage permits. The said application was allowed by respondent No.2 vide order dated 22.7.2011 against which the petitioner filed a revision petition before respondent No.1. Vide order dated 29.11.2012, the said petition was dismissed by respondent No.1. Aggrieved by the order, the petitioner filed writ petition in this Court. Vide order dated 16.5.2013 impugned herein, the learned Single Judge dismissed the writ petition. Hence the present Letters Patent Appeal. 3. Learned counsel for the appellant submitted that permit without a vehicle cannot be ordered to be transferred and the learned Single Judge had failed to appreciate the aforesaid contention of the appellant and thus, the order dated 16.5.2013 deserves to be set aside. To support his argument, learned counsel referred to Section 82(1) of the Motor Vehicles Act, 1988 (in short, “the Act”) besides Sections 2(31), 2(40), 2(47), 70 and 72 of the Act. Reference was also made to Rule 81 of the Punjab Motor Vehicle Rules, 1989 (in short, “the Rules”). 4. After hearing learned counsel for the parties, we do not find any merit in the appeal. 5. It was not disputed that the appellant was granted the permit in view of the civil court decree dated 10.11.1990 which was passed in its favour. Respondent No.3 had challenged the judgment and decree by filing civil suit No.120 dated 16.8.1994 which was allowed and civil appeal filed against the same was also dismissed. The judgment and decree of the trial court as affirmed by the learned lower appellate court was upheld by this Court in RSA No.3076 of 2004 vide judgment dated 4.3.2005. Respondent No.3 had challenged the judgment and decree by filing civil suit No.120 dated 16.8.1994 which was allowed and civil appeal filed against the same was also dismissed. The judgment and decree of the trial court as affirmed by the learned lower appellate court was upheld by this Court in RSA No.3076 of 2004 vide judgment dated 4.3.2005. Further, in pursuance to the execution proceedings, Civil Revision which travelled to this Court being C.R. No.5074 of 2009 was decided on 6.5.2010. Learned counsel for respondent Nos. 1 and 2 had made the statement as under : “Learned counsel for respondents No.1 and 2 states that respondents No.1 and 2 undertake to return route permits in question as per judgment and decree dated 12.10.2001, Annexure P.1 to the petitioner. In view of said undertaking, learned counsel for the petitioner states that the revision petition be disposed of accordingly. In view of the aforesaid, impugned order Annexure P.12 passed by the executing court is set aside and respondents No.1 and 2 are directed to return route permits in question to the petitioner in the executing court on 20.5.2010. Parties shall appear before the executing court on the next date fixed for doing needful. Revision petition stands disposed of accordingly.” According to the aforesaid statement, learned counsel for respondents No.1 and 2 had agreed to return the route permits to the appellant in the executing court on 20.5.2010. During the civil proceedings between the appellant and Respondent No.3, it was concluded that the appellant had obtained the permit by playing fraud. It is well settled that fraud vitiates everything and in this situation the order would be nullity in the eyes of law. A Division Bench of this Court in Natha Singh v. The Financial Commissioner, Haryana and others, 1982 Current Law Journal 526 had held that no length of period that may elapse would improve the situation where fraud is the foundation of any right as fraud vitiates everything from the very inception. Similar view had been taken in Jasbir Singh v. Financial Commissioner (Revenue), Punjab, Chandigarh and others, 2012(2) PLR 319. The effect of the same would be that the position as existing prior to the passing of the collusive decree dated 10.11.1990 which was held to have been obtained by fraud would have to be restored. Similar view had been taken in Jasbir Singh v. Financial Commissioner (Revenue), Punjab, Chandigarh and others, 2012(2) PLR 319. The effect of the same would be that the position as existing prior to the passing of the collusive decree dated 10.11.1990 which was held to have been obtained by fraud would have to be restored. The authorities and the learned Single Judge had only acted upon that and dismissed the petition filed by the appellant. 6. The learned Single Judge while dealing with the argument as has been raised before us that permit can only be transferred if there was a stage carriage vehicle, had repelled the same with the following observations : “The contention of the counsel for the petitioner that the permit can only be transferred if there is a stage carriage vehicle cannot ipso-facto be accepted as the permit is granted to the permit holder, but obviously with an authorisation, authorising the use of a motor vehicle as a transport vehicle. This is apparent from the definition of “permit” as provided in Section 2(31) of the Act. It is not in dispute that respondent No.3 has large number of stage carriage vehicles and, therefore, after the transfer of the permits in the name of the permit holder, i.e., respondent No.3, can get the number of the stage carriage vehicle, authorising the use of the motor vehicle as a transport vehicle. If the assertion of the counsel for the petitioner is accepted, it would amount to another fraud upon the Court this time. It also started on the basis of a fraud committed upon respondent No.3 by the petitioner by getting five stage carriage permits along with its Buses transferred on 23.3.1991. As per orders passed by the State Transport Commissioner, Punjab, which had given effect to the judgment and decree dated 10.11.1990 passed by the Sub Judge Ist Class, Ludhiana in an arbitration case, judgment and decree has been set-aside as the same was based upon fraud and misrepresentation committed by the petitioner in connivance with the previous Managing Director of respondent No.3. A benefit, which has been taken by a party on the basis of fraud, that too through a Court cannot be a source for defeating the subsequent judgment, holding the same to be a fraud and denying the rightful owner of the benefit and fruit of the order. A benefit, which has been taken by a party on the basis of fraud, that too through a Court cannot be a source for defeating the subsequent judgment, holding the same to be a fraud and denying the rightful owner of the benefit and fruit of the order. In S.P. Changalvaraya Naidu (dead) by L.Rs. Versus Jagannath (dead) by L.Rs., 1994(1) SCC 1 , the Hon'ble Supreme Court held that a judgment or decree obtained by playing fraud on the court is a nullity and nonest 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 and can be challenged in any Court even in collateral proceedings. A person, whose case is based on falsehood, has no right to approach the court and cannot be granted any benefit and his claim has to be thrown out summarily at any stage of the litigation. The effect thereof is that the advantage gained by such a party through a fraud played upon the court has to be nullified and the rightful person should be held entitled to his claim along with consequential benefits.” 7. In view of the above, we do not find any infirmity in the approach of the learned Single Judge and finding no merit in the appeal, the same is dismissed.