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2013 DIGILAW 624 (MP)

President, Nagar Panchayat Phoop v. R. B. Dubey

2013-05-09

G.D.Saxena, S.K.Gangele

body2013
ORDER Gangele, J. -- 1. This review petition has been filed by the petitioner for review of the order dated 10.2.2010 passed in Writ Petition No.1318/2009. 2. There is delay in filing the review petition, hence, the petitioner filed an application for condonation of delay (I.A. No.288/2013). 3. We have heard the matter on merits as well as on application for condonation of delay. 4. The petitioner pleaded in the application filed under section 5 of Limitation Act for condonation of delay (I.A. No.288/2013) that the respondent No.1 obtained the order dated 10.2.2010 in Writ Petition No.1318/2009 by suppressing particular facts and playing fraud with the Court and after inspection of the record, the counsel of the petitioner advised to file review petition, hence the review petition has been filed. Hence, the delay in filing the review petition be condoned. 5. We have perused the record. The petitioner in this review petition pleaded that the respondent No.1 played fraud with the Court in connivance with certain persons and a favourable reply was filed before the Court and on the basis of the reply, the Court passed the order. 6. Looking to the aforesaid facts of the case, in our opinion, delay in filing the review petition deserves to be condoned because it is well settled principle of law that fraud vitiates everything and if a fraud has been played, then the Court can take notice of the fact even at the time of execution of a decree, as held by the Hon’ble Supreme Court in the case of A.V. Papayya Sastry and others v. Government of Andhra Pradesh and others [ (2007)4 SCC 221 ]. 7. In this view of the matter, the application for condonation of delay (I.A. No.288/2013) is allowed and the delay in filing the review petition is hereby condoned. 8. The respondent No.1 filed a writ petition before this Court, which was registered as Writ Petition No.1318/2009. He pleaded in the writ petition that Nagar Panchayat Phoop, District Bhind invited tenders for construction of certain works. The respondent submitted his tender and it was accepted. The work order was issued to the respondent No.1 on 7.2.2004 and he was directed to construct the WBM roads at Nagar Panchayat Phoop at Wards No.1, 6, 7, 9, 10, 11 and 15. A contract was executed between the petitioner and respondent No.2 Nagar Panchayat of the writ petition. The respondent submitted his tender and it was accepted. The work order was issued to the respondent No.1 on 7.2.2004 and he was directed to construct the WBM roads at Nagar Panchayat Phoop at Wards No.1, 6, 7, 9, 10, 11 and 15. A contract was executed between the petitioner and respondent No.2 Nagar Panchayat of the writ petition. The respondent No.1-petitioner in writ petition completed the construction work as per the requirement and design and submitted his bills. Sub-Engineer of Nagar Panchayat inspected the site and submitted the report. Thereafter the Chief Municipal Officer and President of Nagar Panchayat also inspected the site and submitted their report, however, the amount had not been paid to the respondent No.1 contractor. 9. This Court issued notice on the writ petition on 6.4.2009. In reply to the notice, Nagar Panchayat Phoop, District Bhind (respondent No.2 in the writ petition) filed return on 1.12.2009. In support of the return, Mr. Ram Sevak Chhari, Chief Municipal Officer filed his affidavit. It was sworn on 21.11.2009. It was mentioned in the return that certain amount was already paid by the Nagar Panchayat, however, there were no fund released by the State Government, hence, the payment could not be made. A letter was sent to the petitioner on 12.2.2009 by the Chief Municipal Officer to the effect that when the funds would be released by the Government, the amount shall be paid to the petitioner. During intervening period, Nagar Panchayat paid an amount of Rs.55,92,136/- to the respondent No.1, however, an amount of Rs.39,00,719/- is still due. It is clear from the letter dated 15.5.2010 written by the CMO to the Commissioner, Urban Administration and Development Bhopal. It means that respondent No.1 claimed amount of near about 85 lacs. 10. We have perused the advertisement (Annexure P-1 in the writ petition), which was published in the newspapers. In the advertisement, amount of security has been mentioned as Rs.5,000/-. The construction cost of the work is not mentioned in the advertisement, which is dated 31.12.2003. Nagar Panchayat in the return pleaded that the respondent No.1 had not completed the construction. 10. We have perused the advertisement (Annexure P-1 in the writ petition), which was published in the newspapers. In the advertisement, amount of security has been mentioned as Rs.5,000/-. The construction cost of the work is not mentioned in the advertisement, which is dated 31.12.2003. Nagar Panchayat in the return pleaded that the respondent No.1 had not completed the construction. It is further submitted by the counsel for the petitioner that as per Madhya Pradesh Nagar Palika (Mayor in Council/President in Council Ke Kamkaj Ka Sanchalan Tatha Pradhikariyon Ke Prakriya Evam Kartavya) Municipal Council or the President were competent to sanction upto Rs.25 lacs only and there was no construction on the spot. The facts have been suppressed by the petitioner and Nagar Panchayat in the return filed before the writ Court and on the aforesaid basis, respondent No.1 obtained order from the Court with the collusion of the then Chief Municipal Officer of the Nagar Panchayat. 11. In the return filed by the Nagar Panchayat in reply to the writ petition, it is mentioned that funds were not made available by the State Government. In accordance with the Madhya Pradesh Nagar Palika (Mayor in Council/President in Council Ke Kamkaj Ka Sanchalan Tatha Pradhikariyon Ke Prakriya Evam Kartavya) Rules, 1998 the Municipal Council or the President were not competent to sanction upto Rs.25 lacs only. It is also submitted that when the advertisement was published inviting tenders, the total amount of the contract work was also not mentioned. There are allegations that there was little construction on the spot. 12. Section 17 of the Contract Act 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 ], has held as under in regard to effect or 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 Rs.5,000/-, 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. Government of Andhra Pradesh and others [ (2007)4 SCC 221 ], 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. 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 order by the first Court or by the final Court has 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 in 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 fraud 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 opression by dishonest and fraudulent litigants. 27. 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 opression by dishonest and fraudulent litigants. 27. In S.P. Chengalvaraya Naidu v. Jagannath, 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 sayt 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 say 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) : “A litigant, who approaches the Court, is bound to produce all the documents executed by him which are relevant to the litigation. 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) : “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 6) : “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. referring to Lazarus Estates and Smith v. East Elloe Rurak District 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. From the facts of the case, we are satisfied that respondent No.1 obtained a favourable order on the basis of return filed by the Nagar Panchayat which was supported with an affidavit of Chief Municipal Officer. He had not mentioned all the facts in the return to the effect that the Nagar Panchayat was not authorised to award the contract of such huge amount. It was also not mentioned in the return that what was the total approximate amount mentioned in the notice inviting tender. There was no budget available in the Nagar Panchayat. He had not mentioned all the facts in the return to the effect that the Nagar Panchayat was not authorised to award the contract of such huge amount. It was also not mentioned in the return that what was the total approximate amount mentioned in the notice inviting tender. There was no budget available in the Nagar Panchayat. In such circumstances, in our opinion, the respondent No.1 obtained the order by playing fraud with connivance with the Chief Municipal Officer of the Nagar Panchayat. Looking to the aforesaid facts of the case, in our opinion, an inquiry is necessary so the persons, who are guilty may be punished. 16. Consequently, the review petition filed by the petitioner is hereby allowed. The order dated 10.2.2010 passed in Writ Petition No.1318/2009 is hereby recalled. The writ petition is restored to its original number. The Lokayukta organization is directed to conduct an investigation in the matter. The order passed by this Court be sent to the Lokayukta and it be treated as a complaint as required to be filed before the organization in accordance with law. We request the Lokayukta Establishment to conduct the investigation as early as possible and submit its report before this Court. No order as to costs. .............