w w w . L a w y e r S e r v i c e s . i n



State of Bihar & Others Ram Chandra Singh


Company & Directors' Information:- R K CHANDRA PVT LTD [Strike Off] CIN = U36911WB1989PTC046753

Company & Directors' Information:- H CHANDRA PRIVATE LIMITED [Strike Off] CIN = U65990MH1952PTC008894

Company & Directors' Information:- H C CHANDRA & CO. PVT LTD [Strike Off] CIN = U20231WB1957PTC023337

Company & Directors' Information:- CHANDRA AND COMPANY PRIVATE LIMITED [Dissolved] CIN = U74999KL1952PTC000280

Company & Directors' Information:- R. CHANDRA LIMITED [Not available for efiling] CIN = U99999MH1953PLC009175

Company & Directors' Information:- D S RAM SINGH AND CO PVT LTD [Strike Off] CIN = U99999DL1958PTC002894

    First Appeal No. 12 of 2004

    Decided On, 07 August 2020

    At, High Court of Judicature at Patna

    By, THE HONOURABLE MR. JUSTICE ADITYA KUMAR TRIVEDI

    For the Appellants: Sarvesh Kumar Singh, AAG-13, Ms. Sunita Kumar, AC to AAG-13, Anurag Saurav, AC to AAG-13. For the Respondents: Uma Shankar Verma, Shakti Suman Kumar, Advocates.



Judgment Text


1. Being aggrieved by and dissatisfied with the judgment dated 14.08.2003 and decree dated 27.08.2003 passed by the learned Sub-Judge-VIII, East Champaran at Motihari in Title Suit No.107 of 1998/174 of 2002, whereby and whereunder the suit has been decreed on contest with cost, the defendant-appellants challenged the same by way of instant appeal. It looks wise to address the parties by their original status as they stood before the learned lower court.

2. Briefly stated the case of the parties are as follows:

Respondent-plaintiff asking for the relief that on an adjudication of the facts and circumstances the order of the defendants be declared illegal, improper, arbitrary, whereby the order to stop with the work of allotted tender as well as for recovery of Rs.50,000/- so paid as an advance amount, a decree for Rs.3,00,000/- with proper interest be passed till realisation of the amount in lieu of expenses so incurred during course of purchase of construction materials as well as, expenses incurred in digging plinth, removal of accumulated water, construction up to plinth as per work order issued by the defendants in his favour, injuncting the defendants permanently from allotting the construction work of bridge over Tilawe river to somebody else, any other relief or reliefs which the plaintiff is entitled for and for that, pleaded that the plaintiff happens to be a member of All India Centre for Urban and Rural Development (NGO) having with district office at Miscot, Motihari, East Champaran who coming to know about the proposal for construction of R.C.C. bridge over Tilawe river near Fular village, advanced his candidature. After technical sanction at the end of the Executive Engineer, N.R.E., Motihari (defendant no.5) on the basis of which, the administrative sanction of Rs.4,99,500/4,99,800/- was granted by the Deputy Development Commissioner (defendant no.2) vide letter no.1584 dated 01.10.1994. Subsequently thereof, the request of the plaintiff was acceded with. Whereupon, he was appointed as an agent by the Block Development Officer, Turkauliya vide letter dated 3/4.10.1994 and as directed, the plaintiff executed an agreement on 04.10.1994 which was accepted by the Block Development Officer, Turkauliya on the same day. After consulting the Collector, issued work order and, further instructed, to start work on war footing after investing at his end as, at that very moment fund was not available. It was assured at the end of the Block Development Officer, Turkauliya that as soon as fund will be made available, payment will be made to him. On that very assurance, the plaintiff took out Rs.1,17,000/- from his Savings Account No.960 lying at Kshetriya Gramin Bank, Harsidhi as well as also took loan from his close relatives, friends and then, initiated the work. In due course of time, fund came. Whereupon, on 28.10.1994, the Block Development Officer, Turkauliya granted Rs.50,000/- as an advance. For the purpose of construction of the bridge, the plaintiff brought 300 bags of cement, 4000 cft. stone chips, 4000 cft. Sone sand, bricks worth of Rs.50,000/- and had also spent Rs.20,000/- in dewatering the area as well as Rs.15,000/- in plinth digging and Rs.40,000/- as carriage expenses.

While the work was going on, he became very much surprised on receiving an instruction on 27.11.1994 from the Block Development Officer, Turkauliya to stop the construction work in pursuance of the order dated 23.11.1994 followed with 26.11.1994 passed by the Collector, East Champaran. The aforesaid event is found duly recorded in Misc. File No.01/1994-95.

It has further been disclosed that the plaintiff had already requested the Block Development Officer, Banjariya on 19.11.1994 to visit the site in order to verify the construction work and, there should be entrustment to Assistant Engineer as well as Junior Engineer for supervising the casting work as well as to measure the work already completed. Then, it has been pleaded that the order of the Collector was passed on a complaint made by some unscrupulous persons without visiting the spot and taking a look over the construction work having been completed, abruptly directed to stop the further construction and, to deposit Rs.50,000/- paid to the plaintiff as an advance.

It has further been averred that in a meeting of 20-Point Programme held on 01.12.1994, the issue came up for discussion and, it was finally resolved that a committee consisting of local M.P., local MLA and the Collector would enquire into the matter followed with necessary order. In pursuance of resolution of the Block Development Officer, the local MLA, Ramashray Singh held physical enquiry on 02.12.1994 and submitted his report on 05.12.1995 substantiating the plea of the plaintiff over investment as well as majority of construction work having so completed.

Then thereafter, the plaintiff had also filed a representation before the Collector, East Champaran at Motihari on 31.01.1995 which was not at all considered up to March, 1995 on the pretext of Assembly Election even then, the same has not been considered.

Lastly, against the aforesaid order dated 23.11.1994 CWJC No.4205 of 1995 was filed at the end of the plaintiff which was allowed vide order dated 26.02.1996, remitting the matter to the Collector, East Champaran at Motihari for fresh consideration after setting aside the order dated 26.11.1994. It has also been averred that during the pendency of CWJC No.4205 of 1995, the Collector, East Champaran at Motihari directed Shri K.M. Ram, Executive Magistrate, Motihari to inspect and report who, accordingly held enquiry into the matter and submitted his report on 13.07.1995 justifying the claim of the plaintiff

3. After having remanded the matter to the Collector, East Champaran at Motihari by the High Court while allowing CWJC No.4205 of 1995, Misc. Case No.04 of 1996 has been drawn up and, the learned Collector proceeded therewith. It is apparent that the matter was decided vide order dated 18.05.1996 whereby and whereunder, the Collector raised propriety of technical sanction granted to the aforesaid scheme and for that, he held the Block Development Officer, Banjariya as well as the Executive Engineer responsible, conjointly. On the other hand, the plaintiff has been directed to produce all the materials before the District Rural Agency, Motihari which was instructed to purchase those items. Then, it has been stated that against the aforesaid order CWJC No.6612 of 1996 was filed at the end of the plaintiff which was dismissed vide order dated 07.01.1998 directing the plaintiff to approach any other forum available under the law for the redressal of his grievance. Accordingly, the suit has been filed with the relief as stated hereinabove after completing other legal formality. It is further evident from the order-sheet that plaintiff was exempted from filing the court fee as well as was also waived to comply with the mandatory obligation as provided under Section 80(1) of the CPC.

4. Appellants/defendants have appeared and filed conjoint written statement whereunder, apart from raising ornamental objection, status of the plaintiff has also been shaken. There happens to be strong resistance on account of non-compliance of Section 80 of the CPC. It is also evident from the written statement that some sort of clandestine atmosphere has been exposed and to justify the same, it has been averred that over Tilawe river construction of bridge was to be constructed and for that, estimate was prepared of Rs.7,68,100/- and the most surprising feature is that the Deputy Development Commissioner who was not at all competent enough to grant sanction for more than Rs.5,00,000/-, got it bifurcated in two parts and then granted administrative sanction though comprising of total estimated amount of Rs. 7,68,100/- but in two parts on the same day.

It has further been averred that the Commissioner was the competent authority to grant administrative sanction exceeding Rs.5,00,000/- and, the Deputy Development Commissioner was not at all competent to bifurcate the estimated amount and in likewise manner, for technical sanction, the Executive Engineer was competent enough only up to Rs.5,00,000/- and above that, the Superintending Engineer was the competent authority.

It has then been submitted that the story at the end of the plaintiff regarding instruction given by the Block Development Officer, Banjariya to start work on war footing after managing the financial source at his own level after getting instruction from the Collector are palpably false. It has been admitted that although advance of Rs.50,000/- was granted on 28.10.1994 by the then Block Development Officer, Banjariya, however, the nomination of plaintiff as an agent should have been at the end of the Deputy Development Commissioner which never materialised.

It has further been disclosed that on a complaint made by Dr. Faizul Alam, Ex. MP of the area on 14.11.1994, found irregularity, whereupon, ordered to stop the further construction.

It has further been stated that the aforesaid work was being done under Jawahar Rojgar Yojana whereunder, the Collector is the competent authority to check the irregularity and, is administratively competent enough to direct to stop the work.

It has further been pleaded that the plaintiff succeeded in managing the whole affairs, persuading the then Block Development Officer, Turkauliya, Banjariya and Deputy Development Commissioner who in order to favour the plaintiff illegally in order to procure illegal gain, indulged in such kind of activity contrary to the circular guiding the Jawahar Rojgar Yojana. Whereupon, the plaintiff is not at all entitled for the relief so sought for.

Then it has been submitted that the plaintiff falsely and incorrectly averred with regard to storage of construction materials at the site during course of which he incurred expenses of Rs.3,00,000/-.

It has further been pleaded that the order of the Collector is just, legal and proper and has been passed as per the circular commanding the scheme under Jawahar Rojgar Yojana. So, submitted that suit be dismissed with cost.

5. The learned lower court after analysing the pleading of the respective parties framed the following issues:

(1) Whether the plaintiff is entitled Rs. 3 lakhs with interest from October, 1994 to the defendants as alleged in the plaint?

(2) Whether defendants illegally, erroneously, improperly, arbitrarily recovering the advance money of Rs.50,000/- from the plaintiffs as alleged in the plaint?

(3) Whether the suit as framed is not maintainable?

(4) Whether the plaintiff has no cause of action to file present suit?

(5) Whether suit is bad for non-compliance of notice of Section 80 CPC?

(6) To what relief or reliefs, if any for which plaintiff is entitled ?

(7) Whether suit is hit by provisions of waiver, acquiescence and estoppel?

(8) Whether suit is hit by provisions of Contract Act?

(9) Whether suit is hit by Section 34 of Specific Relief Act?

(10) Whether suit is undervalued and court fee paid is insufficient?

(11) Whether plaintiff not deserved for exemption of court fee as alleged in W.S. para 7?

And decided the same in favour of the plaintiff and against defendants, hence this appeal.

6. Altogether 10 PWs have been examined on behalf of the plaintiff who are PW-1(Banka Singh), PW-2 (Ram Pujan Dubey), PW-3 (Basudeo Sah), PW-4 (Dina Nath Mishra), PW-5 (Ravindra Pratap Singh), PW-6 (Rajeshwar Prasad), PW-7 (Suresh Prasad), PW-8 (Ram Chandra Singh), PW-9 (Anil Kumar) and PW-10 (Om Prakash Kumar).

7. The learned Additional Advocate General No.13 while challenging the judgment impugned has urged that from very perusal of the judgment, it is evident that the learned lower court has passed the same in a mechanical manner without considering the if and buts so prevailing. In order to justify his submission, it has been submitted that under issue no.5, the plea of applicability of Section 80 of the CPC has been dealt with and, from perusal of paragraph 18, it is evident that the learned lower court had not applied its judicial mind rather based its opinion in the background of order dated 11.11.1998, whereby and whereunder compliance of Section 80 of the CPC has been stifled though, the learned lower court should have considered whether there was urgency to such extent justifying the waiver of compliance of Section 80(1) of the CPC.

8. In likewise manner, it has also been submitted that from the documents exhibited on behalf of the respondent-plaintiff itself the illegal activity is found duly exposed which, the learned lower court completely ignored. Not only this, the respondent-plaintiff while examining himself as PW-8 admitted lapses so committed the circular guiding implementation of Jawahar Rojgar Yojana and, the learned lower court while considering issue nos.1 and 2, should have properly scrutinized the relevant documents, circular in consonance with admission of PW-8, the respondent-plaintiff.

9. Furthermore, the learned lower court failed to consider that the authorities who were not competent to accord sanction (either administrative or technical) in consonance with the respondent-plaintiff created forged document in order to give illegal benefit to the respondent-plaintiff including they themselves, which has completely been given a go by, while delivering the judgment impugned by the lower court.

Consequent thereupon, the finding so recorded by the learned lower court is fit to be set aside.

10. On the other hand, learned counsel for the respondent-plaintiff while refuting the submission so advanced at the end of learned counsel for the appellant-defendants, has submitted that the finding recorded by the learned lower court is just, legal and proper. In order to justify such submission, it has been argued that the status of respondent-plaintiff as one of the member of the N.G.O. is found admitted. With regard to construction of a bridge over river Tilawe near Fulwar village an initiative taken up at the end of the appellant-defendants is also not denied. The nomination of respondent-plaintiff as an agent is also admitted. Execution of agreement is also admitted. The administrative sanction as well as technical sanction granted by the authorities concerned are also admitted. Storage of construction materials at the site as well as initiation of work though challenged, but is found duly substantiated at the end of the respondent-plaintiff corroborated by different reports having at the end of appellants/defendants and so, on account of illegal order passed by the Collector forbidding the respondent-plaintiff to proceed with the construction work furthermore causing huge loss to the respondent-plaintiff did justify the finding so arrived at, at the end of the learned lower court.

11. Then, it has been submitted that so far the non-compliance of Section 80 of the CPC is concerned, the court has been empowered to waive in case of urgency and the order dated 11.1.1998 did speak justifying the case of urgency. Therefore, waiving of compliance of section 80 of the CPC is found as per mandate of law as prescribed under Section 80(2) of the CPC.

Consequent thereupon, the finding so recorded by the learned lower court did attract interference.

12. After hearing rival submissions as well as going though the lower court record coupled with the judgment impugned, the only question now attracts for consideration is, whether the judgment and decree passed by the learned lower is sustainable?

It is apparent that just after appearance of the appellant-defendants, written statement has been filed and, from perusal of the same it is evident that much stress has been given over non- compliance of Section 80 of the CPC. For better appreciation, Section 80 of the CPC is quoted below:

"80. Notice.--(1) Save as otherwise provided in sub-section (2), no suit shall be instituted against the Government (including the Government of the State of Jammu and Kashmir) or against a public officer in respect of any act purporting to be done by such public officer in his official capacity, until the expiration of two months next after notice in writing has been delivered to, or left at the office of--

(a) in the case of a suit against the Central Government, except where it relates to a Railway, a Secretary to that Government;

(b) in the case of a suit against the Central Government where it relates to a Railway, the General Manager of that Railway;

*** (bb) in the case of a suit against the Government of the State of Jammu and Kashmir, the Chief Secretary to that Government or any other officer authorised by that Government in this behalf;

(c) in the case of a suit against any other State Government, a Secretary to that Government or the Collector of the district;

*** and, in the case of a public officer, delivered to him or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left.

(2) A suit to obtain an urgent or immediate relief against the Government (including the Government of the State of Jammu and Kashmir) or any public officer in respect of any act purporting to be done by such public officer in his official capacity, may be instituted, with the leave of the court, without serving any notice as required by sub-section (1); but the court shall not grant relief in the suit, whether interim or otherwise, except after giving to the Government or public officer, as the case may be, a reasonable opportunity of showing cause in respect of the relief prayed for in the suit:

Provided that the court shall, if it is satisfied, after hearing the parties, that no urgent or immediate relief need be granted in the suit, return the plaint for presentation to it after complying with the requirements of sub-section (1).

(3) No suit instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error or defect in the notice referred to in sub-section (1), if in such notice--

(a) the name, description and the residence of the plaintiff had been so given as to enable the appropriate authority or the public officer to identify the person serving the notice and such notice had been delivered or left at the office of the appropriate authority specified in sub-section (1), and

(b) the cause of action and the relief claimed by the plaintiff had been substantially indicated."

From perusal of Section 80 of the CPC quoted hereinabove, it is evident that in ordinary course of nature the party is required to serve a notice two months preceding the institution of the suit. However, the aforesaid requirement has been made to stride whenever there happens to be case of urgency, which the court concerned has to perceive with a cogent reason. In case, there happens to be some sort of deficiency then in that circumstance the plaint has to be returned till compliance of Sub-section (1) of Section 80 of the CPC in terms of proviso of Section 80(2) of the CPC.

In State of A.P. vs. M/s Pioneer Builders, A.P. reported in AIR 2007 SC 113 it has been held:

13. From a bare reading of sub-section (1) of Section 80, it is plain that subject to what is provided in sub-section (2) thereof, no suit can be filed against the Government or a public officer unless requisite notice under the said provision has been served on such Government or public officer, as the case may be. It is well settled that before the amendment of Section 80 the provisions of unamended Section 80 admitted of no implications and exceptions whatsoever and are express, explicit and mandatory. The section imposes a statutory and unqualified obligation upon the court and in the absence of compliance with Section 80, the suit is not maintainable. (See Bhagchand Dagadusa v. Secy. of State for India in Council [(1926-27) 54 IA 338 : AIR 1927 PC 176] ; Sawai Singhai Nirmal Chand v. Union of India [(1966) 1 SCR 986 : AIR 1966 SC 1068] and Bihari Chowdhary v. State of Bihar [(1984) 2 SCC 627] .) The service of notice under Section 80 is, thus, a condition precedent for the institution of a suit against the Government or a public officer. The legislative intent of the section is to give the Government sufficient notice of the suit, which is proposed to be filed against it so that it may reconsider the decision and decide for itself whether the claim made could be accepted or not. As observed in Bihari Chowdhary [(1984) 2 SCC 627] the object of the section is the advancement of justice and the securing of public good by avoidance of unnecessary litigation.

14. It seems that the provision did not achieve the desired results inasmuch as it is a matter of common experience that hardly any matter is settled by the Government or the public officer concerned by making use of the opportunity afforded by the said provisions. In most of the cases, notice given under Section 80 remains unanswered. In its 14th Report (reiterated in the 27th and 54th Reports), the Law Commission, while noting that the provisions of this section had worked a great hardship in a large number of cases where immediate relief by way of injunction against the Government or a public officer was necessary in the interests of justice, had recommended omission of the section. However, the Joint Committee of Parliament, to which the Amendment Bill, 1974 was referred, did not agree with the Law Commission and recommended retention of Section 80 with necessary modifications/relaxations.

15. Thus, in conformity therewith, by the Code of Civil Procedure (Amendment) Act, 1976 the existing Section 80 was renumbered as Section 80(1) and sub-sections (2) and (3) were inserted with effect from 1-2-1977. Sub-section (2) carved out an exception to the mandatory rule that no suit can be filed against the Government or a public officer unless two months' notice has been served on such Government or public officer. The provision mitigates the rigours of sub-section (1) and empowers the court to allow a person to institute a suit without serving any notice under sub-section (1) in case it finds that the suit is for the purpose of obtaining an urgent and immediate relief against the Government or a public officer. But, the court cannot grant relief under the sub-section unless a reasonable opportunity is given to the Government or public officer to show cause in respect of the relief prayed for. The proviso to the said sub-section enjoins that in case the court is of the opinion that no urgent and immediate relief should be granted, it shall return the plaint for presentation to it after complying with the requirements of sub-section (1). Sub-section (3), though not relevant for the present case, seeks to bring in the rule of substantial compliance and tends to relax the rigour of sub-section (1).

16. Thus, from a conjoint reading of sub-sections (1) and (2) of Section 80, the legislative intent is clear, namely, service of notice under sub- section (1) is imperative except where urgent and immediate relief is to be granted by the court, in which case a suit against the Government or a public officer may be instituted, but with the leave of the court. Leave of the court is a condition precedent. Such leave must precede the institution of a suit without serving notice. Even though Section 80(2) does not specify how the leave is to be sought for or given, yet the order granting leave must indicate the ground(s) pleaded and application of mind thereon. A restriction on the exercise of power by the court has been imposed, namely, the court cannot grant relief, whether interim or otherwise, except after giving the Government or a public officer a reasonable opportunity of showing cause in respect of relief prayed for in the suit.

17. Having regard to the legislative intent noticed above, it needs little emphasis that the power conferred on the court under sub-section (2) is to avoid genuine hardship and is, therefore, coupled with a duty to grant leave to institute a suit without complying with the requirements of sub-section (1) thereof, bearing in mind only the urgency of the relief prayed for and not the merits of the case. More so, when want of notice under sub-section (1) is also made good by providing that even in urgent matters relief under this provision shall not be granted without giving a reasonable opportunity to the Government or a public officer to show cause in respect of the relief prayed for. The provision also mandates that if the court is of the opinion that no urgent or immediate relief deserves to be granted it should return the plaint for presentation after complying with the requirements contemplated in sub-section (1)."

In the background of aforesaid principles laid down by the Apex Court now the order dated 11.11.1998 has to be gone through wherefrom it is evident that no reason has been assigned while accepting the prayer of the respondent-plaintiff on the score of waiving of compliance of Sub-section (1) of Section 80 of the CPC, nor from the record much less pleadings the plea is found justified.

13. Before coming to factual aspect a glance over Jawahar Rojgar Yojana should be given though, in specific words it has not been pleaded but subsequently parties stalled thereon.

Under the directive principles of the State more particularly under the guise of Article 41 of the Constitution casts an obligation upon the State to acknowledge the right to work more particularly relating to the citizens living under poverty line for their livelihood. Its identification at a initial stage was under Rural Man Power (RMP)-1960-61,Crash Scheme For Rural Employment (CSRE)-1971-72, Pilot Intensive Rural Employment Programme (PIREP)-1972, Small Farmers Development Agency (SFDA), Marginal Farmers and Agricultural Labour Scheme (MFALS).

Then its colour was changed and in the year 1977 it was reproduced as Food for Work Programme (FWP). In 1980, it was again streamlined under National Rural Employment Programme (NREP), and then to Rural Landless Employment Guarantee Programme (RLEGP) and then in the year 1993 it was Jawahar Rojgar Yojana (JRY) and then Employment Assurance Scheme (EAS). Then Employment Assurance Scheme and Jawahar Rojgar Yojana have been merged as Jawahar Grameen Samridhi Yojana (JGSY)-1999-2000. This programme has been allowed to merge with Sampoorn Grameen Rojgar Yojana (SGRY)-2001-02 and then National Food for Work Programme (NFWP). Lastly, it has been given legal identify by way of introducing Mahatma Gandhi National Employment Guarantee Act, 2005 which is presently commanding the horizon.

From the circulars relating to Jawahar Rojgar Yojana certain rules are to be incorporated guiding the sphere:

“LANGUAGE”

From perusal of relevant circulars as referred to hereinabove, it is abundantly clear that the scheme has to be identified by the Panchayat (rule 10). There happens to be no evidence on record on that very score and in likewise manner the selection of an agent is to be by the Executive Committee [(rule 8.1] as well as Rule 14.2 and so, identification of respondent-plaintiff as an agent should have been accordingly exercised.

From Exhibits 2, the order dated 3.10.1994/04.10.1994 (2nd paragraph) it is evident that there was no selection at the end of the Executive Committee rather a petition was filed by the respondent-plaintiff before the Block Development Officer, Turkauliya who nominated him and granted sanction for executing an agreement. In likewise manner, the estimate of the construction of bridge has been shown at Rs.10,00,000/-, it is further evident from the evidence of PW-8 as well as rule 11 that Executive Engineer was competent only to grant technical sanction relating to estimate extending up to 5 lacs rupees and in likewise manner the Deputy Development Commissioner, the administrative sanctioning authority to be competent enough to grant administrative sanction up to 5 lacs rupees. Exceeding the amount, identify the superior officials. That means to say, the technical sanction was to be given by the Superintending Engineer while the administrative sanction by the Commissioner. There happens to be no provision under the circular of Jawahar Rojgar Yojana whereunder estimate could be bifurcated in order to facilitate the junior official to grant technical sanction as well as administrative sanction. That means to say, the activities have been taken out in utter violation of circular, which is found corroborated from Exhibit 4, 4/1.

From the evidence of PW-8, it is apparent that after bifurcating the estimate, whereby the estimate has been reduced less than 5 lacs, facilitating the Executive Engineer to gran technical sanction and in likewise manner, the Deputy Development Commissioner to grant administrative sanction as is evident from Exhibits 3/1, 1/6, 1/7.

14. From the evidence having been adduced on behalf of respondent/plaintiff coupled with pleading, it is crystal clear that neither there happens to be pleading on the score of nomination as an agent by the Executive Committee of the Panchayat nor, competency of Deputy Development Commissioner to bifurcate the estimate. In likewise manner no document/pleading is there to substantiate the scheme being selected by the Panchayat. That means to say, the nomination of the respondent-plaintiff has been made in contravention of the circular in clandestine manner. The scheme was not approved by the Panchayat, even in worse case, the estimate was for more than 5 lacs, no authority was entrusted for its bifurcation but the same was done and the Deputy Development Commissioner who ought not to be administrative sanctioning authority by such illegal activities resumed the power to grant sanction. The respondent-plaintiff may say that he was not at all concerned with the affair settled departmentally but, his nomination, contrary to the rule speaks otherwise and further activities speak collusiveness amongst all and, during course thereof the authorities acted dishonestly by preparing the document in order to have illegal gain.

15. In Satluj Jal Vidyut Nigam vs. Raj Kumar Rajinder Singh reported in (2019)14 SCC 449, it has been held:

"65. The question in the instant case is as to whether an incumbent can be permitted to play blatant fraud time and again and court has to be silent spectator under the guise of label of the various legal proceedings at different stages by taking different untenable stands whether compensation can be claimed several times as done in the instant case and its effect. Before the land acquisition had been commenced in 1987, the land more than 1000 bighas had been declared a surplus in ceiling case and compensation collected, which indeed (quaere included) disputed land at Jhakari, it would be a perpetuating fraud in case such a person is permitted to claim compensation for same very land. Fraud vitiates the solemn proceedings; such plea can be set up even in collateral proceedings. The label on the petition is not much material and this Court has already permitted the plea of fraud to be raised. Moreover, the appeal arising out of 72 awards is still pending in the High Court in which Reference Court has declined compensation on the aforesaid ground.

*** **** ****

68. Fraud vitiates every solemn proceeding and no right can be claimed by a fraudster on the ground of technicalities. On behalf of the appellants, reliance has been placed on the definition of "fraud" as defined in Black's Law Dictionary, which is as under:

"Fraud: (1) A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment. Fraud is usually a tort, but in some cases (esp. when the conduct is wilful) it may be a crime. ... (2) A misrepresentation made recklessly without belief in its truth to induce another person to act. (3) A tort arising from a knowing misrepresentation, concealment of material fact, or reckless misrepresentation made to induce another to act to his or her detriment. (4) Unconscionable dealing; esp., in contract law, the unconscientious use of the power arising out of the parties' relative positions and resulting in an unconscionable bargain."

69. Halsbury's Laws of England has defined "fraud" as follows:

"Whenever a person makes a false statement which he does not actually and honestly believe to be true, for purpose of civil liability, the statement is as fraudulent as if he had stated that which he did know to be true, or know or believed to be false. Proof of absence of actual and honest belief is all that is necessary to satisfy the requirement of the law, whether the representation has been made recklessly or deliberately, indifference or recklessness on the part of the representor as to the truth or falsity of the representation affords merely an instance of absence of such a belief.

"70. In Kerr on the Law of Fraud and Mistake, "fraud" has been defined thus:

"It is not easy to give a definition of what constitutes fraud in the extensive significance in which that term is understood by Civil Courts of Justice. The courts have always avoided hampering themselves by defining or laying down as a general proposition what shall be held to constitute fraud. Fraud is infinite in variety... Courts have always declined to define it, ... reserving to themselves the liberty to deal with it under whatever form it may present itself. Fraud ... may be said to include property (sic properly) all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue or unconscientious advantage is taken of another. All surprise, trick, cunning, dissembling and other unfair way that is used to cheat anyone is considered as fraud. Fraud in all cases implies a wilful act on the part of anyone, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to."

71. In Ram Chandra Singh v. Savitri Devi [Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319] , it was observed that fraud vitiates every solemn act. Fraud and justice never dwell together and it cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. This Court observed as under: (SCC pp. 327-29, paras 15-18, 23 & 25) "15. Commission of fraud on court and suppression of material facts are the core issues involved in these matters. Fraud, as is well known, vitiates every solemn act. Fraud and justice never dwell together.

16. Fraud is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by word or letter.

17. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud.

18. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad.

23. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous.

25. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata."

(emphasis supplied)

72. In Madhukar Sadbha Shivarkar v. State of Maharashtra [Madhukar Sadbha Shivarkar v. State of Maharashtra, (2015) 6 SCC 557 : (2015) 3 SCC (Civ) 368 : (2015) 3 SCC (Cri) 239] , this Court observed that fraud had been played by showing the records and the orders obtained unlawfully by the declarant, would be a nullity in the eye of the law though such orders have attained finality. Following observations were made: (SCC pp. 569-70, para 27) "27. The said order is passed by the State Government only to enquire into the landholding records with a view to find out as to whether original land revenue records have been destroyed and fabricated to substantiate their unjustifiable claim by playing fraud upon the Tahsildar and appellate authorities to obtain the orders unlawfully in their favour by showing that there is no surplus land with the Company and its shareholders as the valid sub-leases are made and they are accepted by them in the proceedings under Section 21 of the Act, on the basis of the alleged false declarations filed by the shareholders and sub-lessees under Section 6 of the Act. The plea urged on behalf of the State Government and the de facto complainant owners, at whose instance the orders are passed by the State Government on the alleged ground of fraud played by the declarants upon the Tahsildar and appellate authorities to get the illegal orders obtained by them to come out from the clutches of the land ceiling provisions of the Act by creating the revenue records, which is the fraudulent act on their part which unravels everything and therefore, the question of limitation under the provisions to exercise power by the State Government does not arise at all. For this purpose, the Deputy Commissioner of Pune Division was appointed as the enquiry officer to hold such an enquiry to enquire into the matter and submit his report for consideration of the Government to take further action in the matter. The legal contentions urged by Mr Naphade, in justification of the impugned judgment and order prima facie at this stage, we are satisfied that the allegation of fraud in relation to getting the landholdings of the villages referred to supra by the declarants on the alleged ground of destroying original revenue records and fabricating revenue records to show that there are 384 sub-leases of the land involved in the proceedings to retain the surplus land illegally as alleged, to the extent of more than 3000 acres of land and the orders are obtained unlawfully by the declarants in the land ceiling limits will be nullity in the eye of the law though such orders have attained finality; if it is found in the enquiry by the enquiry officer that they are tainted with fraud, the same can be interfered with by the State Government and its officers to pass appropriate orders. The landowners are also aggrieved parties to agitate their rights to get the orders which are obtained by the declarants as they are vitiated in law on account of nullity is the tenable submission and the same is well founded and therefore, we accept the submission to justify the impugned judgment and order Babu Maruti Dukare v. State of Maharashtra [Babu Maruti Dukare v. State of Maharashtra, 2006 SCC OnLine Bom 1268 : (2007) 2 AIR Bom R 361] of the Division Bench of the High Court."

(emphasis supplied)

73. In Jai Narain Parasrampuria v. Pushpa Devi Saraf [Jai Narain Parasrampuria v. Pushpa Devi Saraf, (2006) 7 SCC 756] , this Court observed that fraud vitiates every solemn act. Any order or decree obtained by practising fraud is a nullity. This Court held as under:

"55. It is now well settled that fraud vitiates all solemn act. Any order or decree obtained by practising fraud is a nullity. [See (1) Ram Chandra Singh v. Savitri Devi [Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319] followed in (2) Kendriya Vidyalaya Sangathan v. Girdharilal Yadav [Kendriya Vidyalaya Sangathan v. Girdharilal Yadav, (2004) 6 SCC 325 : 2005 SCC (L&S) 785] ; (3) State of A.P. v. T. Suryachandra Rao [State of A.P. v. T. Suryachandra Rao, (2005) 6 SCC 149] ; (4) Ishwar Dutt v. LAO [Ishwar Dutt v. LAO, (2005) 7 SCC 190] ; (5) Lillykutty v. Scrutiny Committee, SC & ST [Lillykutty v. Scrutiny Committee, SC & ST, (2005) 8 SCC 283] ; (6) Maharashtra SEB v. Suresh Raghunath Bhokare [Maharashtra SEB v. Suresh Raghunath Bhokare, (2005) 10 SCC 465 : 2005 SCC (L&S) 765] ; (7) Satya v. Teja Singh [Satya v. Teja Singh, (1975) 1 SCC 120 : 1975 SCC (Cri) 50] ; (8) Mahboob Sahab v. Syed Ismail [Mahboob Sahab v. Syed Ismail, (1995) 3 SCC 693] ; and (9) Asharfi Lal v. Koili [Asharfi Lal v. Koili, (1995) 4 SCC 163] .]"

(emphasis supplied)

74. In State of A.P. v. T. Suryachandra Rao [State of A.P. v. T. Suryachandra Rao, (2005) 6 SCC 149] , it was observed that where the land which was offered for surrender had already been acquired by the State and the same had vested in it. It was held that merely because an enquiry was made, the Tribunal was not divested of the power to correct the error when the respondent had clearly committed a fraud. Following observations were made: (SCC pp. 152-53 & 155, paras 7-10 & 13-16) "7. The order of the High Court is clearly erroneous. There is no dispute that the land which was offered for surrender by the respondent had already been acquired by the State and the same had vested in it. This was clearly a case of fraud. Merely because an enquiry was made, the Tribunal was not divested of the power to correct the error when the respondent had clearly committed a fraud.

8. By "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from ill-will towards the other is immaterial. The expression "fraud" involves two elements, deceit and injury to the person deceived. Injury is something other than economic loss, that is, deprivation of property, whether movable or immovable or of money and it will include any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non-economic or non-pecuniary loss. A benefit or advantage to the deceiver, will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied. [See Vimla v. Delhi Admn. [Vimla v. Delhi Admn., 1963 Supp (2) SCR 585 : AIR 1963 SC 1572 : (1963) 2 Cri LJ 434] and Indian Bank v. Satyam Fibres (India) (P) Ltd. [Indian Bank v. Satyam Fibres (India) (P) Ltd., (1996) 5 SCC 550] ]

9. 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. (See S.P. Chengalvaraya Naidu v. Jagannath [S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1] .)

10. "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury enures therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is an anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. (See Ram Chandra Singh v. Savitri Devi [Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319] .) ***

13. This aspect of the matter has been considered recently by this Court in Roshan Deen v. Preeti Lal [Roshan Deen v. Preeti Lal, (2002) 1 SCC 100 : 2002 SCC (L&S) 97] , Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education [Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education, (2003) 8 SCC 311] , Ram Chandra Singh v. Savitri Devi [Ram Chandra Singh v. Savitri Devi, (2003) 8 SCC 319] and Ashok Leyland Ltd. v. State of T.N. [Ashok Leyland Ltd. v. State of T.N., (2004) 3 SCC 1]

14. Suppression of a material document would also amount to a fraud on the court. (See Gowrishankar v. Joshi Amba Shankar Family Trust [Gowrishankar v. Joshi Amba Shankar Family Trust, (1996) 3 SCC 310] and S.P. Chengalvaraya Naidu v. Jagannath [S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1] .)

15. "Fraud" is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. Although negligence is not fraud but it can be evidence of fraud; as observed in Ram Preeti Yadav [Ram Preeti Yadav v. U.P. Board of High School and Intermediate Education, (2003) 8 SCC 311] .

16. In Lazarus Estates Ltd. v. Beasley [Lazarus Estates Ltd. v. Beasley, (1956) 1 QB 702 : (1956) 2 WLR 502 : (1956) 1 All ER 341 (CA)] , Lord Denning observed at QB pp. 712 and 713: (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. Fraud unravels everything.' In the same judgment, Lord Parker, L.J. observed that fraud 'vitiates all transactions known to the law of however high a degree of solemnity' (All ER p. 351 E- F)."

(emphasis supplied)

75. In A.V. Papayya Sastry v. State of A.P. [A.V. Papayya Sastry v. State of A.P., (2007) 4 SCC 221] , this Court as to the effect of fraud on the judgment or order observed thus: (SCC pp. 231 & 236-37, paras 21-22 & 38-39) "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 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.

***

38. The matter can be looked at from a different angle as well. Suppose, a case is decided by a competent court of law after hearing the parties and an order is passed in favour of the plaintiff applicant which is upheld by all the courts including the final court. Let us also think of a case where this Court does not dismiss special leave petition but after granting leave decides the appeal finally by recording reasons. Such order

Please Login To View The Full Judgment!

can truly be said to be a judgment to which Article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/authorities below, therefore, merge in the judgment of this Court and after such judgment, it is not open to any party to the judgment to approach any court or authority to review, recall or reconsider the order. 39. The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. And it has to be treated as non est by every court, superior or inferior." Supervisory jurisdiction of the court can be exercised in case of error apparent on the face of the record, abuse of process and if the issue goes to the root of the matter. 76. In S.P. Chengalvaraya Naidu v. Jagannath [S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1] , this Court noted that the issue of fraud goes to the root of the matter and it exercised powers under Article 136 to cure the defect. The Court observed: (SCC p. 5, paras 5-6) "5. The High Court [Jagannadh v. Perumal Naidu, 1967 SCC OnLine Mad 103 : (1969) 82 LW 167] , in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations 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 with a true 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 often than not, the 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. 6. The facts of the present case leave no manner of doubt that Jagannath 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 court auction on behalf of Chunilal Sowcar. He had, on his own volition, executed the registered release deed (Ext. 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 not on behalf of Chunilal Sowcar. Non-production and even non-mentioning of the release deed at the trial is tantamount to playing fraud on the court. We do not agree with the observations of the High Court that the appellant-defendants could have easily produced the certified registered copy of Ext. B-15 and non-suited the plaintiff. 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." From the order dated 07.01.1998 passed by the High Court of Judicature at Patna in CWJC No.6612 of 1996 (Exhibit 2/2) it is evident that as the learned counsel for the petitioner did not want to press the aforesaid writ petition, whereupon was dismissed. However, it was opined during course thereof "Dismissal of this writ petition will, however, not preclude the petitioner from approaching any other forum available under law for redressal of his grievance". Civil court has not properly been identified. It happens to be administrative forum and so, the superior official than that of Collector would have been appellate authority, more particularly, the Commissioner, though not identified under the circular of Jawahar Rojgar Yojana but the "Practice and Procedure Manual" could come in rescue. 16. Consequent thereupon, the judgment impugned suffers from inherent defects and is accordingly set aside. 17. The appeal is allowed. However, in the facts and circumstances of the case there shall be no order as to cost.
O R