M.K. Hanjura ORDER
M.K. Hanjura, J.
1. This appeal is directed against the order dated 10th of September, 2015, passed by the learned Motor Accident Claims Tribunal, Anantnag (hereinafter referred to as the "Tribunal") in case titled "New India Assurance Company v. Ali Mohammad Dar".
2. The facts chiseled out of the appeal are that a claim petition was filed by the respondents/claimants on 9th of April, 2008 which was finally disposed of by the Tribunal on 9th of June, 2014 directing payment of compensation to the tune of Rs. 70,8000/- together with 6% interest in their favour from the date of the institution of petition. At the time of filing of the claim petition, the appellant company pleaded before the Tribunal that there has been a breach of the conditions of the policy. However, after passing the interim award for an amount of Rs. 50,000/-, the appellant company contended that the policy was not in existence and, therefore, sought the recall of the order, but the said petition was dismissed and, ultimately, a final award was passed on 9th of June, 2014, directing the payment as aforesaid. After passing of the award, the appellant company scanned its records and found that the copy of the policy produced by the respondents was a fake and a fraudulent document. Sensing this interpolation and fraud having been committed in respect of the subject document, a review petition came to be filed before the Tribunal contending therein that the award has flowed on the basis of a fraudulent document and, therefore, no benefit can be derived out of it. The Tribunal dismissed the review petition on the ground that no such plea had been taken earlier in the written submissions filed by the company and no document had been placed on record during such period that the claim was adjudicated.
3. Aggrieved of the said order passed in the review petition as also the basic award, the appellant Company has filed this appeal on the grounds, inter alia, that the learned Tribunal, while dealing with the review petition, did not provide an opportunity to the appellant company for producing the documents and, instead, came to the conclusion that no new grounds have come to surface. The learned Tribunal ordered the dismissal of the motion by stating in the order that the appellant company had pleaded breach of the policy conditions, therefore, in its estimation it pre-supposes the existence of the policy. Per Contra, the respondent claimants have sought the dismissal of the appeal on two counts, first, that after passing of the interim award recalling motion was filed on the plea that the policy did not exist which was dismissed and that being the position, the appellant Company is estopped in law from contending that the policy was a fraudulent one and, second, that the contention of the appellant company needs to be discarded on the plea of res-judicata as the Tribunal had rejected the recalling motion providing for payment of interim compensation. It is also stated that the plea of the commission of fraud was not known to it till such time that the final award was passed and it was only after passing of the final award that the appellant company noticed that fraud had been committed which necessitated them to file the review petition.
4. Heard and considered.
5. The copy of the policy produced by the respondents depicted that the same was valid from 14th of September, 2006 to 13th of September, 2007 and the premium of Rs. 1050 was also shown to have been deposited on 14th of September, 2006. This document has been brought on record by the appellant Company in a miscellaneous petition bearing MP No. 02/2018. On the perusal of the policy number in relation to the subject vehicle bearing registration No. DL5CA-2117, it came to be noticed that the policy relied upon and produced before the learned Tribunal by the claimants bore the certificate No. 123211 and the policy was shown to be valid from 14th of September, 2006 to 13th of September, 2007, covering the date of accident which had taken place on 6th of May, 2007. However, the copy of the policy available in the office of the appellant company and brought on record vide MP No. 02/2018 revealed that the policy having certificate No. 123211 issued in respect of the offending vehicle was in fact valid from 14th of September, 2005 to 13th of September, 2006 and the premium amount of Rs. 1050 vide receipt No. 0638717 had been received on 13th of September, 2005. Sensing this departure and fraud in respect of the subject document, a review petition came to be filed before the Tribunal by the appellant Company contending therein that the award has been procured on the basis of a fraudulent document and, therefore, no benefit can be derived therefrom. The Tribunal dismissed the review petition on the ground that no such plea had been taken earlier in the written submissions filed by the company and no documents had been placed on record during the period the claim was adjudicated. Before the Tribunal, the respondents have placed on record a document/policy which appears to be fake and fraudulent policy. A person cannot claim equity when he has not acted equitably. The policy attached to MP No. 02/2018, filed by the appellant company, is a sequel to the fact that it was valid from 14th of September, 2005 to 13th of September, 2006, while as the respondents produced the policy before the Tribunal depicting it to be valid from 14th of September, 2006 to 13th of September, 2007, which covered the date of accident also that had taken place on 6th of May, 2007. Fraud vitiates even the most solemn proceedings in any civilized system of jurisprudence. For a person to get justice, the basic requirement is that he comes to the Court with clean hands. A solemn duty is cast upon all the Courts to keep the stream of justice unpolluted. Any person who knocks at the portals of the Court must give a full and fair disclosure of all the materials and the process of the Court cannot be allowed to be abused. Fraud destroys the sanctity and the solemnity of the judicial proceedings. No one can be permitted to take umbrage, refuge or shelter under a fraudulent document.
6. The enunciations of law on the subject are lucid in detail and clear in content. In the case of "S.P. Chengalavaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. & Ors., reported in "MANU/SC/0192/1994 : AIR 1994 Supreme Court 853", the Apex Court of the country held as under:
07. The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, 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, 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, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation.
08. 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. ........"
7. In another case bearing the title "United India Insurance Co. Ltd. v. Rajendra Singh & Ors.", reported in "MANU/SC/0180/2000 : AIR 2000 SC 1165", the Supreme Court laid down the following:
"12. Thus the Tribunal refused to open the door to the appellant Company as the High Court declined to exercise its writ jurisdiction which is almost plenary for which no statutory constrictions could possibly be imposed. If a party complaining of fraud having been practised on him as well as on the court by another party resulting in a decree, cannot avail himself of the remedy of review or even the writ jurisdiction of the High Court, what else is the alternative remedy for him? Is he to surrender to the product of the fraud and thereby became a conduit to enrich the imposter unjustly? Learned Single Judge who indicated some other alternative remedy did not unfortunately spell out what is the other remedy which the appellant Insurance Company could pursue with."
8. In case titled "A.V. Papayya Sastry & Ors. v. Government of A.P. & Ors.", reported in "MANU/SC/1214/2007 : AIR 2007 Supreme Court 1546", the Apex Court has opined as under:
"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 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, (1956) 1 All ER 341: (1956) 1 QB 702: (1956) 2 WLR 502, Lord Denning observed:
"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 it 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 utilized as an engine of oppression by dishonest and fraudulent litigants.
27. In S.P. Chengalvaraya Naidu (dead) by LRs. V. Jagannath (dead) by LRs. & Ors. MANU/SC/0192/1994 : (1994) 1 SCC 1: JT 1994 (6) SC 331, 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 was 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:
"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, 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, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation".
(emphasis supplied).
29. The Court proceeded to state: "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 he guilty of playing fraud on the court as well as on the opposite party".
30. The Court concluded: "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) Pvt. Ltd., MANU/SC/0657/1996 : (1996) 5 SCC 550 : JT 1996 (7) SC 135, referring to Lazarus Estates and Smith v. East Elloe Rural District Council, MANU/UKHL/0005/1956 : 1956 AC 336 : (1956) 1 All ER 855 : (1956) 2 WLR 888, this Court stated;
"The judiciary in India also possesses inherent power, specially under Section 151 C.P.C., 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".
(Emphasis supplied)
32. In United India Insurance Co. Ltd. v. Rajendra Singh & Ors., MANU/SC/0180/2000 : (2000) 3 SCC 581 : JT 2000 (3) SC 151, by practising fraud upon the Insurance Company, the claimant obtained an award of compensation from the Motor Accident Claims Tribunal. On coming to know of fraud, the Insurance Company applied for recalling of the award. The Tribunal, however, dismissed the petition on the ground that it had no power to review its own award. The High Court confirmed the order. The Company approached this Court."
Taking into consideration the law laid down above, the award passed by the Tribunal requires to be looked into afresh in light of the averments of fraud set up by the appellant Company in this appeal
9. Learned counsel for the respondents has placed reliance on the judgments of law reported in MANU/SC/0196/2017 : (2017) 4 SCC 760 titled Satish Kumar Gupta & Ors. v. State of Haryana & Ors.; MANU/JK/0324/2008 : 2010 (2) JKJ 299 (HC) titled Kartar Chand & Anr. v. Sheelo Devi & Ors.; and MANU/JK/0202/2007 : 2008 9 (1) JKJ 498 (HC) titled Sukh Devi & Ors. v. Mst. Vidya Devi & Ors., which provide that additional evidence cannot be allowed to be placed on record at the appellant stage to fil in a lacuna or to patch weak points in the case, unless and until it is shown to the Court that same were not previously available with the applicants. It is not a case where the appellant company has tried to fill up a lacuna or to patch weak points but it is a case where the appellant Company has come up with a plea substantiating it by placing on record a document to show that the respondents have employed fraud, trickstry and deceit in obtaining the award.
10. The argument of the learned counsel for the respondents that the allegation of fraud has to be specifically pleaded by giving specific details as to how fraud has been played and by whom it has been played and it has to be proved by leading cogent evidence during the course of trial cannot be disputed. However, the answer to this argument is that the appellant Company has by placing on record a policy portrayed that the vehicle was not covered under and in terms of a valid policy when the accident took place and the policy which the respondents have exhibited before the Court which formed the baseline for passing the award related to the year 2005-06 and not the year 2006-07 and, therefore, the award comes under a smoke of cloud. It is not that this Court is to arrive at a finding on the issue of fraud, at this juncture only, but it has to be proved before the Tribunal and this Court is of the firm opinion that the matter requires to be given a fresh consideration in light of the issues raised herein this appeal, which touch at the very root of the case.
11. In view of what has been said and done above, the appeal is allowed and the award dated 9th of June, 2014 as also the order dated 10th of September, 2015, passed in the review petition by the learned Tribunal are set aside. The matter is remanded to the learned Tribunal for determining the issue whether the policy on which the respondents acted and relied was or was not the outcome of a fraud and if so, what shall be its effect. The learned Tribunal shall give an opportunity to both sides for adducing evidence in support of their respective contentions, taking into consideration both the policies and find out their genuineness and truth.
12. Registry to send down the record alongwith a copy of this judgment.
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