Fraud / Misleading the Courts

AIR 2007 SC 1546

Para 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".

Para 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.

Para 23: In the leading case of Lazarus Estates Ltd. V/s. Beasley, 1956 1 AllER 341, 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."

Para 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.

Para 25: It has been said; Fraud and justice never dwell together (frauset jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolusneminipatrocinaridebent).

Para 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.

Para 27:  In S.P. Chengalvaraya Naidu (dead) by LRs. V/s. Jagannath (dead) by LRs. &Ors., 1994 1 SCC 1, 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.

Para 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)

Para 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".

Para 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".

Para 31: In Indian Bank V/s. Satyam Fibres (India) Pvt. Ltd., 1996 5 SCC 550, referring to Lazarus Estates and Smith V/s. East Elloe Rural District Council, 1956 1 AllER 855, this Court stated;

"The judiciary in India also possesses inherent power, specially u/s. 151 of the Code of Civil Procedure, 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)

Para 32: In United India Insurance Co. Ltd. V/s. Rajendra Singh &Ors., 2000 3 SCC 581, 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.

Para 33: Allowing the appeal and setting aside the orders, this Court stated;

"It is unrealistic to expect the appellant company to resist a claim at the first instance on the basis of the fraud because appellant company had at that stage no knowledge about the fraud allegedly played by the claimants. If the Insurance Company comes to know of any dubious concoction having been made with the sinister object of extracting a claim for compensation, and if by that time the award was already passed, it would not be possible for the company to file a statutory appeal against the award. Not only because of bar of limitation to file the appeal but the consideration of the appeal even if the delay could be condoned, would be limited to the issues formulated from the pleadings made till then.

Therefore, we have no doubt that the remedy to move for recalling the order on the basis of the newly discovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation. No Court or tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim.

The allegation made by the appellant Insurance Company, that claimants were not involved in the accident which they described in the claim petitions, cannot be brushed aside without further probe into the matter, for, the said allegation has not been specifically denied by the claimants when they were called upon to file objections to the applications for recalling of the awards. Claimants then confined their resistance to the plea that the application for recall is not legally maintainable. Therefore, we strongly feel that the claim must be allowed to be resisted, on the ground of fraud now alleged by the Insurance Company. If we fail to afford to the Insurance Company an opportunity to substantiate their contentions it might certainly lead to serious miscarriage of justice".(emphasis supplied)

Para 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 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.

AIR 2013 SC 3568

Para 18: It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading. In dealing with applications for special leave, the Court naturally takes statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading."(emphasis added)

Para 19 In Dalip Singh v. State of Uttar Pradesh (supra), this Court considered the question whether relief should be denied to the appellant who did not state correct facts in the application filed before the Prescribed Authority and who did not approach the High Court with clean hands. After making a reference to some of the precedents, the Court observed:

"while exercising discretionary and equitable jurisdiction under Article 136 of the Constitution, the facts and circumstances of the case should be seen in their entirety to find out if there is miscarriage of justice. If the appellant has not come forward with clean hands, has not candidly disclosed all the facts that he is aware of and he intends to delay the proceedings, then the Court will non-suit him on the ground of contumacious conduct."

20 In Oswal Fats and Oils Limited v. Additional Commissioner (Administration) (supra), relief was denied to the appellant by making the following observations:

"It is quite intriguing and surprising that the lease agreement was not brought to the notice of the Additional Commissioner and the learned Single Judge of the High Court and neither of them was apprised of the fact that the appellant had taken 27.95 acres land on lease from the Government by unequivocally conceding that it had purchased excess land in violation of Section 154(1) of the Act and the same vested in the State Government. In the list of dates and the memo of special leave petition filed in this Court also there is no mention of lease agreement dated 15-10-1994.

This shows that the appellant has not approached the Court with clean hands. The withholding of the lease agreement from the Additional Commissioner, the High Court and this Court appears to be a part of the strategy adopted by the appellant to keep the quasi-judicial and judicial forums including this Court in dark about the nature of its possession over the excess land and make them believe that it has been subjected to unfair treatment. If the factum of execution of lease agreement and its contents were disclosed to the Additional Commissioner, he would have definitely incorporated the same in the order dated 30-5-2001. In that event, the High Court or for that reason this Court would have non-suited the appellant at the threshold. However, by concealing a material fact, the appellant succeeded in persuading the High Court and this Court to entertain adventurous litigation instituted by it and pass interim orders. If either of the Courts had been apprised of the fact that by virtue of lease deed dated 15-10-1994, the appellant has succeeded in securing temporary legitimacy for its possession over excess land, then there would have been no occasion for the High Court or this Court to entertain the writ petition or the special leave petition.

20. It is settled law that a person who approaches the court for grant of relief, equitable or otherwise, is under a solemn obligation to candidly disclose all the material/important facts which have bearing on the adjudication of the issues raised in the case. In other words, he owes a duty to the court to bring out all the facts and refrain from concealing/suppressing any material fact within his knowledge or which he could have known by exercising diligence expected of a person of ordinary prudence. If he is found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the court not only has the right but a duty to deny relief to such person."(emphasis supplied).

AIR 2005 SC 3330

Para 10: By "fraud" is meant an intention to deceive; whether it is from any expectation of advantage to the party himself or from the 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 and 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.

Para 11: 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.

Para 12: "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 willfully 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 veidab initio. Fraud and deception are synonymous. 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.

Para 13: "Fraud" and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct. Michael Levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, 'wing me into the easy hearted man and trap him into snares'. It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary "fraud" in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, "fraud" is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Indian Contract Act, 1872 defines "fraud" as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact, which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it was false. In a leading English case i.e. Derry and Ors. V/s. Peek what constitutes "fraud" was described thus: "fraud" is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false". But "fraud" in public law is not the same as "fraud" in private law. Nor can the ingredients, which establish "fraud" in commercial transaction, be of assistance in determining fraud in Administrative Law. It has been aptly observed by Lord Bridge in Khawaja V/s. Secretary of State for Home Deptt. that it is dangerous to introduce maxims of common law as to effect to fraud while determining fraud in relation to statutory law. "Fraud" in relation to statute must be a colourable transaction to evade the provisions of a statute. "If a statute has been passed for some one particular purpose, a court of law will not countenance any attempt which may be made to extend the operation of the Act to something else which is quite foreign to its object and beyond its scope. Present day concept of fraud on statute has veered round abuse of power or mala fide exercise of power. It may arise due to overstepping the limits of power or defeating the provision of statute by adopting subterfuge or the power may be exercised for extraneous or irrelevant considerations. The colour of fraud in public law or administration law, as it is developing, is assuming different shades. It arises from a deception committed by disclosure of incorrect facts knowingly and deliberately to invoke exercise of power and procure an order from an authority or tribunal. It must result in exercise of jurisdiction which otherwise would not have been exercised. The misrepresentation must be in relation to the conditions provided in a section on existence or non-existence of which the power can be exercised. But non-disclosure of a fact not required by a statute to be disclosed may not amount to fraud. Even in commercial transactions non-disclosure of every fact does not vitiate the agreement. "In a contract every person must look for himself and ensures that he acquires the information necessary to avoid bad bargain. In public law the duty is not to deceive.

Para 14: In that case it was observed as follows:

"Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct. Michael levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, 'wing me into the easy-hearted man and trap him into snares'. It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary fraud in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, fraud is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick. According to Halsbury's Laws of England, a representation is deemed to have been false, and therefore a misrepresentation, if it was at the material date false in substance and in fact. Section 17 of the Contract Act defines fraud as act committed by a party to a contract with intent to deceive another. From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of the fact with knowledge that it was false. In a leading English case Derry V/s. Peek (supra) what constitutes fraud was described thus: 'Fraud is proved when it is shown that a false representation has been made (i) knowingly, or (ii) without belief in its truth, or (iii) recklessly, careless whether it be true or false'."

Para 15: This aspect of the matter has been considered recently by this Court in RoshanDeen V/s. PreetiLal, Ram PreetiYadav V/s. U.P. Board of High School and Intermediate Education, Ram Chandra Singh's case (supra) and Ashok Leyland Ltd. V/s. State of T.N. and Another.

Para 16: Suppression of a material document would also amount to a fraud on the court.

Para 17: "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 on fraud; as observed in Ram PreetiYadav's case (supra).

Para 18: In Lazarus Estate Ltd. V/s. Beasley, Lord Denning observed "No Judgement 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 Judgement Lord Parker LJ observed that fraud vitiates all transactions known to the law of however high a degree of solemnity.

Para 19: These aspects were recently highlighted in the State of Andhra Pradesh and Anr. V/s. T. SuryachandrRao.

AIR 2010 SC 2210

Para 47: The present appellants had also not disclosed that land allotted to them falls in commercial area. When a person approaches a Court of Equity in exercise of its extraordinary jurisdiction under Article 226/227 of the constitution, he should approach the Court not only with clean hands but also with clean mind, clean heart and clean objective. "equally, the judicial process should never become an instrument of appreciation or abuse or a means in the process of the Court to subvert justice. " Who seeks equity must do equity. The legal maxim "jure naturawaequumestneminum cum alteriusdetrimento et injuriafierilocupletiorem", means that it is a law of nature that one should not be enriched by the loss or injury to another. (vide the Ramjas Foundation and Ors. Vs. Union of India and Ors. AIR 1993 SC 852; K. P. SrinivasVs. R. M. Premchand and ors. (1994) 6 SCC 620 and Nooruddin Vs. (Dr.) K. L. Anand (1995) 1 SCC 242 ).

Para 48: Similarly, in Ramniklal N. Bhutta and Anr.Vs. State of Maharashtra and Ors. AIR 1997 SC 1236, this Court observed as under:-

"the power under Article 226 is discretionary. It will be exercised only in furtherance of interest of justice and not merely on the making out of a legal point. . . . . the interest of justice and the public interest coalesce. They are very often one and the same. . . . . . The Courts have to weigh the public interest vis-a-vis the private interest while exercising. . . . any of their discretionary powers (Emphasis added ).

Para 49: In M/s TilokchandMotichand and Ors. Vs. H. B. Munshi and Anr. AIR 1970 SC 898; State of Haryana Vs. Karnal Distillery, AIR 1977 SC 781; and Sabia Khan and ors. Vs. State of U. P. and Ors. AIR 1999 SC 2284, this Court held that filing totally misconceived petition amounts to abuse of the process of the Court. Such a litigant is not required to be dealt with lightly, as petition containing misleading and inaccurate statement, if filed, to achieve an ulterior purpose amounts to abuse of the process of the court. A litigant is bound to make "full and true disclosure of facts. "

Para 50: In Abdul RahmanVs. PrasonyBai and Anr. AIR 2003 SC 718; S. J. S. Business Enterprises (P) Ltd. Vs. State of Bihar and Ors. (2004) 7 SCC 166; and Oswal Fats and Oils Ltd. Vs. Addl. Commissioner (Admn), Bareily division, Bareily and Ors. JT 2010 (3) SC 510, this Court held that whenever the Court comes to the conclusion that the process of the Court is being abused, the Court would be justified in refusing to proceed further and refuse relief to the party. This rule has been evolved out of need of the Courts to deter a litigant from abusing the process of the Court by deceiving it.

Para 51: In view of the above, we are of the considered opinion that Shri Manohar Lal did not approach the Court with discloser of true facts, and particularly, that he had been allotted the land in the commercial area by GDA on the instruction of the Chief Minister of Uttar Pradesh.

Para 52: It is a fit case for ordering enquiry or initiating proceedings for committing criminal contempt of the Court as the parties succeeded in misleading the Court by not disclosing the true facts. However, we are not inclined to waste court's time further in these cases. Our experience has been that the so-called administration is not likely to wake-up from its deep slumber and is never interested to redeem the limping society from such hapless situations. We further apprehend that our pious hope that administration may muster the courage one day to initiate disciplinary/criminal proceedings against such applicants/erring officers/employees of the authority, may not come true. However, we leave the course open for the State government and GDA to take decision in regard to these issues and as to whether GDA wants to recover the possession of the land already allotted to these applicants in commercial area contrary to the Land Policy or value thereof adjusting the amount of compensation deposited by them, if any.

AIR 2003 SC 4023

Para 24: In order to sustain and maintain sanctity and solemnity of the proceedings in law courts it is necessary that parties should not make false or knowingly, inaccurate statements or misrepresentation and/or should not conceal material facts with a design to gain some advantage or benefit at the hands of the court, when a court is considered as a place where truth and justice are the solemn pursuits. If any party attempts to pollute such a place by adopting recourse to make misrepresentation and is concealing material facts it does so at its risk and cost. Such party must be ready to take consequences that follow on account of its own making. At times lenient or liberal or generous treatment by courts in dealing with such matters are either mistaken or lightly taken instead of learning proper lesson. Hence there is a compelling need to take serious view in such matters to ensure expected purity and grace in the administration of justice.

Para 25: Before we part with these cases, we must observe that the misrepresentation made by the appellants in the SLPs supported by an affidavit require serious action but we refrain from taking any further action in view of the apology and regret expressed by the appellants during the hearing. But, we administer a warning to them to be careful in future and not to make any misrepresentation or false statement before any court and impose cost also.

2007 (14) SCC 108

Para 25: It is clear that even the Bench hearing the review petition had been mislead by the respondent-University by making a false statement, the review order dated 5.5.2005 was vitiated by fraud and was liable to be recalled by the High Court. It was also contended that the High Court erred in dismissing the writ petition in a cursory manner by the impugned order dated 3.8.2005 without appreciating the contentions raised by the appellant which were fully supported by indisputable documents on record, which documents emanated from the College and the University. The writ petition clearly indicates how the High Court had been mislead by the false statements made by the University and the High Court ought to have considered the submissions made by the appellant.

Para 26: The High Court, in our opinion, has erred in law rejecting the writ petition without considering the merits of the matter though the merits of the matter were specifically argued by the appellant and the misrepresentations made by the University were brought to the notice of the High Court.

Para 30: It is well settled by catena of decisions of this Court that if a case of fraud or misrepresentation of such a dimension is discovered that the very basis of the order passed by a Court of law is affected, the Court can recall its order. The power to recall an order founded upon fraud and misrepresentation is an inherent power of the Court.

Para 33: When fraud was clear on the fact of the record, the High Court erred in law in dismissing the writ petition of the appellant.

Para 34: Learned counsel appearing for the respondents was not able to controvert the factual statements made by the learned counsel appearing for the appellant at the time of hearing. The arguments made by the learned counsel appearing for the appellant are fully supported by the records filed before the High Court and also the annexures and material placed before us. We, therefore, have no hesitation in accepting the arguments advanced by the learned counsel appearing for the appellant and allowing the appeal.

2003 (8) SCC 319

Para 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 dwells together.

Para 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 former either by word or letter.

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

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

Para 19: In Derry V/s. Peek, (1889) 14 AC 337, it was held: In an 'action of deceit the plaintiff must prove actual fraud. Fraud is proved when it is shown that a false representation has been made knowingly, or without belief in its truth, or recklessly, without caring whether it be true or false. A false statement, made through carelessness and without reasonable ground for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud. Such a statement, if made in the honest belief that it is true, is not fraudulent and does not render the person make it liable to an action of deceit. In Kerr on Fraud and Mistake at page 23, it is stated:

"The true and only sound principle to be derived from the cases represented by Slim V/s. Croucher is this: that a representation is fraudulent not only when the person making it knows it to be false, but also when, as Jessel, M.R., pointed out, he ought to have known, or must be taken to have known, that it was false. This is sound and intelligible principle, and is, moreover, not inconsistent with Derry V/s. Peek. A false statement which a person ought to have known was false, and which he must therefore be taken to have known was false, cannot be said to be honestly believed in, "A consideration of the grounds of belief", said Lord Herschell, "is no doubt an important aid in ascertaining whether the belief was really entertained. A man's mere assertion that he believed the statement he made to be true is not accepted as conclusive proof that he did so."

Para 20: In Bigelow on Fraudulent Conveyance at page 1, it is stated:

"If on the facts the average man would have intended wrong, that is enough."

It was further opined:

"This conception of fraud (and since it is not the writer's, he may speak of it without diffidence), steadily kept in view, will render the administration of the law less difficult, or rather will make its administration more effective. Further, not to enlarge upon the last matter, it will do away with much of the prevalent confusion in regard to 'moral' fraud, a confusion which, in addition to other things, often causes lawyers to take refuge behind such convenient and indeed useful but often obscure language as 'fraud upon the law'. What is fraud upon the law? Fraud can be committed only against a being capable of rights, and 'fraud upon the law' darkens counsel. What is really aimed at in most cases by this obscure contrast between moral fraud and fraud upon the law, is a contrast between fraud in the individual's intention to commit the wrong and fraud as seen in the obvious tendency of the act in question."

Para 21: Recently this Court by an order dated 3rd September, 2003 in Ram Preeti Yadav vs. U.P. Board of High School & Intermediate Education & Ors. reported in JT 2003 (Supp. 1) SC 25 held:

"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 former either by words or letter. Although negligence is not fraud but it can be evidence on fraud. (See Derry vs. Peek (1889) 14 AC 337) In Lazarus Estate vs. Berry [(1956) 1 All ER 341] the Court of Appeal stated the law thus:

"I cannot accede to this argument for a moment "no Court in this land will allow a person to keep an advantage which he has obtained by fraud. 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". The Court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever." In S.P. Chengalvaraya Naidu vs. Jagannath [(1994) 1 SCC 1] this Court stated that fraud avoids all judicial acts, ecclesiastical or temporal."

Para 22: 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. In Arlidge & Parry on Fraud, it is stated at page 21:

"Indeed, the word sometimes appears to be virtually synonymous with "deception", as in the offence (now repealed) of obtaining credit by fraud. It is true that in this context "fraud" included certain kinds of conduct which did not amount to false pretences, since the definition referred to an obtaining of credit "under false pretences, or by means of any other fraud". In Jones, for example, a man who ordered a meal without pointing out that he had no money was held to be guilty of obtaining credit by fraud but not of obtaining the meal by false pretences: his conduct, though fraudulent, did not amount to a false pretence. Similarly it has been suggested that a charge of conspiracy to defraud may be used where a "false front" has been presented to the public (e.g. a business appears to be reputable and creditworthy when in fact it is neither) but there has been nothing so concrete as a false pretence. However, the concept of deception (as defined in the Theft Act 1968) is broader than that of a false pretence in that (inter alia) it includes a misrepresentation as to the defendant's intentions; both Jones and the "false front" could now be treated as cases of obtaining property by deception."

Para 23: 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.

Para 24: In Smt. Shrisht Dhawan vs. M/s. Shaw Brothers [AIR 1992 SC 1555], it has been held that:

"Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct."

Para 25: In S.P. Chengalvaraya Naidu v. Jagannath [(1994) 1 SCC 1] this Court in no uncertain terms observed:

".. .The principle of "finality of litigation" cannot be passed 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 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... 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... 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."

Para 26: In Indian Bank vs. Satyam Fibres (India) Pvt. Ltd. [(1996) 5 SCC 550], this Court after referring to Lazards Estates (supra) and other cases observed that 'since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court it also amounts to an abuse of the process of the Court, that the Courts have inherent power to set aside an order obtained by practising fraud upon the Court, and that where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order". It was further held:

"The judiciary in India also possesses inherent power, specially under Section 151 CPC, to recall its Judgement 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."

Para 27: In Chittaranjan Das vs. Durgapore Project Limited & Ors [99 CWN 897], it has been held:

"Suppression of a material document which affects the condition of service of the petitioner, would amount to fraud in such matters. Even the principles of natural justice are not required to be complied within such a situation. It is now well known that a fraud vitiates all solemn acts. Thus, even if the date of birth of the petitioner had been recorded in the service returns on the basis of the certificate produced by the petitioner, the same is not sacrosanct nor the respondent company would be bound thereby."

2011 (7) SCC 69

Para 53: Courts have, over the centuries, frowned upon litigants who, with intent to deceive and mislead the courts, initiated proceedings without full disclosure of facts. Courts held that such litigants have come with "unclean hands" and are not entitled to be heard on the merits of their case.

Para 54: In Dalglish V/s. Jarvie {2 Mac. & G. 231,238}, the Court, speaking through Lord Langdale and Rolfe B., laid down:

"It is the duty of a party asking for an injunction to bring under the notice of the Court all facts material to the determination of his right to that injunction; and it is no excuse for him to say that he was not aware of the importance of any fact which he has omitted to bring forward."

Para 55: In Castelli V/s. Cook {1849 (7) Hare, 89,94}, Vice Chancellor Wigram, formulated the same principles as follows:

"A plaintiff applying ex parte comes under a contract with the Court that he will state the whole case fully and fairly to the Court. If he fails to do that, and the Court finds, when the other party applies to dissolve the injunction, that any material fact has been suppressed or not property brought forward, the plaintiff is told that the Court will not decide on the merits, and that, as has broken faith with the Court, the injunction must go."

Para 56: In the case of Republic of Peru V/s. Dreyfus Brothers & Company {55 L.T. 802,803}, Justice Kay reminded us of the same position by holding:

"...If there is an important misstatement, speaking for myself, I have never hesitated, and never shall hesitate until the rule is altered, to discharge the order at once, so as to impress upon all persons who are suitors in this Court the importance of dealing in good faith with the Court when ex parte applications are made."

Para 57: In one of the most celebrated cases upholding this principle, in the Court of Appeal in R. V/s. Kensington Income Tax Commissioner {1917 (1) K.B. 486} Lord Justice Scrutton formulated as under:

"and it has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts- facts, now law. He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have been fully and fairly stated to it, the Court will set aside any action which it has taken on the faith of the imperfect statement."

Para 58: It is one of the fundamental principles of jurisprudence that litigants must observe total clarity and candour in their pleadings and especially when it contains a prayer for injunction. A prayer for injunction, which is an equitable remedy, must be governed by principles of `uberrima fide'.

Para 59: The aforesaid requirement of coming to Court with clean hands has been repeatedly reiterated by this Court in a large number of cases. Some of which may be noted, they are: Hari Narain V/s. Badri Das - AIR 1963 SC 1558, Welcome Hotel and others V/s. State of A.P. and others - (1983) 4 SCC 575, G. Narayanaswamy Reddy (Dead) by LRs. and another V/s. Government of Karnatka and another - JT 1991(3) SC 12: (1991) 3 SCC 261, S.P. Chengalvaraya Naidu (Dead) by LRs. V/s. Jagannath (Dead) by LRs. and others - JT 1993 (6) SC 331: (1994) 1 SCC 1, A.V. Papayya Sastry and others V/s. Government of A.P. and others - JT 2007 (4) SC 186: (2007) 4 SCC 221, Prestige Lights Limited V/s. SBI - JT 2007(10) SC 218: (2007) 8 SCC 449, Sunil Poddar and others V/s. Union Bank of India - JT 2008(1) SC 308: (2008) 2 SCC 326, K.D.Sharma V/s. SAIL and others - JT 2008 (8) SC 57: (2008) 12 SCC 481, G. Jayashree and others V/s. Bhagwandas S. Patel and others - JT 2009(2) SC 71 : (2009) 3 SCC 141, Dalip Singh V/s. State of U.P. and others - JT 2009 (15) SC 201: (2010) 2 SCC 114.

Para 60: In the last noted case of Dalip Singh (supra), this Court has given this concept a new dimension which has a far reaching effect. We, therefore, repeat those principles here again:

"For many centuries Indian society cherished two basic values of life i.e. "satya"(truth) and "ahimsa (non-violence), Mahavir, Gautam Budha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in the pre- independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post-Independence period has seen drastic changes in our value system. The materialism has overshadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings.

In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."

Para 61: However, this Court is constrained to observe that those principles are honoured more in breach than in their observance.

Para 62: Following these principles, this Court has no hesitation in holding that the instant writ petition is an attempt by the petitioner to mislead the Court on the basis of frivolous allegations and by suppression of material facts as pointed out and discussed above.

Para 65: This court wants to make one thing clear i.e. perfunctory and slipshod affidavits which are not consistent either with Order XIX Rule 3 of the CPC or with Order XI Rules 5 and 13 of the Supreme Court Rules should not be entertained by this Court.

Para 66: In fact three Constitution Bench judgments of this Court in Purushottam Jog Naik (supra), Barium Chemicals Ltd. (supra) and A.K.K. Nambiar (supra) and in several other judgments pointed out the importance of filing affidavits following the discipline of the provision in the Code and the said rules.

Para 67: These rules, reiterated by this Court time and again, are aimed at protecting the Court against frivolous litigation must not be diluted or ignored. However, in practice they are frequently flouted by the litigants and often ignored by the Registry of this Court. The instant petition is an illustration of the same. If the rules for affirming affidavit according to Supreme Court were followed, it would have been difficult for the petitioner to file this petition and so much of judicial time would have been saved. This case is not isolated instance. There are innumerable cases which have been filed with affidavits affirmed in a slipshod manner.

AIR 2010 SC 3823

Para 20: The power under Article 226 of the Constitution is discretionary and supervisory in nature. It is not issued merely because it is lawful to do so. The extraordinary power in writ jurisdiction does not exist to set right mere errors of law which do not occasion any substantial injustice. A writ can be issued only in case of a grave miscarriage of justice or where there has been a flagrant violation of law. The writ court has not only to protect a person from being subjected to a violation of law but also to advance justice and not to thwart it. The Constitution does not place any fetter on the power of the extraordinary jurisdiction but leaves it to the discretion of the court. However, being that the power is discretionary, the court has to balance competing interests, keeping in mind that the interests of justice and public interest are coalesce generally. A court of equity, when exercising its equitable jurisdiction must act so as to prevent perpetration of a legal fraud and promote good faith and equity. An order in equity is one which is equitable to all the parties concerned. Petition can be entertained only after being fully satisfied about the factual statements and not in a casual and cavalier manner. (Vide Champalal Binani Vs. The Commissioner of Income Tax, West Bengal & Ors., AIR 1970 SC 645; Chimajirao Kanhojirao Shrike & Anr. V/s. Oriental Fire and General Insurance Co. Ltd., AIR 2000 SC 2532; LIC of India V/s. Smt. Asha Goel & Anr., AIR 2001 SC 549; The State Financial Corporation & Anr. V/s. M/s. Jagdamba Oil Mills & Anr., AIR 2002 SC 834; Chandra Singh V/s. State of Rajasthan & Anr., AIR 2003 SC 2889; and Punjab Roadways, Moga through its General Manager V/s. Punja Sahib Bus and Transport Co. & Ors, (2010) 5 SCC 235).

21 Where a party's claim is not founded on valid grounds, the party cannot claim equity. A party that claims equity must come before the court with clean hands as equities have to be properly worked out between parties to ensure that no one is allowed to have their pound of flesh vis-`-vis the others unjustly. (vide: Sikkim Subba Associates V/s. State of Sikkim (2001) 5 SCC 629).

Para 22: In Andhra Pradesh State Financial Corporation V/s. M/s. GAR Re-Rolling Mills & Anr., AIR 1994 SC 2151, this Court observed:-

"Equity is always known to defend the law from clefty evasions and new subtelities invented to evade law."

Para 23: In M.P. Mittal V/s. State of Haryana & Ors., AIR 1984 SC, 1888, this Court held:

".......it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice. The Court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantage or perpetrate an unjust gain."

False / Misleading / suppression of facts / pleadings before the Court

In the case of Dhananjay Sharma v State of Haryana & Ors., (1995) 3 SCC 757, the Supreme Court has held, inter alia, as- The filing of false affidavits in judicial proceedings in any court of law exposes the intention of the concerned party in perverting the course of justice. The due process of law cannot be permitted to be slighted nor the majesty of law be made a mockery by such acts or conduct on the part of the parties to the litigation or even while appearing as witnesses.

The Hon’ble Apex Court in the case of Rita Markandey v Surjit Singh Arora, (1996) 6 SCC 14, inter alia, observed as, Filing of false affidavits or making false statement on oath in Courts aims at striking a blow at the Rule of Law and no court can ignore such conduct which has the tendency to shake public confidence in the judicial institutions because the very structure of an ordered life is put at stake.

In the case of Murray & Co. vs Ashok Kr. Newatia & Anr, AIR 2000 SC 833, 10, the Apex Court observed to say that the right to inflict punishment for contempt of Court in terms of the Act of 1971 on to the Law Courts has been for the purposes of ensuring the rule of law and orderly administration of justice. This is a special Jurisdiction conferred on to the law courts to punish an offender for his contemptuous conduct or obstruction to majesty of law. Litigant public ought to be extremely careful and cautious in the matter of making statements before Courts of Law.

In the case of Afzal v. State of Haryana 1995 Supp (2) SCC 388 wherein this Court observed to say that it cannot be lightly brushed aside and the tendency to file false affidavits or fabricated documents or forgery of the document and placing them as part of the record of the Court are matters of grave and serious concern.

In the case of Bineet Kumar Singh AIR 2001 SC 2018, the Apex Court observed to say that a false or misleading or a wrong statement deliberately and wilfully made by a party to the proceedings to obtain a favourable order would undoubtedly tantamount to interefere with the due course of judicial proceedings.

In the case of Narmada Bachao Andolan Versus State Of Madhya Pradesh AIR 2011 SC 1989, the Apex Court observed:

140 Whenever the Court comes to the conclusion that the process of the Court is being abused, the Court would be justified in refusing to proceed further with the matter. This rule has been evolved out of need of the Courts to deter a litigant from abusing the process of the Court by deceiving it. However, the concealed fact must be material one in the sense that had it not been suppressed, it would have an effect on the merit of the case/order. The legal maxim "Juri Ex Injuria Non Oritur" means that a right cannot arise out of wrong doing, and it becomes applicable in a case like this. (Vide: The Ramjas Foundation &Ors. V/s. Union of India &Ors., AIR 1993 SC 852; Noorduddin V/s. Dr. K.L. Anand, (1995) 1 SCC 242; Ramniklal N. Bhutta&Anr. V/s. State of Maharashtra &Ors., AIR 1997 SC 1236; Sabia Khan &Ors. V/s. State of U.P. &Ors., (1999) 1 SCC 271; S.J.S. Business Enterprises (P) Ltd. V/s. State of Bihar &Ors., (2004) 7 SCC 166; and Union of India &Ors. V/s. ShantiranjanSarkar, (2009) 3 SCC 90).

141 It is a settled proposition of law that a false statement made in the Court or in the pleadings, intentionally to mislead the Court and obtain a favourable order, amounts to criminal contempt, as it tends to impede the administration of justice. It adversely affects the interest of the public in the administration of justice. Every party is under a legal obligation to make truthful statements before the Court, for the reason that causing an obstruction in the due course of justice "undermines and obstructs the very flow of the unsoiled stream of justice, which has to be kept clear and pure, and no one can be permitted to take liberties with it by soiling its purity". (Vide: Naraindas V/s. Government of Madhya Pradesh &Ors., AIR 1974 SC 1252; The Advocate General, State of Bihar V/s. M/s. Madhya Pradesh Khair Industries &Anr., AIR 1980 SC 946; and Afzal&Anr. V/s. State of Haryana &Ors., (1996) 7 SCC 397).

142 In K.D. Sharma V/s. Steel Authority of India Limited &Ors., (2008) 12 SCC 481, this Court held that:

"Prerogative writs......... are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ court must come with clean hands, put forward all the facts before the court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the court, his petition may be dismissed at the threshold without considering the merits of the claim." (Emphasis added)

143 While deciding the said case this Court relied upon the leading case of R. V/s. General Commissioners for the purposes of the Income Tax Act for the District of Kensington, (1917) 1KB 486, wherein it had been observed as under:

"...when an applicant comes to the court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts--it says facts, not law. He must not misstate the law if he can help it--the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts; and the penalty by which the court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the court will set aside any action which it has taken on the faith of the imperfect statement.......If the applicant makes a false statement or suppresses material fact or attempts to mislead the court, the court may dismiss the action on that ground alone ..... The rule has been evolved in the larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it." (Emphasis supplied)

144 In such a case the person who suppresses the material facts from the court is guilty of SuppressioVeri and SuggestioFalsi i.e. suppression or failure to disclose what a party is bound to disclose, which may amount to fraud.

In the case of Bineet Kumar Singh Versus Government Of Maharashtra AIR 2001 SC 2018, the Apex Court observed to say that, Para 6: The law of Contempt of Court is essentially meant for keeping the administration of justice pure and undefiled. It is difficult to rigidly define contempt. While on the one hand, the dignity of the Court has to be maintained at all costs, it must also be borne in mind that the contempt jurisdiction is of a special nature and should be sparingly used. The Supreme Court is the highest Court of records and it is charged with the duties and responsibilities of protecting the dignity of the Court. To discharge its obligation as the custodian of the administration of justice in the country and as the highest Court imbued with supervisory and appellate jurisdiction over all the lower Courts and Tribunals, it is inherently deemed to have been entrusted with the power to see the stream of justice in the country remains pure, that its course is not hindered or obstructed in any manner, that justice is delivered without fear or favour. To discharge this obligation, the Supreme Court has to take cognizance of the deviation from the path of justice. The sole object of the Court wielding its power to punish for contempt is always for the course of administration of justice. Nothing is more incumbent upon the Courts of justice, than to preserve their proceedings from being misrepresented, nor is there anything more pernicious when the order of the Court is forged and produced to gain undue advantage. Criminal contempt has been defined in Section 2(c) to mean interference with the administration of justice in any manner. A false or misleading or a wrong statement deliberately and wilfully made by a party to the proceedings to obtain a favourable order would undoubtedly tantamount to interfere with the due course of judicial proceedings. When a person is found to have utilised an order of a Court which he or she knows to be incorrect for conferring benefit on persons who are not entitled to the same, the very utilisation of the fabricated order by the person concerned would be sufficient to hold him/her guilty of contempt, irrespective of the fact whether he or she himself or herself is the author of fabrication.

In the case of Chandra Shashi Versus Anil Kumar Verma 1995 (1) SCC 421, the Apex Court observed:

Para 1: The stream of administration of justice has to remain unpolluted so that purity of court's atmosphere may give vitality to all the organs of the State. Polluters of judicial firmament are, therefore, required to be well taken care of to maintain the sublimity of court's environment; so also to enable it to administer justice fairly and to the satisfaction of all concerned.

2 Anyone who takes recourse to fraud, deflects the course of judicial proceedings; or if anything is done with oblique motive, the same interferes with the administration of justice. Such persons are required to be properly dealt with, not only to punish them for the wrong done, but also to deter others from indulging in similar acts which shake the faith of people in the system of administration of justice.

3 These prefatory remarks well project the importance of the point under consideration in this suo motu contempt action taken against respondent Anil Kumar for his having filed a fabricated document to oppose the prayer of his wife seeking transfer of a matrimonial proceeding from Delhi to Unnao.

In the case of Advocate General For The State Of Bihar Versus Madhya Pradesh Khair Industries, AIR 1980 SC 946, the Apex Court observed:

Para 8 In Halsbury's Laws of England, (4th Edn., Vol. 9, paragraph 38), there is a brief discussion of when abuse of the process of the Court may be a punishable contempt. It is said :

"38. Abuse of process in general. The Court has power to punish as contempt any misuse of the court's process. Thus the forging or altering of court documents and other deceits of like kind are punishable as serious contempt's. Similarly, deceiving the court or the court's officers by deliberately suppressing a fact, or giving false facts, may be a punishable contempt.

D S Poonia versus Yumnam Dimbajit Singh AIR 2003 SC 1855: The facts and circumstances showed that wrong statements made by both respondents with anxiety to defend themselves.

Pudi Appala versus Praveen prakash, 2006 CrLJ 885: Issuing Show Cause Notice though aware of pendency of WP is contempt.

[AIR 2003 SC 3039] The essence of the offence of the crime is not how false statements may injure this or that party to litigation but how they may deceive and mislead the Courts and thus produce mischievous consequences to the administration of Civil and Criminal justice.

Criminal Contempt – nature of –

(2011) 5 SCC 496 – Para 17

Criminal Contempt – interfering with judicial proceedings –

(2011) 12 SCC 755

Adverse remark against Session Judge – AIR 2011 SC 1103 – Para 24.

Criminal contempt – evil should be curbed with strong hands – AIR 2011 SC 1645 – 7, 9, 14, 21, 22, 23, 25.

Article 215 – contempt jurisdiction – bonafide defense – editorial publication highlighting irregularities in Appointments, Postings and Transfers etc – truth as a defense – No Contempt – AIR 2011 SC 2234 – 13, 21, 22, 23, 24.

Article 215 – in the exercise of Contempt jurisdiction – can review its own order – powers restated – 2011 (3) AIR Bom R 505 (Nagpur) – Paras 15, 11 – Misc C.A. 1048/2009 – Judg date: 22.12.2010.

Section 197 CrPC – 2011(5) All MR 635 – Paras 12, 14 – WP: 7802/2009 – Judg date: 12.08.2011

R K Anand Vs Registrar Delhi High Court 2009 8 SCC 106

SC order forged – gross contempt – (2001) 5 SCC 501 – Para 6.

Forged / fabricated document filed in Court – amounts to Criminal Contempt – (1995) 1 SCC 421 – Paras 2, 3, 7, 8, 9, 14.

Criticism of judiciary by Press – relevant point to consider to constitute Contempt (Paras 16, 17, 27 to 33) – Code of judicial ethics and etiquette (Paras 8, 57) – AIR 1978 SC 727 Three Judges Bench decision.

What amounts to criticism about judicial system ot judges which hampers administration of justice (Paras 8, 10) – Withholding sanction / consent by AG/SG, the aggrieved can yet approach the Court u/s 3(a) of the Act (Paras 58, 59, 62) – AIR 1988 SC 1208.

Criminal Contempt – abuse / misuse of the machinery / process of the Court – not all abuses are vulnerable to Contempt – an abuse / conduct which makes a mockery of the judicial process is criminal contempt – AIR 1980 SC 946, Para 7.

Complaint to HC against presiding officers of subordinate Court, even though used intemperate language, would not amount to Contempt, if the Complaint is made bonafide and in good faith, Paras 12, 13 – CrLJ 1973 1106 (P & H HC)

Casting aspersions on the integrity and competence of the HC judge tends to erode the authority of Courts – CrLJ 2001 3476, Paras 17, 25 (Delhi HC) (FB).

Contempt of Courts Act, 1952 – ascribing dishonesty to a judge amounts to Conyempt  (Paras 66, 69) – Article 19(1)(a) and 19(2) reconciled with the Contempt of the Court – Paras 52, 65) – AIR 1971 SC 1132. Five Judges Bench decision.

Civil Contempt / Criminal Contempt, distinction explained – Handcuffing a prisoner – a Civil Contempt – Su motu cognizance by the Court – 1988 CrLJ 438, Para 25.

Giving evidence by false affidavit amounts to Criminal Contempt (Para 7) – Section 12, burden and standard of proof, punishment cannot be imposed on probabilities, standard of proof is same as in criminal cases (Para 9) – the Court can take Cognizance even in the absence of sanction / consent from Advocate General / Solicitor General (Para 14) – AIR 2011 SC 1645.

Exercise of jurisdiction to punish is governed by principles (Paras 16, 17) – Publication seeking law officers and judges into disrepute is contempt (Paras 45, 47) – 1967 CrLJ 1470 (Andh HC)(DB).

Section 13 “due course of justice” – Para 13 – CrLJ 1976 746 (AP HC).

Section 13 “due course of justice” – Para 24 – CrLJ 1991 2834.

What is “interference with due course of justice” – 1967 CrLJ 1057, Paras 10, 13, 15, 18 (Raj HC)(DB)

(2000) 8 SCC 512 – Paras 39 to 44 – Three Judges Bench decision.

Criminal Contempt of Court –

AIR 1976 SC 859;

AIR 1980 SC 946, 951.

Perjury – 2013 (1) All MR 153

In the case of S P Chengalverau versus Jagannath – (1994) 1 SCC 1, the Hon’ble SC had the occasion to coin the doctrine of fraud.

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)

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".

Every court has inherent powers to recall such judgment /order where Order / judgment is alleged to have been obtained by fraud – suppression of facts – misrepresentation; or where it is brought to the notice of the Court that the Court itself has committed a mistake.

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".

In  Indian  Bank  v.  Satyam  Fibres  (India)  (P)  Ltd  (1996)  5  SCC  550,  a  two- judge  bench  of  the  Hon'ble  Supreme  Court,  after  making  reference  to  a  number  of  earlier  decisions  rendered  by  different  High  Courts  in  India,  stated  the  legal  position  thus:  “......  where  the  Court  is  misled  by  a  party  or  the  Court  itself  commits  a  mistake  which  prejudices  a  party,  the  Court  has  the  inherent  power  to  recall  its  order.” Paras 20, 22, 23, 27, 28, 30 to 33.

In this case while referring to the case of  Lazarus Estates and Smith v. East Elloe Rural District  Council, 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)

The Apex Court in the case of  Raj  Bahadur  Ras  Raja  versus  Seth  Hiralal,  AIR  1962  SC 527, said – the  inherent  powers  has  not  been  conferred  on  the  court,  it  is  a  power  inherent  in  a  court  by  virtue  of  its  duty  to  do  justice  between  the  parties  before  it.

As observed by Hon’ble Supreme Court in a case that inherent  powers  has  its roots  in  necessity  and  breadth  is  co-extensive  with  the  necessity.  N  S  Mills  versus  UOI  AIR  1976  SC  1152.

Section 151 of CPC – To recall and cancel its invalid order or order which causes injustice. Sitaram versus Kedarnath AIR 1957 All 825.

In the case of Jet Ply Wood Private Ltd & Anr Vs Madhukar Nowlakha & Ors-AIR 2006 SC 1260, the facts of the case are – a party based on (mis)representation of the other party, withdrew the Suit before the trial court and the trial court in fact imposed the condition that no new suit could be filed on this cause of action. The party so misrepresented applied for recall of the (Withdrawl) Order of the trial Court. The trial court refused to Recall. The party approached Calcutta HC under Article 227. The Calcutta HC directed to restore the said Suit. The party who misrepresented went into Appeal before SC.

The Hon’ble Supreme Court said – As indicated hereinbefore, the only point which falls for our consideration in these appeals is whether the Trial Court was entitled in law to recall the order by which it had allowed the plaintiff to withdraw his suit.

From the order of the Learned Civil Judge (Senior Division) 9th Court at Alipore, it is clear that he had no intention of granting any leave for filing of a fresh suit on the same cause of action while allowing the plaintiff to withdraw his suit. That does not, however, mean that by passing such an order the learned court divested itself of its inherent power to recall its said order, which fact is also evident from the order itself which indicates that the Court did not find any scope to exercise its inherent powers under Section 151 of the Code of Civil Procedure for recalling the order passed by it earlier. In the circumstances set out in the order of 24th September, 2004, the learned trial court felt that no case had been made out to recall the order which had been made at the instance of the plaintiff himself. It was, therefore, not a question of lack of jurisdiction but the conscious decision of the Court not to exercise such jurisdiction in favour of the plaintiff.

The aforesaid position was reiterated by the learned Single Judge of the High Court in his order dated 4th February, 2005, though the language used by him is not entirely convincing. However, the position was clarified by the learned Judge in his subsequent order dated 14th March, 2005, in which reference has been made to a bench decision of the Calcutta High Court in the case of Rameswar Sarkar (supra) which, in our view, correctly explains the law with regard to the inherent powers of the Court to do justice between the parties. There is no doubt in our minds that in the absence of a specific provision in the Code of Civil Procedure providing for the filing of an application for recalling of an order permitting withdrawal of a suit, the provisions of Section 151 of the Civil Procedure Code can be resorted to in the interest of justice.

The principle is well established that when the Code of Civil Procedure is silent regarding a procedural aspect, the inherent power of the court can come to its aid to act ex debito justitiae for doing real and substantial justice between the parties. This Court had occasion to observe in the case of Manohar Lal Chopra vs. Rai Bahadur Rao Raja Seth Hiralal, AIR 1962 SC 527, as follows:

"It is well settled that the provisions of the Code are not exhaustive, for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them."

Based on the aforesaid principle, the Division Bench of the Calcutta High Court, in almost identical circumstances in Rameswar Sarkar's case, allowed the application for withdrawal of the suit in exercise of inherent powers under Section 151 of the Code of Civil Procedure, upon holding that when through mistake the plaintiff had withdrawn the suit, the Court would not be powerless to set aside the order permitting withdrawal of the suit.

In United India Insurance Co. Ltd. v. Rajendra Singh & Ors., (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.

Allowing the appeal and setting aside the orders, this Court stated;

"It is unrealistic to expect the appellant company to resist a claim at the first instance on the basis of the fraud because appellant company had at that stage no knowledge about the fraud allegedly played by the claimants. If the Insurance Company comes to know of any dubious concoction having been made with the sinister object of extracting a claim for compensation, and if by that time the award was already passed, it would not be possible for the company to file a statutory appeal against the award. Not only because of bar of limitation to file the appeal but the consideration of the appeal even if the delay could be condoned, would be limited to the issues formulated from the pleadings made till then.

Therefore, we have no doubt that the remedy to move for recalling the order on the basis of the newly discovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation. No Court or tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim.

It is worthwhile to record the striking obsewrvation of Hon’ble SC in the case of A.V. PAPAYYA SASTRY & ORS versus Govt of A.P. & Ors – (2007) 4 SCC 221 –

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".

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.

[(2007) 14 SCC 108] Para 30: It is well settled by catena of decisions of this Court that if a case of fraud or misrepresentation of such a dimension is discovered that the very basis of the order passed by a Court of law is affected, the Court can recall its order. The power to recall an order founded upon fraud and misrepresentation is an inherent power of the Court.

Para 31: The present case is one such instance where the High Court has mislead by incorrect representations made by the University at the time of hearing of the writ petition and the review petition. The question was whether the post occupied by the appellant was entitled to be de-reserved as for six years no backward class candidate was available.

Para 32: We have already noticed that the statement made before the Court was not correct. The records also reveal that the interviews for the post of English Lecturer pursuant to the 6th advertisement were made on 5.7.1999 and no candidate belonging to the backward class turned up for interview. The University was fully aware of this as the University had on 1.11.1999 accepted the non-availability report. However, it mislead the Review Bench of the High Court by sating that no interviews were held. The review order dated 5.5.2005 was totally vitiated due to fraud which compel the appellant to file a fresh writ petition challenging the order of the University of Bombay calling for the 6th advertisement. However, the High Court by the impugned order dated 7.8.2005 dismissed the writ petition by relying on the dismissal of the earlier writ petition and review petition without appreciating that the previous orders had been founded upon fraudulent misrepresentations made by the University and the said orders were liable to be recalled.

Para 33: When fraud was clear on the fact of the record, the High Court erred in law in dismissing the writ petition of the appellant.

Offences - Perjury - False Affidavits, Statements, False Pleadings etc

Link:

http://thepracticeoflawjalan.blogspot.in/2012/04/offences-perjury-false-affidavits.html

Sandeep Jalan

Advocate

Law Referencer: https://www.vakeelkanumber.com/