In the case of S. P. Chengalvaraya Naidu (dead) by LRS. vs. Jagannath (dead) by LRS. & Ors.1, the Hon'ble Apex Court has warned against permitting the process of the Court becoming an engine of fraud in the hands of dishonest litigations. The Apex Court has observed that the Courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. The Hon'ble Apex Court expressed concern that more often than, not, the process of the Court is being abused. Property-
grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. The Apex Court has ruled unhesitatingly that a person, whose case is based on falsehood, has no right to approach the court and can be summarily thrown out at any stage of litigation.
The aforesaid position was reiterated by the Hon'ble Supreme Court in the case of A. V. Papayya Sastry & Ors. vs. Govt. of A.P. & 1 (1994) 1 SCC 1 In the context of the observation of the High Court in the case of S. P. Chengalvaraya Naidu (supra) 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 Hon'ble Apex Court in the case of A. V. Papayya Sastry (supra) quoted with approval the observations in paragraph 5 of S. P. Chengalvaraya Naidu (supra). The relevant observations read thus :
"28. Allowing the appeal, setting aside the judgment of the High Court and describing the observations ig of the High Court as "wholly perverse", Kuldip Singh, J. stated : (SCC p.5, para 5) "The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to 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."
[Emphasis supplied] 17] In the context of commission of fraud by obtaining consent decrees in order to defeat the right of the mortgagee bank, the Hon'ble Supreme Court in the case of Ram Chandra Singh vs. 2 (2007) 4 SCC 221 Savitri Devi & Ors. (2003) 8 SCC 3193 has held that 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 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. 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 ensues 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 others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous.
Although in a given case a deception may not amount to fraud, fraud is 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.
Bombay High Court
M/S. Mountain Villas vs Dy. Registrar Co-Operative ... on 5 February, 2016
Bench: M.S. Sonak
Citation:2016(2) ALLMR447
WRIT PETITION NO. 11679 OF 2014
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