Madras HC: Under which circumstances the court can direct forwarding of complaint to police under S 151 of CPC?

 In the case on hand, since, as I have already pointed out, the offence of forgery of Exs. A2 and A3 was committed outside the Court, even before they were produced before the Court, there can be no impediment for the police to register a case. When it was pointed out by this Court to the learned counsel on either side that this Court has power to issue a direction to the Tahsildar, Tambaram to forward a complaint to the police in respect of the above offence of forgery, for registration of a criminal case so as to investigate the same thoroughly to find out the real culprits, the learned counsel for the appellant submitted that such power is not available for this Court in a civil proceedings. Of course, it is true that there is no express provision in the Civil Procedure Code specifically empowering a Civil Court to issue a direction either to a party or to a witness to make a complaint to the police. But at the same time, it needs to be noted that there is no prohibition, either express or implied, thereby prohibiting a Civil Court from issuing any direction to a party or a witness to forward a complaint to the police when a serious offence of forgery is alleged. {Para 59}

 IN THE HIGH COURT OF MADRAS

Second Appeal No. 479 of 2012 and M.P. Nos. 1 and 2 of 2012

Decided On: 30.03.2015

N. Natarajan Vs. The Executive Officer

Hon'ble Judges/Coram:

S. Nagamuthu, J.

Citation: MANU/TN/0811/2015

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Fraud at the Courthouse Door: When Can Civil Courts Use Section 151 CPC to Set the Criminal Law in Motion?

 Why this question matters

Civil judges increasingly encounter forged documents, fabricated seals, and engineered “fraud on the court” designed to siphon public money or manipulate rights. The immediate civil response is clear: refuse or recall relief obtained by fraud. But a connected and difficult question is: can the civil court itself trigger criminal prosecution, and if so, when and how, under Section 151 CPC?

Supreme Court and High Court jurisprudence now fairly clearly recognises that inherent powers under Section 151 can be used to protect the integrity of judicial proceedings—including by undoing orders obtained by fraud and, in appropriate cases, by directing that serious independent forgeries be reported to the police. This operates alongside, and not in derogation of, the special mechanism for “offences against public justice” under Section 195/340 CrPC, now Section 215/379 BNSS.

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Supreme court: Whether bail granted on medical grounds can be sustained when the medical necessity is vague and non urgent?

Whether bail granted on medical grounds can be sustained when the medical necessity is vague and non urgent -- Held, bail granted on medical grounds must be based on credible, specific, and urgent need, not on general or future apprehensions, and if it is shown that a party obtained bail by misrepresentation or fraud, or by suppressing material facts, such bail is liable to be cancelled on that ground alone.

 Grant of bail on medical grounds -- Held, bail on medical grounds can be granted only in exceptional cases where the medical condition is serious, cannot be treated in custody, and necessary facilities are not available in jail

Per R. Mahadevan, J.

In Kalyan Chandra Sarkar v. Rajesh Ranjan, this Court cautioned that “bail on medical grounds can be granted only in exceptional cases where the medical condition is serious, cannot be treated in custody, and necessary facilities are not available in jail”. The burden to prove such necessity lies on the accused.

This Court has consistently held that bail granted on medical grounds must be based on credible, specific, and urgent need, not on general or future apprehensions. The discharge summary dated 28.11.2024 issued by the hospital, mentions that A2 is a patient with a history of diabetes, hypertension, and prior cardiac issues, and that he may require a CABG surgery in the future. However, the report does not indicate: any current emergency or need for immediate medical intervention; any life-threatening condition warranting urgent release; and any inability of the prison medical system to manage his current state. Thus, there is no compelling medical necessity for grant of bail. In Puran v. Rambilas, this Court held that "if it is shown that a party obtained bail by misrepresentation or fraud, or by suppressing material facts, such bail is liable to be cancelled on that ground alone".

 IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 3528-3534 of 2025 

Decided On: 14.08.2025

State of Karnataka Vs. Darshan and Ors.

Hon'ble Judges/Coram:

J.B. Pardiwala and R. Mahadevan, JJ.

Author: R. Mahadevan, J.

Citation: 2025 KHC 6693: 2025 INSC 979, MANU/SC/1098/2025.

Read full judgment here: Click here.

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When Your Own Signature Becomes a Crime: Understanding Forgery Under Section 464 of the Indian Penal Code

 A comprehensive analysis of how signing one's own name can constitute forgery under Indian criminal law

Introduction

In the realm of criminal law, forgery is traditionally understood as the act of falsifying someone else's signature or documents. However, the Indian Penal Code presents a fascinating and often misunderstood legal principle: a person can commit forgery by signing their own genuine name. This counterintuitive concept, enshrined in Section 464 {S 335 of BNS} Explanation 1 of the Indian Penal Code, challenges conventional understanding and highlights the sophisticated nature of Indian criminal jurisprudence.

The Legal Framework: Section 464 IPC Explained

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Supreme Court: The starting point of limitation to set aside or cancel an instrument, a contract or a decree on the ground of fraud is the date of knowledge of the alleged fraud

In Md. Noorul Hoda v. Bibi Raifunnisa and Ors.   MANU/SC/1414/1996 : (1996)7SCC767 , this Court held:

...There is no dispute that Article 59 would apply to set aside the instrument, decree or contract between the inter se parties. The question is whether in case of person claiming title through the party to the decree or instrument or having knowledge of the instrument or decree or contract and seeking to avoid the decree by a specific declaration, whether Article 59 gets attracted? As stated earlier, Article 59 is a general provision. In a suit to set aside or cancel an instrument, a contract or a decree on the ground of fraud, Article 59 is attracted. The starting point of limitation is the date of knowledge of the alleged fraud. When the plaintiff seeks to establish his title to the property which cannot be established without avoiding the decree or an instrument that stands as an insurmountable obstacle in his way which otherwise binds him, though not a party, the plaintiff necessarily has to seek a declaration and have that decree, instrument or contract cancelled or set aside or rescinded. Section 31 of the Specific Relief Act, 1963 regulates suits for cancellation of an instrument which lays down that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled. It would thus be clear that the word `person' in Section 31 of the Specific Relief Act is wide enough to encompass a person seeking derivative title from his seller. It would, therefore, be clear that if he seeks avoidance of the instrument, decree or contract and seeks a declaration to have the decrees set aside or cancelled he is necessarily bound to lay the suit within three years from the date when the facts entitling the plaintiff to have the decree set aside, first became known to him.

{See also Sneh Gupta v. Devi Sarup and Ors.   MANU/SC/0238/2009 : (2009)6SCC194 }

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1573 of 2009.

Decided On: 06.03.2009

Abdul Rahim and Ors. Vs. SK. Abdul Zabar and Ors.

Hon'ble Judges/Coram:

S.B. Sinha, A.K. Ganguly and R.M. Lodha, JJ.

Author: S.B. Sinha, J.

Citation:  MANU/SC/0379/2009.AIR 2010 SC 211.

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Supreme Court: Coverage for the purpose of Motor accident claim petition under Insurance policy would begin from the day the money (i.e. premium) was received by the Insurance Company

Another aspect in need of consideration is as to whether the liability of the Insurance Company under the insurance certificate/policy granted by it would cover the incident. This is in reference to the question as to the date and time from when the concerned vehicle would be deemed to be covered by the policy. In the present case, the incident occurred on 11.04.2017 at 14:15 hrs, whereas the insurance policy discloses that insurance was obtained at 15:54 hrs on 11.04.2017. In this regard, on facts, the MACT has found that the premium was paid/given prior to the accident and it was the internal procedure, due to which the policy was issued the next day and, thus, coverage under the policy would begin from the day the money (i.e. premium) was received by the Insurance Company. {Para 11}

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 15016-15017 OF 2024

NATIONAL INSURANCE COMPANY LTD. Vs  MAYA DEVI AND OTHERS 

Author: AHSANUDDIN AMANULLAH, J.

Citation:  2024 INSC 1050.

Dated: SEPTEMBER 02, 2024.

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Whether insurance Company can refuse to pay compensation to third party if certificate of Insurance was wrongly issued?

If a question of fraud or misrepresentation arises by and between the insurer and the insured, the third party claimant is not concerned therewith. A vehicle is required to be compulsorily insured in terms of the provisions of the Motor Vehicles Act, 1988. Keeping in view the aforementioned provisions, we are of the opinion that the learned tribunal has committed an error in going into the issue raised by the respondent No. 1. In our opinion, if according to the respondent No. 1, the contract of insurance did not come into force on 18-2-1992 and the certificate of insurance was wrongly granted either by reason of any mistake or fraud committed by either of the parties or by its officers, the remedy of the respondent No. 1 may be to initiate a separate proceeding for realisation of the amount so paid by it from the owner of the vehicle, but keeping in view the letter and spirit of the Motor Vehicles Act, we are of the opinion that a third party claimant should not suffer therefore.

 IN THE HIGH COURT OF CALCUTTA

Misc. Appeal No. 7 of 1995

Decided On: 31.07.1996

V. Ravi Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and S.K. Tiwari, JJ.

Author: S.B. Sinha, J.

Citation: MANU/WB/0032/1997, 1998ACJ598, AIR1997CAL242.

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Whether in claim petition, the Insurance company can take the defence that they are not liable to pay compensation as their agent has committed the fraud?

When admittedly Ganesan is the Agent of the Insurance Company and received the premium from Gurusamy and in fact that Gurusamy was also given a policy, we are shocked and surprised to see, how the Insurance Company can disown its liability, more so when it does not suspect the bona fides on the part of Gurusamy. It is not the case of the Insurance Company that as per rules/conditions of the Policy, whenever a client receives a Policy from the agent, he has to go over to the office and contact the -manager or any named officer to show the policy which he has received to ascertain its genuineness.{Para 9}

10. Let us turn to analyse the legal position. The word 'agent' is derived from the Latin word "agere" which means 'to do'. Thus, an agent is a person, who acts for another whether by express or implied consent. The general rule is that whatever a person may do himself, he may authorize another to do for him in accordance with the maxim "qui facit per alium facit per se " meaning he who does anything by another, does it by himself.

In Krishna v. Ganapathi, MANU/TN/0264/1955 : AIR1955Mad648 , a Division Bench of this Court explained the concept of agency in the following terms:

"An agent is thus a person either actually or by law held to be authorized and employed by any person to bring him into contractual or other legal relations with a third party. He is a representative vested with authority, real or ostensible to create voluntary primary obligations for his principal by making promises or representations to third person calculated to induce them to change their legal relations. Representative character and derivative authority may briefly be said to be the distinguishing feature of an agent."

(a) What House of Lords ruled way back on 19th July, 1912 in Lloyd v. Grace, Smith & Co. 1912 AC 716 would be relevant.  In that case, Lord Macnaghten expressed his view in the following terms,

"The only difference in my opinion between the case where the principal receives the benefit of the fraud, and the case where he does not, is that in the latter case the principal is liable for the wrong done to the person defrauded by his agent acting within the scope of his agency; in the former case he is liable on that ground and also on the ground that by taking the benefit he has adopted the act of his agent; he cannot approbate and reprobate."

Lord Shaw of Dunfermline agreed with Lord Macnaghten and further added the following,

"The case is in one respect the not infrequent one of a situation in which each of two parties has been betrayed or injured by the fraudulent, conduct of a third. I look upon it as a familiar doctrine as well as a safe general rule, and one making for security instead of uncertainty and insecurity in mercantile dealings, that the loss occasioned by the fault of a third person in such circumstances ought to fall upon the one of the two parties who clothed that third person as agent with the authority by which he was enabled to commit the fraud.

... I am aware of the approval given to this language in subsequent cases, as for instance in Ruben v. Great Fingall Consolidated, 1906 AC 439, by Lord Davey, and in British Mutual Banking Co. v. Charnwood Forest Rv. Co., 18 O.B.D. 714, by Lord Bowen. If I may respectfully do so, I tender my entire concurrence in the opinion Just delivered by my noble and learned friend Lord Macnaghten upon the dicta of Lords Davey and Bowen in these cases. But I do so subject to this - that I cannot bring myself to think that it was ever distinctly meant to be announced or suggested as law that, on the assumption that a person deals with an agent in good faith, and that the conduct of the agent is fully within the scope of his authority, then the principal of that agent is not responsible for the agent's fraud, by reason of the fact that the agent did not mean to 'benefit his principal by the fraud, but to benefit himself. That, in my opinion, is not the law. On the contrary, the principal is, in such circumstances, legally responsible for his agent's conduct."

The principal is liable for the fraud of his agent acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.

 IN THE HIGH COURT OF MADRAS

C.M.A. No. 55 of 1997

Decided On: 27.10.2003

The National Insurance Company Limited Vs. M. Nandan and Ors.

Hon'ble Judges/Coram:

A.S. Venkatachala Moorthy and S.R. Singaravelu, JJ.

Citations: II(2004)ACC645, 2004ACJ1449, 2004(2)CTC522, (2004)1MLJ146, MANU/TN/1923/2003.

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Can a Joint Secretary of a Cooperative Society be held liable for financial losses caused by a fraudulent loan applicant when the loan was sanctioned by the management committee?

 In the given facts and circumstances of the present case, it cannot be fathomed that Respondent No. 6 being the Joint Secretary of the Society and one of the office bearers of the Managing Committee can be solely held responsible and liable for disbursement of loan to a person who is not an employee of the Police Department. The most important aspect for consideration is the fact of due diligence in such a case. Appropriate enquiry and due diligence if carried out by those responsible to do so before recommending the application of such persons (Applicants) for loan sanction to the Managing Committee could have unearthed the genuineness of the Applicants. Therefore the role of Respondent No. 6 needs to be understood in its proper perspective. It is on record that a resolution to that effect was passed by the Society assigning and authorising individual Managing Committee members to sign the cheques of the loan amount which were signed by the Managing Committee. In that view of the matter, the entire Managing Committee is liable and responsible and not the member who has appended his signature on the cheque for disbursement of loan. If the Enquiry Officer has exonerated the other Managing Committee members then in that case indictment of Respondent No. 6 is high handed and arbitrary. All that is needed to be seen in the present case is that the Managing Committee members had been authorised by the Managing Committee to sign the cheques for disbursement of loan. In that view of the matter, it cannot be held that only Respondent No. 6 and three other members of the Committee are liable for causing financial loss to the Society and are liable for reimbursement of the said financial loss. It is reiterated that verification, due diligence and scrutiny of the application for seeking loan is the most important step which is verified by the Manager of the Society or those responsible who are entrusted with the said work and appointed by the Society for the same. This is a classic case where the Managing Committee has sanctioned the loan amount and an individual office bearer of the Managing Committee who has been entrusted with the responsibility and duty of signing the cheques is held responsible for disbursement of loan. This cannot be countenanced in the facts of the case. 

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 1475 of 2017

Decided On: 14.06.2023

Brihanmumbai Police Karmachari Sahakari Pat Sanstha Maryadit

Vs. State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Milind Narendra Jadhav, J.

Citation: MANU/MH/2099/2023.

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Questions and answers on law Part 55

Q 1:- Whether Judgment passed by supreme court can be challenged before civil court? If it can be challenged under which provision?

Ans: As per S 44 of The evidence Act, if said judgment was obtained from Supreme court by fraud.

Central Government Act

Section 44 in The Indian Evidence Act, 1872

44. Fraud or collusion in obtaining judgment, or incompetency of Court, may be proved.—Any party to a suit or other proceeding may show that any judgment, order or decree which is relevant under section 40, 41 or 42 and which has been proved by the adverse party, was delivered by a Court not competent to deliver it, or was obtained by fraud or collusion.

Q 2 :- Under Which provision of CPC ,The court can issue summons by Email?

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Whether the court should reject the plaint if there is no specific pleading regarding fraud?

7.7 Even the averments and allegations with respect to knowledge of the plaintiffs averred in paragraph 19 can be said to be too vague. Nothing has been mentioned on which date and how the plaintiffs had the knowledge that the document was obtained by fraud and/or misrepresentation. It is averred that the alleged fraudulent sale came to the knowledge of the plaintiffs only when the plaintiffs visited the suit property. Nothing has been mentioned when the plaintiffs visited the suit

property. It is not understandable how on visiting the suit property, the plaintiffs could have known the contents of the sale deed and/or the knowledge about the alleged fraudulent sale.

7.8 Even the averments and allegations in the plaint with respect to fraud are not supported by any further averments and allegations how the fraud has been committed/played. Mere stating in the plaint that a fraud has been played is not enough and the allegations of fraud must be specifically averred in the plaint, otherwise merely by using the word “fraud”, the plaintiffs would try to get the suits within the limitation, which otherwise may be barred by limitation. Therefore, even if the submission

on behalf of the respondents – original plaintiffs that only the averments and allegations in the plaints are required to be considered at the time of deciding the application under Order VII Rule 11 CPC is accepted, in that case also by such vague allegations with respect to the date of knowledge, the plaintiffs cannot be permitted to challenge the documents after a period of 10 years. By such a clever drafting and using the word “fraud”, the plaintiffs have tried to bring the suits within the period of limitation invoking Section 17 of the limitation Act. The plaintiffs cannot be permitted to bring the suits within the period of limitation by clever drafting, which otherwise is barred by limitation. 

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 500 OF 2022

C.S. Ramaswamy  Vs V.K. Senthil & Ors. 

Author: M.R. SHAH, J.

Dated: SEPTEMBER 30, 2022.

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Whether Court should Refer The Parties To Arbitration if There Is A Duality Of Expert Opinion As To The Genuineness Of the arbitration Agreement?

 Whereas, as regards the execution of the Joint Venture Agreement by Mr. Rajendra Parekh, by putting the signatures thereon, there is a duality of opinion. The State Examiner of Documents has opined that the disputed signatures appear to have been written by the person who wrote the specimen signatures. Ms. Nisha Menon, private expert, opined to the contrary.

49. The non-arbitrability of the dispute, in the backdrop of the allegations of fraud, has also been subjected to two tests. First, whether the alleged fraud affects the underlying contract, rendering it void. Two, whether the fraud is restricted to the affairs of the parties, inter se, without any implication in the public domain. To put it in other words, the civil aspect of fraud may legitimately form a subject matter of arbitration. However, the criminal aspect of fraud, which entails penal consequences, can only be adjudicated by a court of law. In contemporary arbitration, the broad proposition that the allegations of fraud are non-arbitrable is not favoured. If an allegation of fraud can be adjudicated upon before a civil court, there is no justifiable reason to exclude such disputes from being resolved through arbitration.

64. In such circumstances, the course adopted by the Supreme Court in the case of Pravin Electricals (Supra) by directing the Arbitrator to first determine as to whether the arbitration agreement exists between the parties in the light of the defence rooted in the fraud and forgery, as a preliminary issue, appears expedient. 

 IN THE HIGH COURT OF BOMBAY

Arbitration Application No. 72 of 2013

Decided On: 06.05.2022

Atul & Arkade Realty (Previously known as Atul Real Estate Holding)  Vs. I.A. & I.C. Private Limited and Ors.

Hon'ble Judges/Coram:

N.J. Jamadar, J.

Citation: MANU/MH/1607/2022

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Can the High Court set aside the award of a Lok Adalat on the ground of fraud unless the objector proves the allegation of fraud?

  It is a settled position of law that where an allegation of fraud is made against a party to an agreement, the said allegation would have to be proved strictly, in order to avoid the agreement on the ground that fraud was practiced on a party in order to induce such party to enter into the agreement. Similarly, the terms of a compromise decree, cannot be avoided, unless the allegation of fraud has been proved. In the absence of any conclusive proof as to fraud on the part of the objectors, the High Court could not have set aside the compromise decree in the instant case. {Para 35}

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3486-3488 OF 2022

K. SRINIVASAPPA & ORS. VS. M. MALLAMMA & ORS. 

Author: NAGARATHNA J.

Dated: 18th MAY, 2022.

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Can the court restrain the invocation of a bank guarantee if it is not in terms of a bank guarantee?

 Courts are usually slow to interfere with the transaction between a bank and the beneficiary which is seen as being independent of the underlying contract between the lender and the supplier unless conditions call for such interference. The three conditions, as accepted in several decisions, are fraud of an egregious nature; special equities or the invocation not being in terms of the bank guarantee. It is sufficient if a party seeking a restraint on the invocation is able to establish any one of the three requirements. The test of special equity or irrevocable injustice is a matter of an assessment by a court on the particular facts presented to it for stay on a notice of invocation. The injury or injustice must be irrevocable, irremediable and irreversible : Refer : State Bank of India v. Sun Pharmaceuticals Industries Ltd. : AIR 2019 Cal 385. The party seeking an order for restraint must show that the invocation and consequent payment by the bank to the intended beneficiary would set the party back-irreversibly-in monetary terms which may not be recovered in the foreseeable future. {Para 25}

26. In the present case, the petitioner has satisfied two of the three ingredients, namely special equity and the invocation not being in terms of the guarantee. The clauses in the contract and more particularly the GCC clearly demonstrate that the bank guarantee was furnished towards performance security. There can be no issue with regard to performance since the petitioner has already received 90% of the contract price as discussed above. The invocation letter also demonstrates that there cannot be any performance issue with regard to the supplies effected by the petitioner. The invocation letter does not contain any allegation of a breach of performance obligations by the petitioner. The special equity also stands satisfied by reason of the petitioner facing an immediate and irreversible financial loss if the payment is made by Citibank NA, Dhaka to the respondent No. 1 in terms of the Letter of Invocation. 

 In the High Court of Calcutta

(Before Moushumi Bhattacharya, J.)

KSE Electricals Pvt. Ltd Vs Project Director, Bangladesh Rural Electrification Board

A.P. 230 of 2021

Decided on November 23, 2021,

Citation: 2021 SCC OnLine Cal 2986

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Can the court annul the marriage if the wife suppresses her mental illness before her wedding?

  The fact that the parties could not live together beyond nine weeks itself shows that the mental disorder suffered by the respondent is of a kind, and to such an extent as to be unfit for marriage and the procreation of children. It is not the case of the respondent that either of the conditions enumerated in Section 12(2)(a)(i), or (ii) exists in the present case, which would have debarred the appellant from seeking annulment of marriage on the ground contained in Section 12(1)(b) of the Hindu Marriage Act. That is not the defence set up by her, or established by her. The failure on the part of the respondent to disclose her mental disorder before her marriage with the appellant – as alleged by him, constituted a fraud perpetrated upon the appellant. Apart from stating that the parties had met a few times before the marriage, the respondent has not specifically averred, or established, that the appellant was made aware of the mental disorder suffered by the respondent, which was passed-off by her as mere “headaches”. Headaches–by themselves are not a disease. They are only symptoms of a disease. The Respondent does not state what caused her such serious and frequent headaches, which debilitated her from completing her studies. {Para 49}

 IN THE HIGH COURT OF DELHI AT NEW DELHI 

 MAT. APP. (F.C.) 142/2020

 SANDEEP AGGARWAL Vs PRIYANKA AGGARWAL

CORAM:  MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE JASMEET SINGH

 Author: JASMEET SINGH, J

Dated: Pronounced on: 24.12.2021 

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Can a civil court entertain a suit if the plaintiff is pleading fraud without material particulars if it is barred as per S 34 of the SARFAESI Act?

 Having considered the pleadings and averments in the suit more particularly the use of word ‘fraud’ even considering the case on behalf of the plaintiff, we find that the allegations of ‘fraud’ are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved.{ Para 8}

Supreme Court

JUSTICE M. R. SHAH JUSTICE SANJIV KHANNA

Electrosteel Castings Limited Vs. UV Asset Reconstruction Company Limited & Ors.

CIVIL APPEAL NO.6669 OF 2021

26th November 2021

Author: M. R. Shah, J.

Citation: 2021 ALL SCR (ONLINE) 697

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Whether court can permit a party to adduce oral evidence regarding written agreement?

This Court in Gangabai v. Chhabubai [(1982) 1 SCC 4 :

AIR 1982 SC 20] and Ishwar Dass Jain v. Sohan Lal [(2000) 1

SCC 434 : AIR 2000 SC 426] with reference to Section 92(1)

held that it is permissible to a party to a deed to contend

that the deed was not intended to be acted upon, but was

only a sham document. The bar arises only when the

document is relied upon and its terms are sought to be

varied and contradicted. Oral evidence is admissible to

show that document executed was never intended to

operate as an agreement but that some other agreement

altogether, not recorded in the document, was entered into

between the parties.” (Emphasis Supplied) {Para 22}

27. A perusal of the above judgment would show that the oral evidence of a written agreement is excluded except when it is

 sought to be alleged the document as a sham transaction.

28. It is beyond dispute that a sale deed is required to be registered i.e. a document required by law to be reduced to the form of a document. Therefore, no evidence of any oral agreement or statement shall be admitted for the purpose of contradicting, varying, adding or subtracting from its terms. The proviso (1) of Section 92 of the Evidence Act on which reliance was placed is a proof of such fact which would invalidate any document such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law. Section 92 of the Evidence Act reads as under:

“92. Exclusion of evidence or oral agreement. - When the

terms of any such contract, grant or other disposition of

property, or any matter required by law to be reduced to

the form of a document, have been proved according to the

last section, no evidence of any oral agreement or

statement shall be admitted, as between the parties to any

such instrument or their representatives in interest, for the

purpose of contradicting, varying, adding to, or subtracting

from, its terms:

Proviso (1).—Any fact may be proved which would

invalidate any document, or which would entitle any person

to any decree or order relating thereto; such as fraud,

intimidation, illegality, want of due execution, want of

capacity in any contracting party, want or failure of

consideration, or mistake in fact or law.”

29. The respondents were free to prove fraud in execution of the sale deed. However, factually, the respondents have not alleged any  fraud in their suit or in the written statement in the suit filed by appellant No. 1. The feigned ignorance about the nature of document cannot be said to be an instance of fraud. In the

absence of any plea or proof of fraud, respondent No.1 is bound by the written document on which he admitted his signatures and of his wife. There is no oral evidence which could prove fraud, intimidation, illegality or failure of consideration to permit the respondents to lead oral evidence to dispute the sale deed dated 14.9.1970. Therefore, the judgments referred to by Mr. Mehta are of no help to support his arguments. Thus, the findings recorded by the First Appellate Court as affirmed by the High Court are clearly erroneous in law and are, thus, set aside.

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1491 OF 2007

PLACIDO FRANCISCO PINTO (D) by LRs  Vs JOSE FRANCISCO PINTO

Author: HEMANT GUPTA, J.

Dated: SEPTEMBER 30, 2021.

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Whether the civil court has jurisdiction to try the suit in respect of parties' civil rights beyond the jurisdiction of DRT?

Keeping in mind the principles as laid down in Dhulabhai (supra), and what we have considered and discussed above, when we ask ourselves a question as to whether the DRT exercising jurisdiction under Sections 13 and 17 of the SARFAESI Act, has the power, nay jurisdiction to determine the Civil Law rights, which may be available to a person, in the security interest, in the same manner as a Civil Court could ? or in other words, can a person who claims a right of partition, specific performance, reliefs under Sections 31 and 34 of the Specific Relief Act, preemption, redemption, declaration in respect of a property which is a security interest, approach the DRT for claiming adjudication of his such claim ? and can the DRT grant him such relief ? In our considered opinion, the answer has to be in the negative for the reason that it is not permissible for the DRT to embark on an adjudication of the civil rights claimed vis-a-vis the security interest, in light of the clear, precise and specific language of Section 17 (1) and 18 of the DRT Act read with Sections 13, 17 and 34 of the SARFAESI Act, as already discussed above.

 If the DRT is not a Court as held in Nahar Industrial Enterprises Limited (supra), which still holds the field, and the jurisdiction of the DRT is limited and is confined to the extent of examination of the actions of the secured creditor under Section 13 (4) and Section 17 of the SARFAESI Act, within the framework of Sections 17 and 19 of the DRT Act 1993, then the DRT is jurisdictionally incapable and incompetent to adjudicate and decide upon the rights of a civil nature, accruing in favour of citizens, even if such rights are found to be accruing or created by law or otherwise, in the security interest. The jurisdiction to adjudicate and decide such rights of a civil nature, would then continue to vest with the Civil Courts under Section 9 of the C.P.C., whose jurisdiction though otherwise is plenary, omnipotent and unlimited, is limited only by the exclusion clause/provision in various Statutes, which exclusion clause/provision has to be strictly construed.

24. The purpose of creation of the Special Statutes i.e. the SARFAESI Act and the DRT Act, 1993, was to facilitate creation of special machinery for speedy recovery of the debts, due to Banks and Financial Institutions, which had gained alarming proportions and  still are alarmingly high, and not to obviate or set at naught the civil rights as available to litigants by availing the Civil Law remedy.

25. A meaningful interpretation has to be put to the language of the bar as contained in Section 34 of the SARFAESI Act so that the object and purpose sought to be achieved by the Act is not rendered illusory and is fulfilled. However, at the same time, the civil rights, which may be available in respect of security interest, cannot be lost sight of, which also have to be protected and the common law remedy available for the enforcement cannot be rendered ineffective. No doubt, Section 34 by creating a bar of jurisdiction ensures the recovery of public money in a speedy manner, however, the bar has to be read and construed in light of the language it contains and not otherwise so as to impeach upon the rights of a civil nature as available, which are equally important for a citizen. In the zeal to ensure speedy recovery of money, the civil rights which a citizen has, cannot be permitted to be rendered redundant and balance between both the rights has to be maintained, which would only be possible on a case to case basis. The bar under Section 34 of the SARFAESI Act, therefore, in view of the discussion made above, in our considered opinion, is not absolute, but is restricted to examination by the DRT of the actions of the secured creditor under Section 13 of the SARFAESI Act and the rights available under Section 17 of the SARFAESI Act, to be in accordance with the provisions of the SARFAESI Act and the Rules made thereunder, as indicated.

26. The propositions laid down in para 33 of Sagar Pramod Deshmukh (supra), in our considered opinion, correctly define the distinction between the jurisdiction of the Civil Court and that of the DRT vis-a-vis Section 9 of the C.P.C., as compared to Sections 17 (1) and 18 of the DRT Act read with Sections 13, 17 and 34 of the SARFAESI Act, though they may not be exhaustive.

27. In view of what we have discussed above, our considered opinion to the question as referred to is as under :-

Question :

"Whether the jurisdiction of a Civil Court to decide all the matters of civil nature, excluding those to be tried by the Debts Recovery Tribunal under Section 17 of the Securitisation Act, in relation to enforcement of security interest of a secured creditor, is barred by Section 34 of the Securitisation Act ?

 Answer :

The answer, looking to the nature of the question, in our view, is in parts :-

(A) Jurisdiction of the Debts Recovery Tribunal, to decide all matters relating to Sections 13 and 17 of the SARFAESI Act, is exclusive.

(B) In all cases, where the title to the property, in respect of which a 'security interest', has been created in favour of the Bank or Financial Institution, stands in the name of the borrower and/or guarantor, and the borrower has availed the financial assistance, it would be only the DRT which would have exclusive jurisdiction to try such matters, to the total exclusion of the Civil Court. Any pleas as raised by the borrowers or guarantors, vis-a-vis the security interest, will have to be determined by the DRT.

(C) The jurisdiction of the Civil Court to decide all the matters of civil nature, excluding those to be tried by the Debts Recovery Tribunal under Sections 13 and 17 of the SARFAESI Act, in relation to enforcement of security interest of a secured creditor, is not barred by Section 34 of the SARFAESI Act.

(D) Where civil rights of persons other than the borrower(s) or guarantor (s) are involved, the Civil Court would have jurisdiction, that too, when it is prima facie apparent from the face of record that the relief claimed, is incapable of being decided by the DRT, under Section 17 of the DRT Act, 1993 read with Sections 13 and 17 of the  SARFAESI Act.

(E) Even in cases where the enforcement of a security interest involves issues as indicated in Mardia Chemicals (supra) of fraud as established within the parameters laid down in A. Ayyasamy (supra); a claim of discharge by a guarantor under Sections 133 and 135 of the Contract Act [Mardia Chemicals (supra)]; a claim of discharge by a guarantor under Sections 139, 142 and 143 of the Contract Act; Marshaling under Section 56 of the Transfer of property Act [J.P. Builders (supra)]; the Civil Court shall have jurisdiction.

(F) Examples as indicated in para 22.3, are illustrative of the Civil Court's jurisdiction.

(G) The principles laid down in para 33 (i) to (ix) of Sagar Pramod Deshmukh (supra) are in accordance with what we have discussed and held above.

 

 Bombay High Court

Bank Of Baroda, Through Its Branch ... vs Gopal Shriram Panda And Another on 25 March, 2021

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Whether consent decree will operate as estoppel if fraud, misrepresentation, or mistake vitiate compromise?

This Court’s Analysis

18. Before adverting to the specific contentions raised by the

learned senior counsel for the Petitioner, it may be useful to briefly summarise the law governing consent decrees that shall inform our conclusions on the present matter. It is well settled

that consent decrees are intended to create estoppels by judgment against the

parties, thereby putting an end to further litigation between the

parties. Resultantly, this Court has held that it would be slow to

unilaterally interfere in, modify, substitute or modulate the terms of

a consent decree, unless it is done with the revised consent of all

the parties thereto. (Gupta Steel Industries v. Jolly Steel

Industries Pvt. Ltd. & anr., (1996) 11 SCC 678; Suvaran

Rajaram Bandekar & ors. v. Narayan R. Bandekar & ors.,

(1996) 10 SCC 255).

19. However, this formulation is far from absolute and does not

apply as a blanket rule in all cases. This Court, in Byram Pestonji Gariwala v. Union Bank of India & ors., (1992) 1 SCC 31, has held that a consent decree would not serve as an estoppel, where

the compromise was vitiated by fraud, misrepresentation, or

mistake. Further, this Court in the exercise of its inherent powers

may also unilaterally rectify a consent decree suffering from clerical

or arithmetical errors, so as to make it conform with the terms of

the compromise.

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NOS. 2224-2225

OF 2021

COMPACK ENTERPRISES INDIA (P) LTD.  Vs BEANT SINGH 

Author: MOHAN M. SHANTANAGOUDAR, J. 

Dated: FEBRUARY 17, 2021

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How to ascertain limitation for filing partition suit under Muslim law?

 The estate of a deceased Mohamedan devolves on his heirs at the moment of his' death. The heirs succeed to the estate as tenants in common in specific shares. Where the heirs continue to hold the estate as tenants in common without dividing it and on of them subsequently brings a suit for recovery of the share the period of limitation for the suit does not run against him from the date of the death of the deceased but from the date of express ouster or denial of title and Article 144 of Schedule 1 to the Limitation Act, 1908 would be the relevant Article.

The cause of action for partition of properties is said to be a perpetually recurring one" See Monsharam Chak-ravarty & Ors. v. Gonesh Chandra Chakravarty & Ors. (2). In Mohammedan Law the doctrine of partial partition is not applicable because the heirs are tenants-in-common and the heirs of the deceased Muslim succeed to the definite fraction of every part of his estate. The share,,, of heirs under Mohamedan Law are definite and known before actual partition. Therefore on partition of properties belonging to a deceased Muslim there is division by metes and bounds in accordance with the specific share of each heir being already determined by the law.

Supreme Court of India

Syed Shah Ghulam Ghouse Mohiuddin ... vs Syed Shah Ahmed Moriuddin Kamisul ... on 17 February, 1971

Equivalent citations: 1971 AIR 2184, 1971 SCR (3) 734

Bench: Ray, A.N.

           
BENCH:
RAY, A.N.
MITTER, G.K.

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