The nature of 'fraud' which may entitle a party to the suit to nullify the judgment therein by another suit has been considered in a long line of decisions; and it is now well settled that fraud to be a ground for vacating a judgment must be extrinsic or collateral to the adjudications involved in the judgment and not been, or deemed to have been, dealt with by the court in the impugned judgment.
10. In Flower v. Lloyd, (1879) 10 Ch. D. 327, James L. J., with the concurrence of Thesiger L. J., observed :
"Assuming all the alleged falsehood and fraud to have been substantiated, is such a suit as the present sustainable? That question would require very grave consideration indeed before it is answered in the affirmative. Where is litigation to end if a judgment obtained in an action fought out adversely between two litigants sul juris and at arm's length could be set aside by a fresh action on the ground that perjury had been committed in the first action, or that false answers had been given to interrogatories, or a misleading production of documents, or of a machine, or of a process had been given? There are hundreds of actions tried every year in which the evidence is irreconcilably conflicting, and must be on one side or other wilfully and corruptly perjured. In this case, if the plaintiffs had sustained on this appeal the judgment in their favour, the present defendants, in their turn, might bring a fresh action to set that judgment aside on the ground of perjury of the principal witness and subornation of perjury; and so the parties might go on alternately ad infinitum. There is no distinction in principle between the old Common law action and the old Chancery suit, and the Court ought to pause long before it establishes a precedent, which would or might make in numberless cases judgments supposed to be final only the commencement of a new series of action. Perjuries, falsehoods, frauds, when detected, must be punished and punished severely, but in their desire to prevent parties litigant from obtaining any benefit from such foul means, the Court must not forget the evils which may arise from opening such new sources of litigation, amongst such evils not the least being that it would be certain to multiply indefinitely the mass of those very perjuries, falsehoods, and frauds".
Kerala High Court
Papavinasom Subrahmoniam vs Daivani Nagaramma And Ors. on 7 February, 1962
Equivalent citations: AIR 1963 Ker 26
1. The appellant is the 3rd defendant in a suit to set aside the decrees in O. S. No. 81 of 1100 on the file of the District Court, Nagereoil, and O. S. No. 17 of 1101 on the file of the District Court, Trivandrum, as also the execution proceedings had thereon as (sic) been affected by fraud and for recovery of the plaint property with mesne profits.(2) The facts are as follows :
The 2nd defendant was the foreman of a chitty started in 1096 in which the 1st defendant's father was a suts-criber who prized his ticket and executed the bond, Ext. C, mortgaging the plaint property to secure due payment of future subscriptions. For amounts due to the plaintiff by the foreman, he assigned the said bond to her in 1098 (Vide Exts. E and F dated 11-11-1098 and 7-12-1098). The 3rd defendant, professing to be a subscriber in the abovesaid chitty, instituted O. S. No. 81 of 1100 on the file of the District Court, Nagereoil, for paid up subscriptions, and in execution of the decree obtained therein purchased the rights under Ext. C. He then filed O. S. No. 17 of 1101 in the District Court, Trivandrum, to enforce the bond, with the present plaintiff also as a party thereto, obtained decree and purchased the suit property in court-sale. The plaintiff thereupon instituted this suit on 24-5-1113 for a declaration that the aforesaid two decrees and their execution proceedings were fraudulent and therefore invalid as against her.
The defendants contended that the proceedings were lawful and valid and denied any fraud having been played in regard thereto.
The court below decreed the suit. Hence this appeal.
3. The fraud alleged was twofold, namely (i) setting up a false claim in a suit, and (ii) getting it decreed by fraudulent contrivances.
The latter aspect need not detain us long. The fraudulent contrivance complained of is of the 2nd defendant having induced the plaintiff to sign a vakalath and some blank papers for use in O. S. No. 17 of 1101 and to pay Rs. 300/- to him for exppenses, all of which she readily did, on the representation that she could thereby easily realise her money in that suit itself. She pleads that she made frequent enquiries with the 2nd defendant, but never communicated with her counsel about the case for about 12 years, till she went over to Trivandrum in Meenam 1112 and came to know of the decree and execution sale had in the case.
4. Ext, J is the vakalath executed by the plaintiff and Ext. K her written statement in O. S. No. 17 of 1101. The vakalath bears an endorsement that she was known to counsel and signed the same before him; and the written statement bears the same date as the vakalath and is countersigned by counsel. If anything could be inferred from Exts. J and K, it can only be that they were prepared and filed in court simultaneously under advice of counsel.
5. In Ext. K. she had conceded the claim in the suit (O. S. No. 17 of 1101) and stated that she would take other appropriate proceedings for realisation of her dues from the 2nd defendant. This plea cannot by itset spell out any fraud been played on her. Ext. C is an asset of the chitty which must naturally be available for the liabilities of that chitty. The plaintiff was not a creditor in respect of the chitty. Section 28 of the Travancore Chitties Act, 1094, provided :
"Any voluntary or involuntary transfer of the rights of a foreman to receive subscriptions from prized subscribers shall, if if defeats or delays a non-prized or unpaid prized subscriber, be voidable at the instance of such subscriber."
The assignment of Ext. C in favour of the plaintiff came obviously within the purview of that section. The written statement is countersigned by counsel and was filed in court on 28-8-1101. The judgment in the case is Ext. Ill herein, and is dated 19-11-1105. Plaintiff never repudiated her written statement, although the suit was pending trial for more than four years after submission thereof. Ext. Ill shows that throughout the trial of the case, counsel appeared for her. In these circumstances it is difficult to believe that she was the victim of a fraud in the conduct of O. S. No. 17 of 1101.
6. Further, fraud to avoid a judgment, must be of the person who secured the judgment in his favour by means of such fraud unless it be a judgment in rem available against all the world.
"Though in most cases a judgment obtained by fraud can be set aside only as against the person guilty of the fraud, this limitation does not apply to an action to set aside a judgment granting probate of a will, inasmuch as a will must be good or bad against all the world. Birch v. Birch 1902 P. 130" (Kerr on Fraud and Mistake, 7th Edn., p. 417).
Here the judgment in O. S. No. 17 of 1101 is obtained by the 3rd defendant. There is no allegation of fraud on the part of the 3rd defendant except that he had set up a false claim in O. S. No. 81 of 1100 which ultimately culminated tn the court-sale had in O. S. No. 17 of 1101. There is no case that he had in any way prevented the plaintiff from properly defending O. S. No. 17 of 1101. It has therefore to he held that a case of fraud sufficient to set aside the decree and execution sale in O. S. No. 17 of 1101 has not been made' out by the plaintiff.
7. The material complaint of the plaintiff is that the 3rd defendant was not a subscriber to the concerned chitty, and had nothing to be realised from the 2nd defendant, and therefore the claim he advanced in O. S. No. 81 of 1100 was a false one. It is in execution of the decree obtained on such a false claim that he purchased the chitty bond, Ext. C, and in enforcement of that bond in O. S. No. 17 of 1101 purchased the suit properly. The bone of contention, therefore, is the falsity of the claim that formed the basis of the decree in O. S. No. 81 of 1100.
8. It is often said that fraud vitiates the most solemn proceedings of courts of justice. Lord Coke said, it avoids all judicial acts. Statutory recognition is given to this principle in Section 44 of the Evidence Act which allows a party to a suit or other proceeding to show that a judgment, order or decree proved against him was obtained by fraud or collusion so as to nullify its effect on him. But, equally well settled is the principle that a judicial decision is conclusive inter paries on the matter decided; or, in other words, a matter decided is decided once for all, This principle of res judicata also finds statutory expression in Section 11, Code of Civil Procedure. It then becomes necessary to reconcile these two principles in their application in practice.
9. The nature of 'fraud' which may entitle a party to the suit to nullify the judgment therein by another suit has been considered in a long line of decisions; and it is now well settled that fraud to be a ground for vacating a judgment must be extrinsic or collateral to the adjudications involved in the judgment and not been, or deemed to have been, dealt with by the court in the impugned judgment.
10. In Flower v. Lloyd, (1879) 10 Ch. D. 327, James L. J., with the concurrence of Thesiger L. J., observed :
"Assuming all the alleged falsehood and fraud to have been substantiated, is such a suit as the present sustainable? That question would require very grave consideration indeed before it is answered in the affirmative. Where is litigation to end if a judgment obtained in an action fought out adversely between two litigants sul juris and at arm's length could be set aside by a fresh action on the ground that perjury had been committed in the first action, or that false answers had been given to interrogatories, or a misleading production of documents, or of a machine, or of a process had been given? There are hundreds of actions tried every year in which the evidence is irreconcilably conflicting, and must be on one side or other wilfully and corruptly perjured. In this case, if the plaintiffs had sustained on this appeal the judgment in their favour, the present defendants, in their turn, might bring a fresh action to set that judgment aside on the ground of perjury of the principal witness and subornation of perjury; and so the parties might go on alternately ad infinitum. There is no distinction in principle between the old Common law action and the old Chancery suit, and the Court ought to pause long before it establishes a precedent, which would or might make in numberless cases judgments supposed to be final only the commencement of a new series of action. Perjuries, falsehoods, frauds, when detected, must be punished and punished severely, but in their desire to prevent parties litigant from obtaining any benefit from such foul means, the Court must not forget the evils which may arise from opening such new sources of litigation, amongst such evils not the least being that it would be certain to multiply indefinitely the mass of those very perjuries, falsehoods, and frauds".
In Baker v. Wadsworth, (1898) 67 LJ QB 301, it is held that a judgment obtained in an action will not be set aside in 3 subsequent action brought for that purpose upon mere proof, that the judgment was obtained by perjury.
Kerr on Fraud and Mistake (7th Edn. page 417) also observes :
"The court has jurisdiction to set aside a judgment obtained by fraud in a subsequent action brought for that purpose, the proper remedy being an original action and not a rehearing; but such a judgment will not be set aside upon new proof that the judgment was obtained by perjury."
This is obviously the English law on the subject.
11. Jenkins C. J, in Nanda Kumar v. Ram Jiban, ILR 41 Cal 990 : (AIR 1914 Cal 232), observed :
"The jurisdiction to impugn a previous decree for fraud is beyond question ..... but it is a jurisdiction to be exercised with care and reserve, for it would be highly detrimental to encourage the idea in litigants that the final judgment in a suit is to be merely a prelude to further litigation."
Sadasiva Ayyar J. also, in his order of reference in Kadirvelu Nainar v. Kuppuswami Naiker, ILR 41 Mad 743: (AIR 1919 Mad 1044) (FB), observed liXewise that
"In India the considerations mentioned by James L. J. In (1879) 10 Ch D 327, apply with very great force as it is dangerous to allow a fresh suit to be brought' by an unsuccessful litigant to set aside the decree passed against him on the ground that his opponent had imposed on the court by letting in perjured evidence."
When the case came before the Full Bench, their Lordships approved the dictum in L. Chinnayya v. K. Ram-anna, ILR 38 Mad 203 : (AIR 1916 Mad 3G4), Janki Kuar v. Lachmi Narain, ILR 37 All 535: (AIR 1915 All 400) and Moruful Huq v. Surendra Nath Roy, 16 Cal WN 1002, that a suit does not lie to set aside a judgment on the ground that it had been obtained by perjured evidence.
12. In Mahomed Golab v. Mahomed Suliman, ILR 21 Cal 612, Sir Comer Petheram C. J. followed, (1879) 10 Ch D 327 and observed :
"Where a decree has been obtained by a fraud practised upon the other side by which he was prevented from placing his case before the tribunal which was called upon to adjudicate upon it in the way most to his advantage, the decree is not binding upon him, and the decree may, be set aside by a Court of Justice in a separate suit and not only by an application made in the suit in which the decree was passed to the court by which it was passed, but I am not aware that it has ever been suggested in any decided case, and in my opinion it is not the law, that because a person against whom a decree has been passed alleges that it is wrong and that it was obtained by perjury committed, by or at the instance of, the other party, which is of course fraud of the worst kind, that he can obtain a rehearing of the questions in dispute in a fresh action by merely changing the form in which he places it before the Court, and alleging in his plaint that the first decree was obtained by the perjury of the person in whose favour it was given. To so hold would be to allow defeated litigants to avoid the operation, not only of the law which regulates appeals, but that of that which relates to res judicata as well."
This decision has been followed in Abdul Haque v. Abdul Hafeez, 14 Cal WN 693, 16 Cal WN 1002, Kunja-behari v. Krishnadhone, AIR 1940 Cal 489 and Durgapati, Banerjee V. Taharulla, AIR 1941 Cal 215.
13. In AIR 1941 Ca! 215, Edgley J. reviewed the precedents on the matter and concluded that a plaintiff is not entitled to have a decree against him set aside on the ground that it had been fraudulently obtained merely by reason of the fact that the claim in the original suit was false, or without any cause of action, or merely because the decree was obtained by false representation or suppression of facts provided the person so applying for a reversal of the decree in the original suit was not prevented by the fraud of the decree-holder from placing his case before the court.
A week later, Mitter J. and Roxburgh J. also expressed the same view in AIR 1940 Cal 489 and held :
"We are accordingly of opinion that a domestic judgment cannot be reopened where the only allegation of fraud made by the plaintiff of the later action is that judgment had been given on a false claim. That allegation in substance means that the former adjudication was wrong, the Court determining on perjured evidence-the claim as true which was in fact a false one. The principle of finality of litigation which is the cardinal principle applicable in the domestic forum would then have no meaning.
In the case of a domestic judgment falsity of the claim, in our judgment, may be one of the material facts only in a limited class of cases, namely where the judgment was an ex parte one where no summons had been served and the direct proof falls short of actual suppression of summons".
14. The Patna High Court in Kripasindhu v. Nandu Charan, 56 Ind Cas 606 : (AIR 1920 Pat 831), has also held in similar circumstances :
"The whole case is before the court which has decided it on the pleadings and on the evidence, ana whether the case was a false one or not, and whether the evidence adduced is perjured evidence or not, the Court must be held to have adjudicated on both these points and once having adjudicated, it cannot be asked to adjudicate again,"
15. In ILR 37 All 535 : (AIR 1915 All 400), it is observed :
"The present suit, therefore, is a suit based on the ground that a decree in the previous suit had been obtained by perjured and false evidence. That in our opinion is not a sufficient ground which would justify a party, who or whose predecessor-in-title was a party to the previous suit, to bring a subsequent suit with the object of setting aside the decree in the former suit."
Basdevanand Gir v. Shantanand, AIR 1942 All 302, also expressed the same view :
"The rule that a title once settled by a decision should not be questioned again between the same parties is intended not only to prevent a new decision but also to prevent a new investigation so that the same person cannot be harassed again and again in various proceedings upon the same question, A decree cannot be set aside merely because it was obtained by perjured evi-dence because, If the contrary were held, it would be necessary to hold new investigation again and again into the same question. It would be most unsafe to hold that a decree can be set aside on the ground that the defendant did not raise a plea which was open to him, because he did not know alt the necessary facts, or on the ground that the plea set up was false to the know ledge of the plaintiff".
16. In ILR 38 Mad 203 : (AIR 1916 Mad 364), Benson J. and Sundara Ayyar J. observed :
"The respondent contends that, on the finding of the lower courts, the evidence given on oath by the defendant at the trial of Original Suit No. 16 was perjured testimony and a decree obtained by perjured evidence may be set aside on the ground of fraud. It is indisputable that a decree may be vacated on the ground that it was obtained by the successful party by fraud. The question is what would amount to fraud which would entitle an unsuccessful litigant to get the decree vacated. He cannot, it is clear, be allowed to get round the rule of res judicata and to prove that the judgment given by the court was wrong because it came to a wrong conclusion on the evidence before it. It follows from this that the Court's conclusions both on the construction to be put on the evidence placed before it and on the inference to be drawn from such evidence as well as on the trustworthiness of the evidence should be regarded as final. If the Court acts erroneously informing its judgment on any of those matters, the proper remedy is to invoke the help of the appellate tribunal where an appeal is allowed by law. Another mode of rectifying an erroneous judgment is to apply for review of judgment. The unsuccessful party has, in such in application, an opportunity to adduce any evidence which he failed to adduce at the hearing and which he could not, with all proper diligence, have then adduced. It cannot be doubted that, in such cases, he cannot institute a fresh suit to get the judgment vacated. The allegation of fraud for vacating 3 judgment therefore, must be extraneous to everything which has been adjudicated on by the court and not any fraud which has already been dealt with by the court..... Now the judgment of a court includes the decision of the questions whether the testimony of any witness is true or false and whether a document produced in evidence is genuine or not. These questions are not extraneous or collateral to the judgment, but are steps which lead to the final adjudication of the court, quite as much as Its opinion as to the effect of the evidence adduced and the inference to be drawn from It. The parties in a suit are entitled to convince the court that the evidence given by their respective witnesses is true and prove the contentions they urge. It stands to reason, therefore, that the unsuccessful party cannot be allowed to resort to a fresh suit in order to make a fresh attempt to show that the evidence which was insisted on by his opponent as true, was in reality, false and to characterise such insistence as fraud in obtaining the judgment, Nor can he be permitted to do so by adducing fresh evidence for the purpose, for it was his duty to place all his evidence before the court at the former trial.....
"It is true that parties ought not to let in false evidence, and that it is highly improper and Immoral to do so, but it is the function of the court to decide whether the evidence is true or false. If the adducing of false evidence can be spoken as a fraud, then the court, in deciding the case, must be taken to have adjudged whether such fraud has been committed or not, and what it has once adjudged, it cannot be called upon to decide again. The test to be applied is, is the fraud complained of not something that was included in what has been already adjudged by the Court, but extraneous to it? If, for instance, a party be prevented by his opponent from conducting his case properly by tricks or misrepresentation, that would amount to fraud. There may also be fraud upon the Court, if, in a proceeding in which a party is entitled to get an order without notice to the other side, he procures it by suppressing facts, which the law makes his duty to disclose to the court. But where two parties fight at arm's length, it is the duty of each to question the allegations made by the other and to adduce all available evidence regarding the truth or falsehood of it. Neither of them can neglect his duty and afterwards claim to show that the allegation of his opponent was false".
17. In Subbanna v. Bayamma,' AIR 1925 Mad 640, the contention was that, though the parties to a suit cannot impeach the judgment, on the ground of fraud, merely by reason of the fact that perjured evidence was adduced in the case, if the plaintiff has obtained the judgment by a perpetration of fraud by suing on a claim known to be false and adducing evidence in support of it, it is liable to be upset, in a subsequent suit brought for the purpose. It was held, repelling the contention :
"If it be held that in every case, where the plaintiff comes into the Court with a case false to his knowledge and obtains a judgment in his favour, that judgment could be upset in another suit brought for the purpose, there will he no end to litigation, it would be open to the defendant in the second suit, to prove in a third suit that the plaintiff in the second suit brought a suit false to his knowledge and ask that the judgment in the second suit should be set aside by the judgment in the third suit.
The fraud must be extrinsic to the proceedings before the Judge. It must be in the conduct of the suit, by keeping the defendant out of Court, by practising a fraud on him, or by not serving a notice upon him, or by a false declaration inducing the Court to believe that notice has been served and proceed with the suit ex parte or by some other act by which the defendant is prevented from placing his case before the court, as fully as he would do, but for the act of the plaintiff".
18. In Ramanathan v. Palaniyappa, AIR 1939 Mad 146, their Lordships held :
"The fraud which vitiates a decree must be something extrinsic to the proceedings pending before the court..... The making of a false statement knowing it to be false in the written statement cannot be regarded as extrinsic to the proceedings in the Court. The whole of the written statement must be deemed to have been considered by the Court before it pronounced its judgment and if for some reason or other the Court accepted a certain allegation as true which is subsequently alleged to be false there is no ground for vacating the decree on the ground of fraud. The remedy in such a case is either by way of appeal or by way of review."
The same view was expressed by another Bench in Nageswara v. Genesa, AIR 1942 Mad 675 (2).
19. That the claim urged by the 3rd defendant in O. S. No. 81 of 1100 was a false one or that the 3rd defendant had secured the decree by letting in false or perjured evidence, even if true, would not amount to fraud of the hind that would nullify the decree fn the suit. The falsity or truth of the claim has been or must be deemed to have been adjudicated by the court when it decreed the claim.
Excepting that the suit was false, no other fraud is alleged in respect of the decree or judgment in O. S. No. 81 of 1100. The plaintiff, not being a party to that decree, could well have denied being bound thereby, especially since the assignment of Ext. C in her favour was in 1098, about two years before the institution of the suit O. S. No. 81 of 1100. But it is not for her to nullify the same as been affected by fraud.
The 3rd defendant after his court-purchase of Ext. C, urged his right to collect the debt involved, fay the institution of O. S. No. 17 of 1101 to which the plaintiff was also made a defendant. It was then incumbent on her to have defended that suit and asserted her rights, under Exts. E and F, to the suit amount. Though, in response to the summons, she entered appearance through counsel she did not contest the claim, nor inquire about the fate of the case and its effects on her. There is no allegation that she was actually prevented from making enquiries of her counsel about the progress of the suit. Fraud affecting the validity of a decree must be actual positive fraud, a meditated and intentional contrivance to keep the opposite party in ignorance of the real facts of the case. The plaintiff having entered appearance through counsel cannot be held to have been the victim of any such positive fraud. Hence the fraud set up by her to challenge the validity of the decree, Ex. AA, in O. S. No. 17 of 1101 fails.
20. Further, the plaintiff, having been a party to and having entered appearance through counsel and never retired from the case, must be deemed to have been aware of the judgment in O. S. No. 17 of 1101 when it was pronounced. That judgment was on 19-2-1105; and this suit is instituted on 24-5-1113 only. Article 95 of the Limitation Act allows only a period of throe years from the date of knowledge of the decree to institute a suit to set it aside on the ground of fraud. The suit must therefore be held barred by limitation also.
21. Thus, in any view, the suit has to fail. The appeal is therefore allowed and the suit dismissed with costs throughout.
The cross-objection by the plaintiff, 1st respondent, is for her costs in the court below. In the nature of the decision hereinabove, it has only to be dismissed.
The cross-objection by the 2nd respondent, 1st defendant, challenges certain findings or directions in the decree of the court below. As the suit has been dismissed these objections do not now arise for consideration. It is also dismissed, without costs.
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