1943 Supreme(SC) 33
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD ATKIN, LORD THANKERTON, LORD PORTER, LORD CLAUSON AND SIR GEORGE RANKIN.
SHEIKH RAHMAT ILAHI - Appellant
Versus
MOHAMMAD HAYAT KHAN - Respondents
On appeal from the High Court at Lahore.
Decided On : July. 18. 1943.
Solicitors for appellant: Peake & Co.
Solicitors for respondents: Douglas Grant & Dold.
A failure by lower courts to determine a vital question of fact that fundamentally affects the case's outcome constitutes an error of law, thereby rendering a second appeal competent under Section 100 of the Civil Procedure Code.
Headnote:(A) Civil Procedure Code, 1908 - Section 100 - Second Appeal - Competency - Failure of lower courts to investigate and determine a vital question of fact which fundamentally affects the issue in the case constitutes a serious error in law - A failure to appreciate and determine a question of fact that vitally affects the issue stated in the case is a failure in the duty imposed by law on the court, and such a failure is a question of law on which a second appeal is competent.
(B) Civil Procedure Code, 1908 - Section 103 - Power of the High Court to determine issues of fact on which the lower courts had failed to make a finding.
Facts of the case:
A suit was filed to set aside a decree for a sum of money obtained through a bond and a subsequent arbitration award. It was alleged that the bond was fraudulently secured while the plaintiff was ill, the arbitration was a sham involving a bogus arbitrator, and the decree was obtained through fraudulent representations and without the plaintiff's knowledge or consultation with her counsel. The lower courts dismissed the suit, finding that fraud had not been proved. However, the High Court reversed this, finding that the loan was never made, the arbitration was a pretence, and the plaintiff had been overreached by trusted persons.
Findings of Court:
The High Court correctly held that the loan of the disputed amount had not been made and that the arbitration proceedings were a fraudulent contrivance designed to secure a false decree. The failure of the lower courts to make a finding on the basic question of whether any debt was actually due from the plaintiff was a serious error in law.
Issues: Whether the High Court was competent to entertain the second appeal under Section 100 of the Civil Procedure Code and whether the High Court was justified in reversing the decision of the lower court to hold that the decree was obtained by fraud.
Ratio Decidendi: Where the courts below misconceive the real question of fact to be tried, or fail to determine a question of fact that vitally affects the issue stated in the case, it constitutes a failure in the duty imposed by law on the court. Such a failure is an error of law, making a second appeal competent under Section 100 of the Civil Procedure Code.
Result: Appeal dismissed with costs.
Legal Category Hierarchy
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practice and procedure
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civil procedure
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second appeal
- competency and jurisdiction
- determination of facts
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second appeal
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civil procedure
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civil law
- fraud and collusion
- arbitration
JUDGEMENT
Appeal (No. 4 of 1941) from a judgment of the High Court, sitting as a court of second appeal (April 25, 1939), which reversed a judgment of the District Judge, Lyallpur (August 4, 1936), who had affirmed a judgment of the Subordinate Judge, Lyallpur (August 2, 1935), dismissing a suit by Mst. Umrao Begum (hereinafter called the plaintiff, who died on June 25, 1938, pending the appeal to the High Court, against the appellant, Sheikh Rahmat Ilahi.
The following facts are taken from the judgment of the Judicial Committee In a previous suit the appellant had obtained on March 30, 1933, a decree for Rs.30,000 and interest against the plaintiff for money alleged to be due on a money bond. On August 28, 1933, the suit out of which this appeal arose was begun by the plaintiff against the appellant with a view to setting aside the decree for Rs.30,000. The case alleged by the plaintiff in her petition of plaint as finally amended, and dated December 20, 1933, may be summarized as follows. It was said that one Chaudhri Mohammed Din, with the help of one Mahbub Ilahi, had fraudulently secured the plaintiffs signature on the bond above referred to while she lay ill, thus fixing on her a liability to the appellant, although she had never seen him nor raised any loan from him ; that three months later the same two persons, without the plaintiffs knowledge, purchased a stamp paper in the name of the plaintiff, and a fictitious dispute having been set up, an agreement referring the same to arbitration was written on the paper and a bogus arbitrator was appointed; that a suit was instituted by the appellant for a decree enforcing the arbitrators award; that on March 30, 1933, a decree against her for Rs.30,000 was passed, having been obtained by a fraudulent representation that she accepted the award and its terms ; that the award and the decree were null and void.
In the Court of the Subordinate Judge the issue was formulated as follows " Was the decree in dispute obtained by "fraud and collusion or undue influence and is therefore void "or illegal?"
The plaintiff gave evidence that she had ample means left to her by her father. She did not know the appellant, and had never even seen his face. She had not taken any loan from him or executed any document respecting loan in his favour. She had never nominated the alleged arbitrator. She had engaged one Iqbal Singh as her counsel in the previous suit. When Iqbal Singh went away to Lahore, Umar Din told her that he (Umar Din) had engaged Mr. Sindhi as her counsel. She did not see Mr. Sindhi. She did not get any paper sent to him asking him to admit on her behalf the claim of Rs.30,000. Umar Din did court work for her; he had been employed for her by Mohammed Din. The latter did work for her in con nexion with her cases. She used to put her signature on the papers at the instance of Mohammed Din. She could not exactly say whether he used to secure her signature on written papers or on blank papers. She did not know Urdu. She could only put her signature in Urdu. Mohammed Din simply asked her to put her signature. She used to put her signature at his instance. He used to secure her signatures in connexion with all the court matters. She used to put her signatures at his instance. Dr. Sri Ram gave evidence that the plaintiff suffered from renal colic in 1932.
Mr. Sindhi, pleader, gave evidence that in March, 1933, Umar Din and Mohammed Din orally retained him as counsel for the plaintiff and produced a form of power of attorney with the plaintiffs signature on it but otherwise blank. He took his fee and filled in the form. Subsequently Umar Din and Mohammed Din brought him an "application " signed by the plaintiff, which was in substance a submission to a decree in the terms of the award. He attended in court and presented that document and submitted on her behalf to the decree for Rs.30,000 accordingly. The plaintiff never came before him during the pendency of the suit, nor did he ever