Back
2006 Supreme(Kar) 714
Karnataka High Court
Judges : V.G.Sabhahit
RAMA MURTHY IYYAKANNU MUDALIAR MAJOR AND RAVICHANDRAN RAMA - Appellant
Versus
H.S.GOUTHAM SHANTHILAL MAJOR AND H.M.RAVEENDRA KUMAR - Respondent
RPA 274 Of 2001
Decided On : 09/16/2006
Advocates Appeared :
ASHOK HARANAHALLI, G.S.VISHVESHVARA, M.A.Humayun, Paras Jain
Fraud vitiates all solemn proceedings, including compromise decrees and auction sales.
Headnote:
FRAUD - Mortgage Suit - Section 151 CPC, Order 21 Rule 90 r/w. 47, Section 151 CPC - Banwari Lal v. Chando Devi AIR1993 SC 1139, Sardar Govindrao Mahadik v. Devi Sahai AIR1982 SC 989, Bhanwar Lal v. Smt. Prem lata AIR1990 SC 623 - The court found that the compromise decree was obtained by fraud, leading to the setting aside of the decree and the auction sale. The court referred to legal provisions and precedents to support its decision.
Fact of the Case:
The plaintiff filed a suit seeking recovery of a loan amount. The defendants alleged that the compromise decree was obtained by fraud. The court found in favor of the defendants, setting aside the decree and the auction sale.
Finding of the Court:
The court found that the compromise decree was obtained by fraud, leading to the setting aside of the decree and the auction sale.
Issues: The issues involved the validity of the compromise decree and the auction sale, and the impact of fraud on the proceedings.
Ratio Decidendi: The court held that fraud vitiates all solemn proceedings, including the compromise decree and the auction sale. It also considered legal precedents and provisions to support its decision.
Final Decision: The court allowed the appeals and set aside the compromise decree and the auction sale. The matter was remitted to the trial court for fresh disposal.
( 1 ) THESE three cases are disposed of by this common order as they arise out of the same proceedings and involve common question of law and foot and to avoid repetition.
( 2 ) RFA. No. 274/2001 is filed being aggrieved by the order and decree dated 1. 6. 95 passed by the court of XV Addl. City Civil Judge, Bangalore in O. S. No. 3376/95. MFA. No. 3934/2000 is filed being aggrieved by the order dated 30. 10. 99 rejecting the application. A. IV filed by the petitioner-appellant under Order 21 Rule 90 r/w. 47 and Section 151 CPC. , in Execution Case no. 232/96 on the file of XIX Addl. City Civil Judge and CRP. No. 3297/2000 is filed being aggrieved by the order passed by the Court of XV Addl. City Civil Judge dated 3. 3. 98 on. A.. 2. The essential foots of the case leading upto these appeals and revision with reference to the rank of the parties before the trial court are as follows: o. S. No. 3376/95 was filed by Sr. H. S. Goutham S/o. late Sr. Shanthilal against defendants 1 and 2 seeking for recovery of Rs. 2,50,000/- together with court costs and current interest at 21% from the date of suit (30. 5. 95) to the date of payment. The plaint was presented before the City civil Court on 30. 5. 95. It is averred in the plaint that plaintiff's father has mortgaged the property of the defendants and he expired during 1993 and after his death, plaintiff who is the son has continued the said business in the proprietorship. It is averred that defendants have mortgaged the premises No. 4 C Street, Ilpe Thope Ulsoor, Bangalore-8 for a sum of Rs. 1 lakh under a mortgage deed dated 11. 7. 90 agreeing to repay the amount with interest at 18% p. a. and delivered original documents of the said property. It is further averred that defendants have also borrowed a sum of Rs. 50,000/- on 13. 12. 92 by executing a promissory note agreeing to repay the amount with interest at 21% per annum by creating further charge on the property and thus defendants have borrowed a sum of Rs. 1,50,000/- from the plaintiff under simple mortgage deed. Defendants did not pay the loan amount as such legal notice was issued to them on 12. 9. 2003. Despite legal notice, defendants have not cleared the debt and wherefore the suit for recovery of Rs. 2,50,000/-under the following heads: mortgage amount. Rs. 1,00,000 promissory note Rs. 50,000 and interest Rs. 1,00,000/ total Rs. 2,50,000/ -.
( 3 ) THE plaint was registered as O. S. No. 3376/95 and made over to the Addl. City Civil Judge sitting in CCH-18 for disposal according to law. It is averred in the written statement alleged to have been by the defendants and defendants admitted borrowing of Rs. 1,50,000/- and averred that they are only to pay the amount in lumsum and agreed to repay the same in installment of rs. 5,000/- per month and agreed to pay the whole debts within three years from the date of written statement and wherefore prayed that the suit may be decreed as prayed for in the written statement. The written statement is dated 26. 5. 95 and filed before the court on 31. 5. 95 as per the order sheet maintained by the trial court. On 1. 6. 95 when the suit was posted before the court a compromise petition was filed and a consent decree was passed directing the defendant to pay the decreetal amount at the rate of Rs. 5,000/- per month with single default clause and accordingly, decree was drawn. Being aggrieved by the said judgment and decree RFA. 274/2001 is filed. There was delay in filing the appeal and delay was condoned by consent of the counsel appearing for the respondent us.
( 4 ) IN the meanwhile, the decree holders filed Execution Petition No. 232/96 seeking for execution of the decree passed in O. S. No. 3376/95 dated 1. 6. 95. In the said execution petition, the judgment debtors-the defendants in the suit appeared and filed. A. Nos. 3 and 4.. A. 3 was filed under Section 151 CPC. , praying for stay of further proceedings with regard to the sale of property which is the su
