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2024 Supreme(Chh) 583

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Deepak Kumar Tiwari, J.
Laxmi Shadangi S/o Late Madhav Prasad Shadangi and ors. - Petitioners
Versus
Pankaj Kumar Shadangi S/o Late Madho Prasad and ors. - Respondents
WP227 No. 964 of 2018
Decided On : 23-08-2024

Advocates:
Advocate Appeared:
For the Petitioner:Shri Shreshta Gupta on behalf of Shri Vineet Kumar Pandey, Advocate.
For the Respondent:Shri Rajendra Tripathi, Advocate.

IMPORTANT POINT
Compromise awards in succession cases must adhere to procedural requirements, including proper notice and investigation, to prevent fraudulent outcomes.

Headnote:

(A) Indian Succession Act, 1925 – Sections 372 and 373 – Writ petition challenging compromise award by Lok Adalat – Petitioners claim rights over funds deposited in deceased's account – Court finds absence of proper notice and investigation in succession proceedings – Compromise award deemed bad in law. (Paras 2, 11, 13)

(B) Fraud – Definition and implications – Court emphasizes the necessity of proper procedure and investigation in succession cases to prevent fraudulent outcomes. (Paras 3, 11)

Facts of the case: Petitioners challenge a compromise award regarding funds belonging to their deceased father, alleging fraud and lack of proper notice in succession proceedings. Respondent No.1 filed for succession without including the petitioners, claiming one was missing.

Findings of Court: The court found that the Lok Adalat's award was not sustainable due to procedural deficiencies and lack of notice to the petitioners.

Issues: The main issues were the validity of the compromise award and the procedural requirements for granting a succession certificate.

Ratio Decidendi: The court ruled that the absence of notice and proper investigation in succession proceedings renders a compromise award invalid, emphasizing the need for due process.

Result: Writ petition disposed of with liberty granted to petitioners to file a civil suit for their share.

ORDER :

Deepak Kumar Tiwari, J.

1. The petitioners have filed this petition and prayed for the following reliefs:-

“10.1 This Hon’ble Court, may kindly be pleased to call the entire record of the trial Court, relating to the case.

10.2 This Hon’ble Court, may kindly be pleased to set-aside the compromise award/decree date dated 26.08.0007 passed by Permanent Lok Adalat Banch No.04 Raigarh in Miscellaneous Civil Suit No.09/2007.

10.3 This Hon’ble Court, may kindly be pleased to pass an appropriate order / direction if the money deposited in the name of Madhav Prasad Shadangi at Kshetiya Gramin Bank Raigarh in savings account No.19/3736 of Rs.04,98,176/- and 3,00,00/- Rs. fixed deposited in the same Bank and at post office Raigarh as fixed deposited of 50,000/- has been withdrawn by the respondents on the basis of compromise award/ decree date dated 26.08.2007 passed by Permanent Lok Adalat Banch No.04 Raigarh in Miscellaneous Civil Suit No.09/2007 the same shall be recover from them.

10.4 any other relief/reliefs as deemed fit by this Hon’ble Court.”

2. Facts of the case are that respondent No.1, brother of petitioner No.1, filed an application under Section 372 of the Indian Succession Act, 1925 (henceforth ‘the Act, 1925’) against one of another sisters of petitioner No.1, arrayed as the non-applicant, namely, Soochi Shadangi, claiming the amount of Rs.4,98,176/- deposited in the name of her father late Madhav Prasad Shadangi at Kshetriya Gramin Bank Raigarh, in the Saving Account No.19/3736 and an amount of Rs.30,000/- lying as Fixed Deposit in the same Bank and also an amount of Rs.50,000/- lying as Fixed Deposit in the Post Office, Raigarh. The Succession Application has been preferred before the Civil Judge Class-I, Raigarh bearing Case No.9/2007. Respondent No.1 did not implead the petitioners as party, though they are also the daughters of late Madhav Prasad Shadangi and wrongly stated that petitioner No.1 was missing since 2001. The said succession application was decided by the Lok Adalat held on 26th August, 2007 and in a fraudulent manner a compromise has been arrived to deprive the rights of the present petitioners. Thus the impugned award is not sustainable. Hence this petition.

3. Learned counsel for the petitioners would submit that before passing the impugned award proper procedure has not been followed and the applicant has wrongly stated the material fact about missing of petitioner No.1. The Succession Court has not issued any publication notice and, therefore, the award passed earlier did not come to the notice of the petitioners, as petitioner No.1 was residing in the State of Gujarat. Thus the impugned award has been passed by practicing fraud, which deserves to be set aside.

4. On the other hand, learned counsel for the respondents would submit that the said amount has already been withdrawn and after withdrawal, the said money was handed over to petitioner No.1. He submits that procedure for grant of succession certificate is summary in nature and no res judicata applies. If the petitioners are having any right, they may file a civil suit to establish their right. He also submits that father of petitioner No.1 has lodged an FIR about missing of petitioner No.1 in the year 2001. Thus the writ petition is liable to be dismissed.

5. I have heard learned counsel for the parties at length and perused the documents annexed with the writ petition.

6. From perusal of the record of Succession Case No.9/2007, it appears that respondent No.1 has filed an application under Section 372 of the Act, 1925 arraying one of his sisters i.e. non-applicant/respondent No.2 as party. Thereafter the case was listed for appearance of the non-applicant on 1.6.2007, 16.7.2007 and 23rd August, 2007. Without serving any notice to non-applicant/respondent No.2, the applicant himself informed the trial Court on 23rd August, 2007 that there are chances of amicable settlement and the case was referred to the Lok Adalat. On 26th August, 2007, in

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