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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Naresh Kher - Appellant
Versus
S Jagjit Singh - Respondent
EX.F.A. 5 of 2019 & CM Appl. 10276 of 2019
Decided On : 03-02-2022




A decree obtained by fraud is a nullity and can be challenged in any court, as it vitiates all judicial acts.

Headnote:(A) Code of Civil Procedure, 1908 - Orders under Order XXI Rule 35 and 99 - Execution proceedings of a decree obtained under fraud - The Executing Court dismissed objections of the appellant regarding possession of a property, citing the transactions occurred during pendency of the litigation, invoking the doctrine of lis pendens - The Court noted that multiple agreements had been executed by the original owner, defrauding multiple parties who paid substantial money. (Paras 6, 7, 14)

(B) Fraud - Established that any decree obtained by fraud is a nullity and can be challenged at any time in any court - The court reiterated the principle that proceedings actuated by fraud vitiate all judicial acts, referencing A.V. Papayya Sastry & Ors. v. Government of A.P. (Paras 14, 15)

Facts of the case:
The execution first appeal challenges the order passed by the Executing Court dismissing the objections raised by the appellant concerning the possession of a property, given the backdrop of multiple sales and agreements made regarding the same property by the original owner, with substantial sums of money involved.

Findings of Court:
The order of the Executing Court was based on the premise that the appellant entered into an agreement during the pendency of litigation, rendering the transaction invalid under the doctrine of lis pendens, and noted fraudulent actions by the counterparties involved in the property transactions.

Issues: The Court examined issues relating to the validity of property transactions executed during the pendency of litigation and whether the appellant's objections to execution were appropriately dismissed by the Executing Court.

Ratio Decidendi: The court ruled that a decree obtained by fraud is a nullity, reinforcing the principle that fraud taints all judicial acts.

Result: The appeal requires further adjudication and directions were issued to secure the suit property.

Table of Content
1. background of the property and related transactions. (Para 2 , 3 , 4)
2. execution proceedings and objections raised. (Para 6 , 7)
3. arguments about fraud and concealment in ongoing litigation. (Para 9 , 10 , 11)
4. court's analysis on property rights and implications of fraud. (Para 12 , 13 , 14)
5. directions to secure property and upcoming legal proceedings. (Para 17 , 18 , 19)

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through video conferencing.

2. The present execution first appeal challenges the impugned order dated 18th December, 2018 passed by the Executing Court in Ex. No.2298/2016 titled S. Jagjit Singh v. Narbada Devi, by which objections filed by the Appellant herein/Mr. Naresh Kher (hereinafter "Mr. Naresh Kher") have been rejected.

3. This appeal relates to property bearing Flat No.169, (Duplex) Category-III, Munirka Vihar, JNU, New Delhi (hereinafter "suit property"). Today, part submissions have been made by ld. counsels for the parties. These submissions and the record in this case, has brought out the following facts before this Court:

i) The suit property is claimed to have been allotted by the DDA in favour of one Mrs. Narmada Devi/Respondent No.2 (hereinafter "Mrs. Narmada Devi") who along with her son, Mr. Deepak Varshney, have entered into multiple agreements to sell/sale deeds in respect of the same suit property. The said owner has collected huge sums of money from the following persons with whom agreements were entered into:

a) Agreement to sell dated 26th June, 2009 and sale deed dated 10th May, 2016, is claimed to have been executed in favour of Mr. Jagjit Singh/Respondent No.1 (hereinafter "Mr. Jagjit Singh"). The sale consideration as per this agreement was Rs.20 lakhs, out of which, Rs.19.5 lakhs is stated to have be paid;

b) Agreement to sell dated 16th April, 2009 and Sale Deed dated 3rd March, 2010, is stated to have been executed in favour of one Mr. Kanahiya Lal Kewal Parmani/Respondent No.3 (hereinafter "Mr. Kanahiya Lal Kewal Parmani"), wherein the sale consideration is mentioned as Rs.18.80 lakhs;

c) Sale deed dated 27th November, 2009 executed in favour of Mr. Mahesh Verma and his wife, who paid a consideration of Rs.60 lakhs;

d) Agreement to sell with Mr. Naresh Kher, executed on 1st/2nd July, 2012. The consideration as per the said agreement was Rs.1.55 crores, out of which, Rs.1,05,50,000/- is stated to have been paid to Mrs. Narmada Devi. This payment is also stated to include a loan in Allahabad Bank to the tune of Rs.65.50 lakhs cleared by Mr. Naresh Kher on behalf of Mrs. Narmada Devi, by way of RTGS. The remaining amount is stated to have been paid in the form of a cheque for Rs.4 lakhs with Rs.36 lakhs being paid in cash. Mr. Naresh Kher was handed over the documents to the suit property by Mrs. Narmada Devi and given possession of the suit property on 4th July, 2012, by Mrs. Narmada Devi and her son.

ii) There are various proceedings pending in respect of this suit property:

a) CS(OS) 1608/2014 titled Naresh Kher v. Narmada Devi & Ors. filed by Mr. Naresh Kher;

b) CS(OS) 3329/2014 titled Mahesh Verma & Anr. v. Naresh Kher & Ors. filed by Mr. Mahesh Verma. Both these suits are pending before the Original Side of this Court. In CS(OS) 1608/2014, vide order dated 26th May, 2014, status quo was granted qua title and possession of the suit property.

c) Apart from these two suits, there are criminal complaints filed against Mrs. Narmada Devi and her son. Mrs. Narmada Devi was also arrested and is stated to have remained in custody for more than four years and was given bail thereafter.

4. Notably, in the said criminal proceedings, a charge-sheet was initially filed on 27th August, 2012 and a supplementary charge-sheet was filed on 28th May, 2014. In the supplementary charge-sheet, it is clearly recorded that the Police had also conducted enquiries with Respondent No.1- Mr. Jagjit Singh, who claimed that he had an agreement to sell and purc

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