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2023 Supreme(Guj) 1294

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
ILESH J. VORA, J.
Pushpaben Manjibhai Patel & others - Appellant
Versus
Mahesh Srichand Kotwani & others - Respondents
R/SPECIAL CIVIL APPLICATION NO. 19796 of 2015
Decided on : 18-08-2023

Advocates Appeared:
For the Appellant : DECEASED LITIGANT, MR YATIN OZA, SR.ADV. with MR RAJESH K SAVJANI
For the Respondent: MR PERCY KAVINA, SR.ADV. with MR SUNIL S JOSHI

Headnote:(A) Constitution of India - Article 227 - Legal Services Authorities Act, 1987 - Decree obtained through fraud - Petition challenging a compromise decree passed in Lok Adalat is upheld on grounds of fraud and non-compliance with mandatory provisions of law. (Paras 1, 22, 8)

(B) Fraud and collusion - A decree born out of collusion is treated as a nullity and cannot bind parties not part of the compromise. (Paras 11, 17)

(C) consent decree - Parties to a consent decree can challenge it only on limited grounds, particularly if it affects their substantive rights. (Paras 20, 22)

Facts of the case:
Dispute over ownership of land parcels initiated by petitioners who claimed lawful ownership through documentation, while respondents exercised possession through collusive actions and obtained a decree in Lok Adalat. (Paras 2, 4, 17)

Findings of Court:
The compromise decree was found to be obtained through fraudulent means which deprives the petitioners of their lawful rights and misrepresents the facts before the court. (Paras 9, 24)

Issues: Whether the decree was fraudulent and whether it binds parties not involved in the decreeing process. (Paras 17, 22)

Ratio Decidendi: A decree obtained by collusion or fraud fails to establish legitimate ownership and will not hold in subsequent court actions involving affected parties. The court emphasized the importance of transparency in legal proceedings. (Paras 17-20)

Result: Petition allowed and compromise decree set aside.

Table of Content
1. nature of the dispute and prior proceedings (Para 1 , 2 , 3)
2. petitioners' challenge based on fraud (Para 4 , 5 , 6 , 7)
3. arguments regarding delay in filing (Para 8 , 9 , 10 , 11 , 12)
4. legal interpretations regarding parties' rights (Para 13 , 14 , 20 , 21)
5. court's reasoning and observations on fraud (Para 15 , 16 , 18 , 22)
6. order of the court and restoration of the case (Para 23 , 24)

JUDGMENT :

1. Challenge in this petition filed under Article 227 of the Constitution of India, is to the consent decree dated 16.08.2002 passed by the learned 8th Joint Civil Judge (JD) Ahmedabad, Rural in Regular Civil Suit (RCS) No. 464 of 2002, by which, the trial Court, in pursuance to compromise purshis given by parties, vide Exh.16, disposed of the Civil Suit in Lok Adalat, vide judgement and decree dated 17.08.2002.

2. Facts and circumstances giving rise to filing of the present petition are as under:

    a. The dispute between the parties relates to four parcel of lands bearings plots No.91,92,93,94 situated at Sterling City Cooperative Housing Society Limited, Bopal, Ahmedabad.

    b. Petitioners being NRI, submitted application form to the society for purchase of subject plots and agreement to this effect was executed by the society on 16.12.1994 and consideration thereof was being paid thereafter and share certificates along with the possession receipt have been issued by this society and since then, they are lawful owners of the suit plots.

    c. The petitioners put a fencing upon the suit plots as well as sign board.

    d. The respondents No.1 to 4, are also claiming their right over the suit plots and according to their case, they had purchased the suit plots by way of agreement allegedly executed by the authorised person of the society and also have in their possession the share certificates and possession receipts.

    e. The respondents no.1 to 4 removed the fencing over the suit plots and entered into the suit plots illegally by advantage of petitioners absence and put up their signboards on the plots.

    f. The respondent Nos.1 to 4,filed a collusive suit, against his relative and/or known-person, respondent No.5, Deepak Nanakram Sadhwani, for getting declaration and permanent injunction with respect to suit plots.

    g. The suit was registered as Regular Civil Suit No.464 of 2002 on the file of Civil Court, Ahmedabad (Rural), Mirzapur and the same was filed on 07.08.2002. It was averred in the plaint that the plaintiffs are lawful owners of the suit plots and since long they are in possession and occupation. The defendant respondent No.5 herein, expressed his desire to purchase the said plots but somehow the plaintiffs respondents No.1 to 4 did not want to sell the plot properties and same was conveyed to the defendant No.5 and in that circumstances, his ego was hurt and threatened the plaintiffs that he will encroach upon the suit plots and sell it to the third party. Thus, therefore, the plaintiffs filed the aforesaid suit for declaration and injunction inter alia praying that they may be declared lawful owner of the suit plots and defendant respondent No.5 having no right, title and interest in the property and he be restrained not to enter in the suit plots and disturb their possession by issuing permanent injunction. The Civil Court issued summons and notice, making it returnable on 14.08.2002. The plaintiffs had also sought a prayer of local inspection of the suit plots. The Civil Court appointed the Court Commissioner to make a local inspection and accordingly, on 08.08.2002, in the presence of respondents, local inspection was made and report thereof, along with the site map showing the possession of the plaintiffs over the suit plots, was submitted by the Court Commissioner. On the returnable date, time was sought by the defendant respondent No.5 herein to file written statement. Before he could file a written statement, vide Exh.16, dated 16.08.2002, compromise purshis was being submitted before the Court stating inter al

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