2008 Supreme(Mad) 3489
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. JEYAPAUL
The Industrial Finance Corporation of India Ltd.
Versus
Das Lagerwey Wind Turbines Ltd., rep by Chairman and Managing Director & Others
Application No.2882 of 2008, C.S.No.227 of 1998
Decided on: 23-09-2008
For the Applicant :PL. Narayanan, Advocate.
For the Respondents:M.L. Joseph, Surana & Surana, Advocates.
Headnote:CIVIL PROCEDURE CODE, ORDER 23 RULE 1 - Suit dismissed as settled out of court - Court becomes functious Offico - Application seeking to reopen the suit unsustainable - Once it has been established that a fraud has been committed on this court and the party, the court cannot take a stand that it has become functus officio after it has delivered judgment. The court has to necessarily come to the rescue of the aggrieved party, in such circumstances and recall and reopen the judgment for fresh adjudication of the case. But the facts and circumstances stated herein do not fall under category where the fraud has been committed against the court and the party and hence application dismissed.
1. This is an application filed by the eighth defendant after the termination of the suit in C.S.No.227 of 1998 seeking to set aside the judgment of this court dated 28. 2002 dismissing the aforesaid suit as withdrawn and consequently restore the above suit to the file of this court.
2. The applicant/8th defendant has contended that the first respondent/plaintiff filed the suit for recovery of a sum of Rs.16,02,96,811.30 with interest from respondents 2 and 3/defendants 1 and 2 claiming first charge in the form of unpaid vendors lien on the 28 Wind Turbine Generators described in the schedule to the plaint. The first respondent/plaintiff is fully aware of the loan transactions respondents 2 and 3 entered into with the applicant. Such a fact has been set out in paragraphs 38 to 40 of the plaint. Respondents 2 to 8 had taken huge loan of Rs.19.50 crores from the applicant on the security of the Wind Turbine Generators claiming to be the absolute owners thereof. Though the first respondent had not sought any specific relief as against the applicant, the main endeavour in the above suit was to claim the first charge and first lien on the Wind Turbine Generators as against the exclusive charge of the applicant. The claim of the unpaid vendors lien made by the first respondent in the suit is unsustainable. The applicant has charge over the Wind Turbine Generators, but, without the participation of the applicant, a compromise was clinched between the respondents prejudicial to the rights and interest of the applicant over the Wind Turbine Generators. The consent memo would show that the respondents have dealt with the property charged in favour of the applicant to suit their convenience and have entered into an alleged compromise detrimental to the interest of the applicant. The applicant was not aware of the consent memo filed before the court. Unless the order passed in the main suit which is obtained by fraud is recalled and the suit is restored to file, the applicant will face hardship, it is contended.
3. In the counter filed by the first respondent/plaintiff, it has been contended that the application as filed is not maintainable either in law or on facts. The remedy for the grievance of the applicant lies somewhere else. As the suit has been dismissed as withdrawn, the present application is not maintainable. No consent decree was claimed by the applicant and therefore, the applicant cannot have any grievance about the withdrawal of the suit by the plaintiff. The applicant has to establish its right in a manner known to law before the forum concerned and cannot seek any relief before this court. In the compromise clinched between the parties, the rights of the first respondent was upheld by defendants 1 and 2. The settlement arrived at between the parties also had been acted upon. It is utter false to say that the applicant was not aware of the proceedings before this court. Inspite of the fact that the first respondent has unpaid vendors lien over the Wind Turbine Generators till date, the applicant has not taken any steps whatsoever to challenge the same. Therefore, the first respondent would contend that the application deserves to be dismissed.
4. Learned counsel appearing for the applicant would submit that a fraud has been played not only upon the applicant but also as against the court by the first respondent. Therefore, a fraudulent disposal of the suit will have to be necessarily reversed opening the door for the applicant to canvass his rights before this court. A compromise was clinched by the first respondent with the other respondents in order to knock away the right of charge over the Wind Turbine Generators which was offered as a security for the whopping loan lent by the applicant to respondents 2 and 3. When the applicant has shown before the court that fraud has been played upon the applicant and the court, there is no bar for withdrawing the judgment delivered by this court. No compromise can be