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1942 Supreme(Mad) 110

IN THE HIGH COURT OF MADRAS
Alfred Henry Lionel Leach, C.J.
Rm. N.L. Kr. Ramanathan Chettiar
Versus
Unnamalai Achi and Anr.
Decided On : 18.03.1942

A judgment or decree obtained by fraud upon a Court binds no such Court or any other, and its nullity upon this ground may be alleged in a collateral proceeding.

Headnote:

Fraud - Property Transfer - Transfer of Property Act, Section 53 - Summary

Fact of the Case:

The appellant was found to be a party to a gross fraud and sought to retain the benefit of his fraudulent conduct on a technical plea. The first respondent sought a declaration that the suit instituted by the appellant was fraudulent and collusive, and a decree setting aside the sale to the appellant.

Finding of the Court:

The District Munsif and the Subordinate Judge found that the appellant and the second respondent were guilty of fraud, and the Court had the power to remedy the injustice caused.

Issues: The issues involved the fraudulent conduct of the appellant and the applicability of Section 53 of the Transfer of Property Act.

Ratio Decidendi: The Court found that a judgment or decree obtained by fraud upon a Court binds no such Court or any other, and its nullity upon this ground may be alleged in a collateral proceeding. The Court also held that the appellant's plea founded on Section 53 of the Transfer of Property Act was not valid in this case.

Final Decision: The appeal was dismissed with costs in favor of the first respondent.

JUDGMENT

Alfred Henry Lionel Leach, C.J.

1. This appeal discloses a case of gross fraud and a fraud practised on the Court. The appellant was a party to this fraud and seeks to retain the benefit of his fraudulent conduct on a technical plea, but it is a source of satisfaction that this technical plea avails him of nothing.

2. The first respondent instituted a suit (O.S. No. 56 of 1934) in the Court of the Subordinate Judge of Devakottai to recover moneys said to have been deposited by her with a money-lending firm carried on by the second respondents father at Pyabwe in Burma. The second respondent contested the claims and said that he was only an agent and not a partner in the firm. On the 23rd January, 1935, the Court granted the first respondent a decree for Rs. 5,318-13-9, limited so far as the second respondent was concerned to his share in the family estate, as there was no proof that he was a partner. , On the 24th July, 1935, the first respondent commenced proceedings in execution and these proceedings were still pending on the 31st July, 1936. On the 1st April, 1936, the appellant filed a suit in the Court of the District Munsif of Devakottai to recover from the second respondent a sum of Rs. 1,000 and interest which he claimed to be due on a promissory note executed by the second respondent in his favour. On the 28th April, 1936, he obtained a decree and in execution thereof he attached a house belonging to the second respondent. This house was already under attachment in the execution proceedings instituted by the first respondent to enforce payment of the decree which she had obtained against the second respondent. On the 27th July, 1936, the house was sold in the execution proceedings instituted by the appellant and bought by him for the sum of Rs. 1,811. The amount of the decree was only Rs. 1,221-2-0 and the balance of the Rs. 1,811 was paid out to the second respondent.

3. Thereupon the first respondent filed in the Court of the District Munsif of Devakottai the suit out of which this appeal arises for (i) a declaration that the suit instituted by the appellant was fraudulent and collusive, its object being to defeat the attachment which she had effected in execution of the decree obtained by her in O.S. No. 56 of 1934, and (ii) a decree setting aside the sale to the appellant. The plaint did not purport to be filed tinder the provisions of Section 53 of the Transfer of Property Act, but the first respondent sought and obtained leave of the Court to bring the suit on behalf of all the creditors. The District Munsif held that the appellants suit had been filed for the purpose alleged by the first respondent and that both the appellant and the second respondent were parties to the fraud. Accordingly he granted the declaration asked for and set aside the sale. The appellant appealed to the Subordinate Judge who agreed with the District Munsif. The appellant has now appealed to this Court. In the first place he contends that there was no evidence on which the Subordinate Judge could find that he and the second respondent were guilty of fraud. In the second place he says that the suit must be treated as having been filed under the provisions of Section 53 of the Transfer of Property Act and that section does not apply to a transfer made under an order of Court.

4. There was ample evidence on the record to justify the finding that the appellant and the second respondent, who are related by marriage, were parties to a gross fraud on the first respondent, and incidentally on the Court. There being evidence to support the finding of the Subordinate Judge, his decision is conclusive on the point. This was not seriously challenged. The appellant really relies on the plea founded on Section 53 of the Transfer of Property Act.

5. Section 2(d) of that Act says that nothing contained in it shall be deemed to affect, save as provided by Section 57 and Chapter IV, a transfer by operation of law or by, or in execution of, a decree o










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