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IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.N. PRAKASH, S. SRIMATHY, JJ.
K.J. Sumathy W/o Late K.S. Jagannathan – Petitioner
Versus
The District Registrar, Dharmapuri Registration District – Respondent
Writ Petition No. 27120 of 2018, W.M.P. Nos. 12915 of 2020, 31527 of 2018
Decided On : 02-11-2021
Constitution of India, 1950 - Article 226 - Fraud - Loan Agreement - Fake Arbitration Award - Writ Petition has filed seeking issuance of a Writ of Mandamus directing first respondent to cancel the sale deed - One was the owner of a land measuring 25 acres a local politician, entered into a loan agreement with one (A2), under which, (A1) made it appear as if he has received a loan around Rs. 4,00,000/- for which, he has given above said property as security - Loan agreement contained an arbitration clause - Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res-judicata. (Para 34).
Finding of the Court: Even in judicial proceedings, once a fraud is proved, all advantages gained by playing fraud can be taken away - In such an eventuality the questions of non-executing of the statutory remedies or statutory bars like doctrine of res-judicata are not attracted - Suppression of any material fact/document amounts to a fraud on court - Every court has an inherent power to recall its own order obtained by fraud as order so obtained is non est - Court consider this as one of the extraordinary cases inasmuch as an arbitration centre has been established to make ordinary people to believe that it is a regular Court and in that premises, an award has been passed in respect of the property in an alleged money dispute between (A1) and (A2).
Result: Writ Petition allowed.
ORDER :
1. This Writ Petition has been filed seeking issuance of a Writ of Mandamus directing first respondent to cancel the sale deed dated 02.05.2017 registered as Doc. No. 1075 of 2017, which was registered in favour of the fourth respondent after conducting enquiry in respect of land measuring 8-16 Acres in S. No. 867/2 and S. No. 867/2B of Adhiyamankottai Village, Dharmapuri Taluk, Dharmapuri District.
2. The short facts that are required for deciding this Writ Petition are as under:
2.2. Thereafter, it appears that Nagaraj (A1) and Rajendran (A2), in collusion, contrived a dispute, appointed one Mr. K. Rajaram (A4), Advocate, as an arbitrator, based on which, K. Rajaram (A4) passed an award dated 31.10.2014 in a fake arbitration proceedings viz. A.R.O.P. No. 36 of 2014 directing execution of a sale deed in respect of 8 acres and 16 cents of K.S. Jagannathan's property in favour of Rajendran (A2).
2.3. While so, Rajendran (A2), who had obtained the fake arbitration award, presented the arbitration award in the District Court, Dharmapuri, for execution against Nagaraj (A1) in R.E.P. No. 36 of 2016, in which K.S. Jagannathan was not shown as a party. Nagaraj (A1) remained ex-parte in R.E.P. No. 36 of 2016 and an ex-parte order was passed by the District Judge, Dharmapuri, directing the execution of a sale deed in favour of Rajendran (A2) in respect of K.S. Jagannathan's property. Accordingly, the impugned sale deed dated 02.05.2017 in Doc. No. 1075 of 2017 came to be registered as if the property has been sold to Rajendran (A2). Challenging the registration of the sale deed dated 02.05.2017 in Doc. No. 1075 of 2017, K.S. Jagannathan has filed the present Writ Petition.
2.4. On coming to know about all this, K.S. Jagannathan approached the police and lodged a complaint, based on which, a case in DCB P.S. Crime No. 1 of 2018 was registered and investigation was taken over. The police arrested Nagaraj (A1), Rajendran (A2) and Advocate Rajaram (A4) etc.
2.5. K.S. Jagannathan also filed a suit in O.S. No. 71 of 2010 before the Additional District Judge, Dharmapuri, against Nagaraj (A1) and six other rival claimants for a declaration that he (K.S. Jagannathan) is the absolute owner of the property measuring 25 acres of land in Survey No. 867/2, Adhiyamankottai village, Dharmapuri District, which was the subject matter of the fake arbitration proceedings. Nagaraj (A1) filed a counter suit in O.S. No. 12 of 2015 for a bare injunction restraining K.S. Jagannathan and his relatives from interfering with his alleged possession of the property. Both suits were contested by the defendants therein. After contest, the Additional District Court, Dharmapuri, by judgment and decree dated 23.11.2016, allowed the suit filed by K.S. Jagannathan and gave a declaration and permanent injunction as sought for by him in respect of the property covered by the fake arbitration award and dismissed the suit filed by Nagaraj (A1). Thereafter, K.S. Jagannathan presented the decree in O.S. No. 71 of 2010 before the Sub-Registrar, Dharmapuri West and had it registered as Document No. 145/2017 on 25.01.2017.
3. During the pendency of this Writ Petition, K.S. Jagannathan died on 04.10.2020 and his legal heirs have been impleaded as petitioners. Nagaraj (A1) has filed a counter affidavit dated 25.07.2019 in this Writ Petition reiterating that he had not entered into any fake arbitration agreement and that the sale deed is a valid document. Rajendran (A2/fourth respondent) has filed a count
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