Fraud vitiates everything, and delay condonation should be approached with a liberal, justice-oriented perspective.

Headnote:
Delay Condonation - Municipal Council - M.P. Municipalities Act, 1961 - Section 312 - Indian Contract Act, 1872 - Section 17 - Fraud - Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy - (2013) 12 SCC 649 - MCD v. State of Delhi - (2005) 4 SCC 605 - A.V. Papayya Sastry and others v. Govt. of A.P. And others - (2007) 4 SCC 221 - Indian Bank v. Satyam Fibres (India) (P) Ltd. - (AIR 1996 SC 2592)
Fact of the Case:

The review petition was filed with a delay of seven years and 84 days. The delay was attributed to a compromise application filed without proper permission, resulting in the grant of ownership rights to the respondent, which was illegal and obtained through fraud.
Finding of the Court:

The court allowed the delay condonation application and reviewed the petition. It found that the compromise was illegal and obtained through fraud, thus recalling the previous order and restoring the case to file.
Issues: Delay condonation, legality of compromise, ownership rights, fraud
Ratio Decidendi: The court applied the principles of delay condonation and fraud as established in various legal precedents, emphasizing that fraud vitiates everything.
Final Decision: The review petition was allowed, the previous order was recalled, and the case was restored to file.

Judgement Key Points

The court adopted a liberal, justice-oriented approach to condoning the seven-year and 84-day delay, emphasizing that courts must remove injustice rather than legalize it (!) .
The terms of "sufficient cause" for delay condonation are elastic and must be applied based on the specific facts of the situation (!) .
Substantial justice is paramount, and technical considerations should not receive undue emphasis (!) .
While no presumption of deliberate delay exists, gross negligence by counsel or litigants is noted, and lack of bona fides is a significant factor (!) (!) .
The court distinguished between inordinate delay (attracting the doctrine of prejudice) and short delays, applying a strict approach to the former and a liberal one to the latter (!) .
The conduct and attitude of the party regarding their inaction or negligence are relevant factors in weighing the balance of justice (!) .
If the explanation for delay is concocted or grounds are fanciful, the court remains vigilant to protect the other side (!) .
It is a settled principle that no one escapes the consequences of fraud or misrepresentation by relying on technicalities of law (!) .
Since the compromise was filed without the required permission from the Municipal Council and granted illegal ownership rights, it was deemed void ab initio and illegal (!) (!) .
Section 17 of the Indian Contract Act, 1872 defines fraud to include false suggestions, active concealment, and acts fitted to deceive (!) (!) (!) (!) (!) (!) .
A judgment or order obtained by fraud is considered a nullity and can be challenged in any court at any time (!) (!) (!) .
As stated by Lord Denning, no judgment or order can stand if obtained by fraud (!) .
The distinction exists between a court being "mistaken" (which cannot impeach a judgment) and being "misled" by trickery (which allows setting aside the judgment) (!) .
The principle that "fraud and justice never dwell together" means that fraudulent acts vitiate all judicial proceedings (!) .
Fraud involves deliberate deception to secure unfair benefits, and the principle of finality of litigation cannot be used as an engine of oppression for dishonest litigants (!) .
Courts have inherent powers to recall judgments or orders obtained by fraud on the court or a party (!) .
Given that the compromise was obtained through fraud involving the Municipal Council, the review petition was allowed, the previous order was recalled, and the case was restored to file (!) (!) .

JUDGMENT

Heard on I.A.No.4630/2013, an application for condonation of delay.

2. There is delay of seven years and 84 days in filing the present review petition.

3. It is pleaded in the application for condonation of delay that an application for compromise was filed on behalf of Municipal Council, however, no permission was taken from the Council in regard to compromise, hence, the Council was not aware about the fact of compromise. The President and CMO of the Council were hand in gloves, they did not inform the Council about the judgment. After seven years, contempt proceedings were initiated and the contempt case was registered as Cont. Case No.497/2013. Thereafter, notices were issued. Council received notice on 27.8.2013, then it came to the knowledge of the Council. Thereafter, certified copy of the judgment was obtained and review petition has been filed.

4. In the present case, there was no permission to enter into compromise by the Municipal Council. Apart from this, by way of compromise, right of ownership in regard to a land, which was of the ownership of the Municipal Council, was created in favour of the respondent. The compromise was void ab initio and is per se illegal.

5. Hon'ble Supreme Court in Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy and others reported in (2013) 12 SCC 649 : (AIR 2014 SC (Civ) 67) has laid down following principles in regard to considering the facts by the Court in the matter of condonation of delay after considering earlier judgments of the Hon'ble Supreme Court :

'15. From the aforesaid authorities the principles that can broadly be culled out are:

(i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

(ii) The terms 'sufficient cause' should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.

(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

(vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

(xii) The entire gamut of facts are to be carefully scrutinized and the approach

Click Here to Read the rest of this document

2014 Supreme(MP) 682

MADHYA PRADESH HIGH COURTS.K. GANGELE, SUSHIL KUMAR PALO, JJ.Chief Municipal Officer - AppellantVs.Mahila Munni Devi and others - RespondentsR. P. No. 470 of 2013Decided On : 10/07/2014

Fraud vitiates everything, and delay condonation should be approached with a liberal, justice-oriented perspective.

Cases Referred (5)

MADHYA PRADESH HIGH COURT
S.K. GANGELE, SUSHIL KUMAR PALO, JJ.
Chief Municipal Officer - Appellant
Vs.
Mahila Munni Devi and others - Respondents
R. P. No. 470 of 2013
Decided On : 10/07/2014