Fraud vitiates all solemn acts. A settlement deed executed regarding property previously sold in a court-ordered auction constitutes an act of fraud, rendering it void as a legal nullity, allowing the High Court to exercise its writ jurisdiction to declare it as such.

PRAYER: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorarified Mandamus to call for the records of the 3rd respondent in respect of registered Document No.8148/2022 dated 13.09.2022 on the file of the 3rd respondent wherein the property was settled by the respondents 5 and 6 in favour of Mr.S.Tamil Selvan (since deceased)/4th respondent rep., by his legal heirs S.Jagan and S.Gajalakshmi and declare the same as illegal and non est in the eye of the law and consequentially direct the official respondents to make necessary entries in Index II of the Registration Act so as to reflect in the encumbrance certificate disclosing that Mr.S.Tamil Selvan (since deceased)/4th respondent does not have the right over the property by registering the order to be passed in this writ petition.

For Petitioner(s) : Mr.Abdul Saleem, Senior Counsel for M/s.V.J.Latha

For Respondent(s) : Mr.U.Baraidharan, Special Government Pleader for R1 to R3

Mr.D.Ashok Kumar for R5 and R6

ORDER

The present writ petition is filed praying for a writ of certiorarified mandamus to call for the records of the 3rd respondent in respect of registered Settlement Deed in Document No.8148/2022 dated 13.09.2022 and declare the same as illegal and non est in the eye of the law and consequentially direct the official respondents to make necessary entries in the encumbrance certificate.

2. Brief Facts:

2.1. Property comprised in S.Nos. 57/4A & B, 58/5, 58/6, 58/7 and 58/8, measuring an extent of 2.83 acres, situated at Idayanchavadi Village, Ponneri Taluk (hereinafter referred to as “subject property”), originally belonged to one S. Prabhakaran, brother of respondents 4 to 6. At the request of S.Prabhakaran (since deceased), Indian Overseas Bank sanctioned the following term loans viz., a) Term Loan No.5 of 1990 of Rs.6,00,000/- on 19.07.1990, b) Term Loan No.7 of 1990 of Rs.2,11,000/- on 27.08.1990, c) Term Loan No. 3 of 1991 of Rs.1,26,000 on 22.02.1991. The above term loans were repayable in 48 monthly instalments of Rs.12,500/-, Rs.4,400/- and Rs.6,625/-, commencing from January 1991, March 1991 and August 1991 respectively. As security for repayment of the said loans. Mr.S.Prabhakaran deposited title deeds of subject properties. Mr.S.Prabhakaran committed default in repayment of loan. A suit came to be filed before this Court in C.S.No.1334 of 1993 for recovery of a sum of Rs.18,07,723/- together with interest at 26% per annum with quarterly rest. The suit in C.S.No.1334 of 1993 was transferred to Debt Recovery Tribunal II, Chennai (hereinafter referred to Tribunal) and renumbered as T.A.No.117 of 2001, which was disposed of by the Tribunal on 26.08.2002, finding that Indian Overseas Bank is entitled to a Recovery Certificate against the defendants therein namely, i) S.Prabakaran, Proprietor of Prabu Brick Works, ii) S.Kirubavathi, iii) K.A.Muthaleef, for a sum of Rs.18,07,723/- together with simple interest @ 16% p.a., from the date of plaint till the date of realization in full with costs and also to sell the property mentioned in Schedule A to G.

2.2. Pursuant to the above order, subject property was brought to auction under SARFAESI Act . In the public auction held on 12.05.2004, Dr. A.S. Leena was the highest bidder and a Sale Certificate dated 05.07.2004, vide Doc.No.3726/2004, was issued to her, along with Original parent documents. Dr.A.S.Leena later sold an extent of 2.42 acres to Mrs. S. Pushpadevi vide Doc. 7533/2007, and an extent of 0.41 acres to Mr. C. Devendran vide Doc. 7534/2007.

2.3. It is subm