IMPORTANT POINT
It is a settled proposition of law that a judgment, decree or order obtained by playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of law.

Headnote:(i) Urban Land (Ceiling and Regulation) Act, 1976—Section 34—Revisional Powers—Scope—On enforcement of the Ceiling Act in the State, appellants, land-owners filed their declarations alleging that possession of their lands had already been handed over to Port Trust Authorities for construction of quarters for its employees—As physical possession of land was not with the Port Trust Authorities, Competent Authority, Urban Land Ceiling referred the matter to the Commissioner, Land Reforms—Proceedings for reopening of the case by invoking Section 34 of the Ceiling Act were initiated—Revision allowed by State Government—Order passed by Special Officer declaring that appellants had no surplus land had been set aside—Writ petition filed by appellants for direction to the State Government to complete acquisition proceedings allowed—Order passed in revision was set aside—SLP filed by State Authorities dismissed—State Authorities, thereafter, filed recall applications stating that fraud was committed by land-owners and material facts were suppressed by them—It was alleged that Land Acquisition proceedings were not concluded and no award was passed—CBI Report clearly revealed that there was total fraud on part of land owners in collusion with Port Trust Officers as also officers acting under the Ceiling Act—High Court holding that the case was of a fraud, recalled its earlier order—Whether High Court committed an error in law in passing the impugned order—(No).
       Held : No case has been made out by the appellants for interference with the order passed by the High Court allowing the applications and recalling earlier order. The High Court has considered the matter in detail. The case of land- owners was that advance possession was taken over by Port Trust Authorities in August, 1972. The subsequent facts and letter by Chief Engineer of Port Trust in 1985 clearly revealed that it was not so. Possession of land was never with the land owners and was not given to Port Trust Authorities. From the record it is clear that neither the land-owners nor the Port Trust Authorities were in actual or physical possession of land, but it was occupied by tenants and disputes were also going on between the tenants and land owners. Therefore, the basis on which the Special Officer and Competent Authority, Urban Land Ceiling proceeded to decide the matter was non-existent and non est.(Para 15)
       In our opinion, the learned counsel for the respondents are also right in submitting that even if the statement of land-owners and Port Trust Authorities is believed and it is held that actual and physical possession of land was handed over by land-owners and taken over by Port Trust Authorities, it does not change the legal position. It was not the case of land-owners themselves that proceedings under the Land Acquisition Act were finalized and award was passed. From the record, it is clear that no notification under the Land Acquisition Act was issued in 1972. Such notifications were issued subsequently in the years 1973, 1981, 1991 and 1996. At more than one occasion, notifications were issued only because the proceedings were not finalized and award was not passed. It is also clear that in the writ petitions filed by the land-owners in 1994-95, a single Judge of the High Court directed the authorities to complete land acquisition proceedings by initiating fresh action commencing from issuance of notification under Section 4(1) of the Act and to complete them within a period of three months. In our opinion, therefore, the High Court was right in holding that the provisions of the Act would apply to the land and Special Officer and Competent Authority, Urban Land Ceiling was wholly wrong in excluding the land said to have been in possession of the Port Trust Authorities.(Para 16)
       We are further of the view that the State Government, in the facts and circumstances of the case, was right in exercising revisional jurisdiction under Section 34 of the Act.(Para 17)
       Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as nullity, whether by the court of first instance or by the final court. And it has to be treated as non est by every Court, superior or inferior. Hence, the argument of Mr. Venugopal cannot be upheld. Even if he is right in submitting that after dismissal of SLPs, the respondent herein could not have approached the High Court for recalling its earlier order passed in April, 2000 and the High Court could not have entertained such applications, nor the recalling could have been done, in the facts and circumstances of the case and in the light of the finding by the High Court that fraud was committed by the land-owners in collusion with the officers of the Port Trust Authorities and Government, in our considered view, no fault can be found against the approach adopted by the High Court and the decision taken. The High Court, in our opinion, rightly recalled the order, dated April 27, 2000 and remanded the case to the authorities to decide the same afresh in accordance with law.(Paras 36 and 37)
       Keeping in view totality of facts and attending circumstances including serious allegations of fraud said to have been committed by the land-owners in collusion with officers of the respondent-Port Trust and Government, report submitted by the Central Bureau of Investigation (CBI), prima facie showing commission of fraud and initiation of criminal proceedings, etc. if the High Court was pleased to recall the earlier order by issuing directions to the authorities to pass an appropriate order afresh in accordance with law, it cannot be said that there is miscarriage of justice which calls for interference in exercise of discretionary and equitable jurisdiction of this Court. We, therefore, hold that this is not a fit case which calls for our intervention under Article 136 of the Constitution.(Para 43)
       (ii) Constitution of India—Arts 136, 141—Special Leave Petitions—Applicability of doctrine of merger to orders passed by the Supreme Court while exercising jurisdiction under Article 136—Dismissal of SLPs—Whether it is open to the High Court thereafter to entertain recall applications and grant relief of recalling of earlier orders—Yes, when order was obtained by a successful party by practising or playing fraud—A judgment, decree or order obtained by fraud has to be treated as nullity, whether by the Court of first instance or by the final court.
       Held : While exercising jurisdiction under Article 136 of the Constitution. The Court there observed that exercise of jurisdiction by this Court under Article 136 is in two stages; (i) granting of a special leave to appeal; and (ii) hearing of appeal. The Court went on to observe that the doctrine of merger does not apply to first stage i.e. at the stage of granting of special leave to appeal. It applies only at the second stage of hearing of appeals.(Para 33)
       Suppose, a case is decided by a competent Court of Law after hearing the parties and an order is passed in favour of the applicant/plaintiff which is upheld by all the courts including the final Court. Let us also think of a case where this Court does not dismiss Special Leave Petition but after granting leave decides the appeal finally by recording reasons. Such order can truly be said to be a judgment to which Article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/authorities below, therefore, merge in the judgment of this Court and after such judgment, it is not open to any party to the judgment to approach any court or authority to review, recall or reconsider the order. The above principle, however, is subject to exception of fraud.(Paras 35 and 36)
       (iii) Urban Land (Ceiling and Regulation) Act, 1976—Section 34—Revisional Powers—Period of limitation—Even though no period of limitation is prescribed for exercise of revisional jurisdiction by the State Government suo motu, such power must be exercised within a reasonable time.(Para 17)
       (iv) LEGAL MAXIMS—Maxim fraus et jus nunquam cohabitant—Means fraud and justice never dwell together.(Para 22)
       (v) LEGAL MAXIMS—Maxim fraus et dolus nemini patrocinari debent—Means fraud and deceit ought to benefit none.(Para 22)
       (vi) Urban Land (Ceiling and Regulation) Act, 1976—Section 6—Exclusion or non-operation of the Act—Plea that land was used for agriculture or horticulture purposes or that it was having fruit bearing trees, therefore, provisions of the Act not applicable—Maintainability—Constitution of India—Article 136.
       Held : it was never the case of land-owners while filling a form under Section 6 of the Act that the provisions of the Act were not applicable to the land in question because the land was used for agriculture or horticulture purposes or that it was having fruit bearing trees. The exclusion or non-operation of the Act was sought only on the ground that the possession of the land had already been handed over to Port Trust Authorities in 1972 and hence the land cannot become subject matter of the Ceiling Act. In view of the above fact, in our opinion, the High Court was right in passing the impugned order directing the authorities to consider all aspects and pass an appropriate order in accordance with law.(Para 39)
       (vii) Constitution of India—Article 136—Appeal by Special Leave—Scope of powers—Jurisdiction under Article 136 is discretionary and equitable in nature—It is extraordinary in its amplitude—Words ‘Notwithstanding anything in this chapter’—Meaning.
       Held : It is discretionary and equitable in nature.* Clause (1) of the said Article confers very wide and extensive powers on this Court to grant special leave to appeal against any judgment, decree, determination, sentence or order in any cause or matter passed or made by any Court or Tribunal in India. The Article commences with a non-obstante clause, “Notwithstanding anything in this Chapter” (i.e. Chapter IV of Part V). These words are of overriding effect and clearly indicate the intention of the Framers of the Constitution that it is a special jurisdiction and a residuary power unfettered by any statute or other provisions of Chapter IV of Part V of the Constitution. It is extraordinary in its amplitude. Its limit, when it chases injustice, is the sky. Such power, therefore, may be exercised by this Court whenever and wherever justice demands intervention by the highest Court of the country. (Para 40)
       Article 136, however, does not confer a right of appeal on any party. It confers discretion on this Court to grant leave to appeal in appropriate cases. In other words, the Constitution has not made the Supreme Court a regular Court of Appeal or a Court of Error. This Court only intervenes where justice, equity and good conscience require such intervention.(Para 41)

Judgement Key Points

Order 12 Rule 6 of the Civil Procedure Code (CPC) pertains to the procedure for obtaining a judgment in a suit where the defendant has not entered an appearance or has failed to defend the suit, and the plaintiff is entitled to a judgment as a matter of law. Specifically, Rule 6 allows the court to pass a judgment on the basis of the pleadings and evidence presented, without the need for a full trial, when the defendant has not appeared or has not contested the case.

Based on the provided legal document, the court emphasized the fundamental principle that a judgment obtained by playing fraud on the court is a nullity and non est in the eye of law. It also highlighted that any order or judgment procured through fraud is considered a nullity and must be treated as non-existent by all courts, regardless of whether it was obtained at the first instance or on appeal. The document underscores the importance of integrity in judicial proceedings and the court's inherent power to set aside judgments obtained by fraud, including through mechanisms such as recall of orders or re-opening proceedings.

While the document does not explicitly discuss Order 12 Rule 6, the principles outlined reinforce the importance of ensuring that judgments are based on genuine and truthful proceedings. If a judgment is obtained through fraudulent means, it can be challenged and set aside under the court’s inherent powers, and the procedural provisions like Order 12 Rule 6 would be relevant in the context of seeking a judgment based on undisputed facts or pleadings, especially when a party defaults or fails to contest.

In summary, Order 12 Rule 6 provides a procedural mechanism for courts to swiftly pass judgments in cases where the defendant is in default, but the overarching legal principle from the document emphasizes that any judgment—whether obtained by default or otherwise—must be free from fraud and played in accordance with truth and justice. If a judgment is tainted by fraud, it is considered a nullity and can be challenged under the court’s inherent powers, regardless of the procedural stage.

JUDGMENT

C.K. Thakker, J.—All these appeals have been preferred by the appellants against common judgment and order passed in WAMP No. 1879 of 2001 in W.A. No. 109 of 1997, WAMP No. 1880 of 2001 in W.A. No. 292 of 1998 and Contempt Case No. 1008 of 2001. By the said order, the High Court recalled common judgment and order passed on April 27, 2000 in Writ Appeal Nos. 109 of 1997 and 292 of 1998. A direction was also issued to the authorities under the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as ‘the Ceiling Act’) to complete proceedings within the stipulated period.

2. The case has a long and checkered history starting from early seventies of the last century. Appellants herein are the owners of land bearing Survey Nos. 3/1, 3/2 and 4 admeasuring 18 acres, 39 cents of Village Kancharapalem, District Visakhapatnam. It was their case that Visakhapatnam Port Trust (‘Port Trust’ for short) wanted to acquire land for public purpose, namely, for construction of quarters for its employees. The Chairman of the Port Trust, therefore, sent a requisition letter to the District Collector, Visakhapatnam for acquiring land admeasuring 45 acres, 33 cents of Survey Nos. 1, 2, 3 and 4 of Kancharapalem Village. Advance possession of the land of the appellants, bearing Survey Nos. 3/1, 3/2 and 4 admeasuring 18 acres, 39 cents was taken over by the Estate Manager of the Port Trust on August 29, 1972 by private negotiations. The State Authorities, thereafter, were requested by the Port Trust Authorities to take appropriate proceedings for acquisition of land under the Land Acquisition Act, 1894. According to the appellants, in the statement recorded on August 29, 1972, Akella Suryanarayana Rao stated that he had handed over possession of the land to the Estate Manager of the Port Trust. Mr. Akella also stated that there was a dispute regarding land with tenant Koyya Gurumurthy Reddy under Andhra Pradesh Lands Tenancy Act. It was also the case of the appellants that the Port Trust deposited with the Government the amount of compensation payable to the owners of the land. The land acquisition proposals were approved by the Port Trust as also by the Government of India.

3. It was further case of the appellants that a preliminary notification under sub-section (1) of Section 4 of the Land Acquisition Act was for the first time issued on August 10, 1973 but nothing further was done in the matter. The Ceiling Act came into force in the State of Andhra Pradesh on February 17, 1976. It, inter alia, covered the Visakhapatnam Urban Agglomeration. The appellants filed their declarations taking the stand that possession of land had already been handed over to Port Trust Authorities even before the Act came into force and the provisions of the Ceiling Act, therefore, would not apply to such land. In the light of the above factual position and the case of the appellants, the Special Officer and Competent Authority, Urban Land Ceiling, Visakhapatnam vide his order dated May 25, 1981 in C.C. No. 6143 of 1976 declared that the land-owners of Survey Nos. 3/1, 3/2 and 4 were ‘non-surplus land holders’. Then the Government again issued notification under sub-section (1) of Section 4 of the Act on August 29, 1981. Urgency clause under Section 17(4) was not invoked since the possession of land was already with the Port Trust Authorities. A declaration under Section 6 was issued on October 12, 1982. No award, however, was passed.

4. According to the appellants, the Chief Engineer of Port Trust in reply to a query by the Land Acquisition Officer, clarified vide his letter dated December 19, 1985 that actual and physical possession of the land was not taken by Port Trust as the tenant did not vacate possession of the land. It appears that in view of the above letter that physical possession of land was not with the Port Trust Authorities, the Special Officer and Competent Authority, Urban Land Ceiling, Visakhapatnam referred the matter to the Com

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2007 Supreme(SC) 304

IMPORTANT POINTIt is a settled proposition of law that a judgment, decree or order obtained by playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of law.

Cases Referred (9)

IMPORTANT POINT
It is a settled proposition of law that a judgment, decree or order obtained by playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of law.