“Fraud Unravels Everything” 2.0 –
Supreme Court Re-emphasises Fraud as an Over-Riding Exception to the Doctrine of Merger
(Commentary on Vishnu Vardhan @ Vishnu Pradhan v. State of Uttar Pradesh, 2025 INSC 884)

1. Introduction

The judgment delivered on 23 July 2025 by a three-judge Bench (Surya Kant, Dipankar Datta & Ujjal Bhuyan, JJ.) revisits two enduring maxims of common-law jurisprudence: (i) “fraud unravels everything”, and (ii) “actus curiae neminem gravabit” (an act of the court shall prejudice no one).
At its core lies a labyrinthine property/compensation dispute among three erstwhile co-owners (Vishnu Vardhan, Reddy Veeranna and T. Sudhakar) relating to valuable land in NOIDA, but the judgment’s true significance transcends this factual matrix. The Court carves out, in emphatic terms, a broad fraud-exception to the doctrine of merger, and re-asserts its “inherent” power (read with Art. 142 & Order LV r. 6 of the Supreme Court Rules, 2013) to recall even its own final judgments if they were procured by fraud or deliberate suppression.

2. Background of the Case

• 1997-2005: The trio jointly purchase ~2.18 bighas (un-acquired) in Chhalera Banger, later acquired by NOIDA. Numerous suits, PoAs, compromise decrees and land-records mutations ensue.
• 28 Oct 2021: Allahabad High Court, in W.P.(C) 2272/2019 filed by Reddy alone, declares him sole owner and enhances compensation to Rs 1.10 lakh/sqm.
• 5 May 2022: In Reddy Veerana v. State of U.P. (2022 14 SCC 252) a 2-judge Bench of the SC dismisses NOIDA’s appeal and partly allows Reddy’s, but expressly notes it is “not adjudicating title”.
• 2023: Vishnu, who was never impleaded before HC or SC, approaches Supreme Court with:
  • Civil Appeal 7777/2023 (against the HC order – leave granted on 21 Nov 2023)
  • W.P.(C) 673/2023 under Art. 32 (seeking declaration of co-ownership & other reliefs)
  • Misc. applications for modification/recall, review etc.
• Controversy: Vishnu alleges that Reddy procured the HC decree, and consequently the SC order, by suppressing vital facts: long history of joint litigation, cancellation of PoA, pendency of Vishnu’s 2020 suit challenging an earlier “compromise” decree, etc.

3. Summary of the Judgment

1. The Court allows Vishnu’s civil appeal; sets aside the HC order dated 28 Oct 2021 as void ab initio.
2. As a corollary, it recalls its own judgment dated 5 May 2022 (Reddy Veerana) holding that it too was vitiated by fraud.
3. Vishnu’s Art. 32 writ is dismissed (no prima facie FR infringement), but the appeal route suffices.
4. The writ petition before the HC (W.P.(C) 2272/2019) is remanded for de-novo hearing with directions to implead Vishnu & Sudhakar; interim safeguards over compensation amount/securities continue.
5. The Court clarifies the limited role of Art. 32, sheds fresh light on maintainability, forum shopping, simultaneous appeal/review etc.

4. Detailed Analysis

4.1 Precedents Cited & Their Influence

Case	Proposition utilised
S.P. Chengalvaraya Naidu v. Jagannath	Fraud renders a decree non est; courts must refuse process to dishonest litigants.
Lazarus Estates v. Beasley	Denning LJ’s maxim “fraud unravels everything”; forms bed-rock.
A.V. Papayya Sastry v. Govt. of A.P.	Fraud is an exception to stare decisis and merger; nullifies even final judgments.
Kunhayammed v. State of Kerala	Classic exposition of doctrine of merger; Court distinguishes its application when fraud enters.
Naresh Shridhar Mirajkar	No writ lies against judicial orders—used to dismiss Vishnu’s Art. 32 petition.
Express Newspapers; Royappa; Maneka Gandhi	Brought in to explain Article 14’s anti-arbitrariness content & natural justice.

The Bench harmonises these lines: while Kunhayammed is the default rule on merger, Papayya Sastry carves an explicit carve-out for fraud. The present case expands that carve-out by illustrating five scenarios where merger may fail (¶123 of judgment), chief among them being fraud.

4.2 Legal Reasoning

1. Fact-finding on Fraud. The Court painstakingly traces Reddy’s “volte-face” litigation conduct—filing in concert with co-owners when convenient, and springing exclusive-ownership pleas behind their backs otherwise. Key red flags:
   • 2001 suit compromised overnight without impleading Vishnu.
   • 2006 suit where PoA had allegedly been cancelled months earlier, yet a “joint compromise” surfaces via the same attorney (later found partner in Reddy’s firm).
   • Total suppression of Vishnu’s 2020 declaratory suit while the 2019 writ was pending.
2. Non-joinder & suppression = breach of natural justice. Drawing on Order I Rule 9/10 CPC principles and decisions such as Poonam and Ajay Ishwar Ghute, the Court holds that Reddy’s deliberate choice not to implead necessary parties amounts to practising fraud upon the Court.
3. Threshold vs. Merits. Because fraud permeates the origin of jurisdiction itself, the Bench rightly decides it before maintainability objections (¶34-36).
4. Doctrine of Merger – qualified. The Bench:
   • Reiterates default rule (Kunhayammed).
   • Explains why straightjacket application would deny an innocent non-party (Vishnu) any remedy—an outcome courts must eschew (actus curiae).
   • Enumerates circumstances (fraud, larger public interest, partial appeals, etc.) where merger will not operate.
   New Precedential Holding:
   “A judgment or order of this Court obtained by suppression or fraud stands on no higher footing than one of a subordinate court; it may, and indeed must, be recalled…. The doctrine of merger is subservient to the duty to prevent injustice.”
   (¶124-125, 140)
5. Inherent Powers & Art. 142. Order LV r. 6 SC Rules expressly saves inherent powers; the Bench treats its recall of the 2022 judgment as an exercise of such powers buttressed by Art. 142 to do “complete justice”.
6. Art. 32 Writ – Declined. The Court clarifies that loose averments of Art. 14/19/21 breach are insufficient. If another efficacious legal channel (appeal/review) exists, Art. 32 cannot be used as a short-cut.
7. Remand & Safeguards. Because title/compensation questions require fuller record, the matter is remanded to the High Court with:
   • directions to implead all co-owners,
   • liberty to record oral evidence if needed, and
   • continuation of protective orders over Rs 300 cr worth securities.

4.3 Potential Impact

• Expanded Anti-Fraud Jurisdiction. The ruling fortifies courts’ readiness to pierce procedural bars (merger, stare decisis, limitation) when fraud is demonstrated—particularly important in land-acquisition and compensation matters where public funds are at stake.
• Guidance on Art. 32 Drafting. Litigants can no longer rely on cursory invocations of “arbitrariness” to sustain an Art. 32 petition; detailed pleadings of FR violation are mandatory.
• Precedent for Non-Parties. Affirms that non-parties bound/prejudiced by a decree can seek leave to appeal even after dismissal of an earlier appeal by another party.
• Administrative Vigilance for Authorities. NOIDA’s role is subjected to suo-motu contempt; emphasizes duty of public bodies to adopt transparent stand and to contest dubious claims affecting public exchequer.
• Litigation Strategy. Counsel will need to screen historic litigation for potential fraud; compromise decrees and PoAs will attract closer judicial scrutiny.

4.4 Complex Concepts Simplified

Fraud on the Court

Deliberate deception that affects the judicial process itself (e.g., hiding necessary parties, forging documents); unlike ordinary fraud, it strikes at the court’s very legitimacy.

Doctrine of Merger

Once an appeal is decided, the lower court’s operative order merges into the appellate order. But, as held here, not where the appellate order itself is tainted by fraud or where the appellant was a different party and vital issues remained un-adjudicated.

Inherent Powers (Order LV r. 6 SC Rules)

A safety-valve clause acknowledging the Supreme Court’s residuary authority to prevent abuse of process; invoked here to recall its own earlier judgment.

Actus Curiae Neminem Gravabit

The court will not, through its procedure or orders, inflict injustice on a litigant—used to justify bypassing procedural technicalities.

Article 32 vs. Article 226

Art. 32 (SC) is limited to enforcement of Fundamental Rights; Art. 226 (HC) covers legal rights generally. Hence Vishnu’s writ was dismissed, but his appeal (legal right) succeeded.

5. Concluding Remarks

The Supreme Court’s decision in Vishnu Vardhan represents a forceful reaffirmation that integrity of the judicial process outweighs finality. Where litigants abuse procedure to divert public money or extinguish co-owners’ rights, the Court will not hesitate to:

1. Recall its own final decisions;
2. Refuse shelter under procedural doctrines (merger, limitation, forum-shopping); and
3. Protect innocent non-parties and the public exchequer alike.

Equally important is the Court’s message that Article 32 cannot be a default repository for all grievances; precision in pleading FR infringement is obligatory. The judgment therefore strikes a calibrated balance: stringent on fraud, yet mindful of procedural discipline—an authoritative restatement worthy of the maxim it revitalises: fraus et jus nunquam cohabitant.