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Sadho Saran Rai v. Anant Rai

Patna High Court
May 11, 1923
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Judgment Summary — Das, J. (with Kulwant Sahay, J. concurring)

Factual and Procedural Background

The respondents (plaintiffs) instituted a suit for partition of joint family properties; the properties were listed in several schedules annexed to the plaint. On 3 January 1921 a petition of compromise was filed in Court alleging that "All the properties sought to be partitioned have been partitioned and under the said partition the properties are in possession and occupation of the parties in equal halves." The schedule annexed to that compromise petition (Schedule A) comprised only an insignificant portion of the properties enumerated in the plaint's schedules and omitted, for example, milkiat properties. Alterations and apparent tampering of figures in the schedule were discovered (e.g., amounts due from certain persons were reduced to half for the plaintiffs and allocated half to defendants). The learned Subordinate Judge of Arrah, satisfied with the pleader's initials on the altered schedule, passed a decree in terms of the compromise.

The plaintiffs later asserted that the compromise presented and filed was not the compromise they had signed: they said the petition was copied in multiple leaves, that intervening pages were extracted before filing, and that alterations were made to to their detriment. They also asserted they had not engaged Babu Indra Deo Sahay as their pleader and had entrusted the petition to defendant Sadho Saran for filing. Evidence was led, including testimony from Projit Rai (a plaintiff) and from Indra Deo Sahay (the pleader who signed the compromise petition as filed).

The learned Subordinate Judge set aside the consent decree. The defendants appealed. This opinion reviews that appeal and the correctness of setting aside the consent decree.

Legal Issues Presented

  1. Whether the Court has power to set aside a consent decree in summary proceedings (by review or by exercise of inherent jurisdiction) where it is shown that the decree was procured by fraud upon the Court (i.e., that there was no consent in fact and the Court was misled into signing the decree).
  2. Whether, alternatively, a party alleging that his consent was obtained by fraud (as distinct from alleging there was no consent at all) must resort to a substantive suit to have the decree set aside rather than summary proceedings before the Court.

Arguments of the Parties

Plaintiffs' (respondents') arguments

  • The compromise petition filed in Court was not the document the plaintiffs had executed: it had been altered and only certain pages (first and last) were filed while intervening pages were removed.
  • The schedule filed with the compromise petition omitted most of the properties sought to be partitioned in the plaint and thus materially differed to their detriment.
  • Babu Indra Deo Sahay was not their pleader; the plaintiffs had not asked him to act for them and had relied on defendant Sadho Saran to file the petition; therefore the signatures and the filings did not reflect genuine consent by the plaintiffs.
  • Overall, a gross fraud had been perpetrated upon both the plaintiffs and the Court by procuring a consent decree that the plaintiffs had not in fact agreed to.

Defendants' (appellants') arguments

  • The defendants argued that once a decree has been signed by the Court the proper remedy for a party alleging fraud is to bring a suit to set aside the decree, and that the Court has no jurisdiction to set aside a consent decree merely by summary proceedings or review on the ground of fraud.
  • It was contended that the petition bore the signature of the plaintiffs' pleader (Babu Indra Deo Sahay), and that that signature warranted the assumption that the pleader had authority to settle the case on the terms contained in the petition.
  • Mr. Jayaswal (for the defendants) also pointed to the defendants' written statement, in which they disputed the correctness of the properties set out in the schedule and asserted that many of the properties were not joint family properties.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hakimgir v. Basdeo Sahi Where an order is obtained from the Court on the allegation that both parties had assented to it and one party asserts that he never consented, the Court may review and recall the order. Used to support the proposition that a Court may investigate the factum of consent where it is alleged that there was no consent in fact and that the Court was induced to sign the decree by a false representation.
Peary Choudhury v. Sonoo Das It is the inherent power of every Court to correct its own proceedings when it has been misled; the Court has complete jurisdiction to recall an order upon being apprised of the true facts. Relied upon to confirm the existence of inherent jurisdiction to set aside a decree procured by misleading the Court.
Basangowda Hanamantgowda Patil v. Churchigirigowda Where a compromise was presented signed by a pleader who was not authorized, and decree passed, the Court may set aside the decree and reopen the suit; the power is inherent and does not depend on a specific Code section. Quoted at length (including Chandavarkar, J.'s reasoning) and adopted as persuasive authority that the Court can correct its proceedings when a decree was obtained by persuading the Court to sign it though the consenting party never in fact consented.
Vilakathala v. Vayalil (Madras High Court) The Madras High Court has taken the view that a Court has inherent power to correct its proceedings where it has been misled. Referred to as a supporting authority from the Madras High Court endorsing the inherent-power approach.
Decisions of the Calcutta, Bombay and Madras High Courts (general reference) Broadly laid down that a Court has inherent power to correct its own proceedings when satisfied it was misled by one of the parties. Placed in context to show that several High Court decisions recognize the inherent jurisdiction to set aside orders obtained by misleading the Court; used as background authority supporting the court's conclusion.

Court's Reasoning and Analysis

The court proceeded in these principal analytic steps:

  1. Fact-finding on the compromise document: The Court compared Schedule A of the compromise petition with the schedules to the plaint and found that Schedule A covered only an insignificant portion of the properties claimed in the plaint and omitted key items (e.g., milkiat properties). Alterations in figures and allocations (notably reductions and reallocation of bond debts) were noted, and tampering of entries was observed (for example, amounts due from specified persons had been changed so that plaintiffs received only half of what earlier entries suggested).
  2. Assessment of witness evidence: The plaintiffs' testimony (e.g., Projit Rai) asserted that the compromise filed was not the document they had signed; that only first and last pages were filed and intervening pages removed; and that they had not engaged Indra Deo Sahay as their pleader but had entrusted the petition to Sadho Saran. Indra Deo Sahay's own evidence admitted that he was not the plaintiffs' regular pleader, that he did not know the plaintiffs, and that he signed upon being told by an unidentified person that he was acting for the plaintiffs. The vakalatnama did not list Indra Deo Sahay among pleaders acting for the plaintiffs. Taken together, this evidence led the Court to conclude a deliberate fraud had been practised on the Court.
  3. Legal distinction between fraud on the party and fraud on the Court: The Court emphasized an established distinction in Indian decisions: where a party asserts there was no consent in fact (i.e., the Court was led to believe there was consent when in truth there was none), the Court has power to investigate and set aside the decree in summary proceedings; whereas where a party admits consent but says it was procured by fraud upon that party, the remedy is a suit (the factum of consent may be investigated summarily but the reality of consent, once admitted, cannot be resolved in summary proceedings).
  4. Application of precedent and inherent jurisdiction: The Court reviewed several authorities (Hakimgir v. Basdeo Sahi; Peary Choudhury v. Sonoo Das; Basangowda Patil v. Churchigirigowda; Vilakathala v. Vayalil) that recognize the inherent power of a Court to correct its proceedings when misled. It accepted these authorities as persuasive and concluded that the High Courts' decisions support reopening proceedings where the Court was persuaded to sign a decree to which a party never in fact consented.
  5. Conclusion based on the record: Given the discrepancies in the filed compromise, the witness evidence that the plaintiffs had not authorized the document as filed, and the pleader's admission he was not a regular pleader and did not know the plaintiffs, the Court found a gross and deliberate fraud on the Court and upheld the Subordinate Judge's setting aside of the consent decree.

Holding and Implications

Holding: APPEAL DISMISSED. The Court affirmed the order of the learned Subordinate Judge of Arrah setting aside the consent decree (i.e., the compromise decree was rightly set aside) and dismissed the appeal with costs.

Implications:

  • The direct consequence is that the order setting aside the compromise decree stands (the compromise decree was set aside for being procured by a fraud upon the Court).
  • The Court applied and relied on established authorities recognizing the inherent power of courts to correct their own proceedings when misled; the opinion treats those authorities as persuasive but notes they are not binding on this Court. The judgment does not purport to lay down a novel doctrine beyond confirming the established distinction between fraud upon the Court (which permits summary correction) and fraud upon a party (which may require a suit to impeach the decree).
  • No broader or novel precedent beyond the confirmed application of the inherent-power principle was announced; the effect described in the opinion is limited to the present appeal (i.e., upholding the setting aside of the compromise decree).
Appeal dismissed.

This summary has been prepared exclusively from the text of the provided opinion and contains no information beyond that opinion.

Show all summary ...

Das, J.:— This is an appeal against an order of the learned Subordinate Judge of Arrah by which he set aside a consent decree. The suit in which the consent decree was passed was instituted by the respondents against the appellants for partition of joint family properties. The properties sought to be partitioned were set forth in the several schedules annexed to the plaint. On the 3rd January, 1921, a petition of compromise was filed in the Court. The petition alleged that:

“All the properties sought to be partitioned have been partitioned and under the said partition the properties are in possession and occupation of the parties in equal halves.”

It set out the properties in Schedule A and declared that the parties were and shall be in separate possession of their respective shares. The schedule annexed to the petition deals with an insignificant portion of the properties enumerated in the schedules to the plaint. It does not, for instance, deal with the milkiat properties; and in regard to the bond debts to the joint family, while it awards about Rs. 12,000 to the defendants it gives less than Rs. 6,000 to the plaintiffs. There are important alterations in the schedule which attracted the suspicion of the Court when it was called upon to pass a decree in terms of the compromise. For instance, the whole of the money due from Sathan Choubey, Hargun Rai and Baijnath Rai seemed to have been allotted in the first instance to the plaintiffs; but at the time when the compromise petition was actually filed in Court it was noticed that the figures standing against those persons had been tampered with and that only half the amount due from them was allotted to the plaintiffs and the other half was allotted to the defendants. As I have said, the alterations made in the schedule attracted the suspicion of the Court which called upon the plaintiffs' pleader, Babu Inder Deo Sahay, to initial the alterations. I cannot help thinking that the learned Subordinate Judge should have done well to call upon the plaintiff personally to appear before him and to say whether he had consented to those alterations which were obviously to his detriment; but that course was not adopted and the learned Subordinate Judge was apparently satisfied with the initials of the learned pleader for the plaintiffs and he passed a decree in terms of the settlement. The plaintiff's case is that the compromise actually filed was not the compromise which he signed. His evidence is to the effect that the compromise petition was copied “in six leaves” and that the schedule contained all the family properties sought to be partitioned and that after signing the petition he made it over to Sadho Saran, one of the defendants, for the purpose of being filed in Court. He makes the definite case in his evidence that only the first page and the last page of the compromise petition were retained and that the intervening pages were extracted and were not filed in Court and that alterations were made in the last page without his knowledge but to his detriment. He definitely states that Babu Indra Deo Sahay was not his pleader and that he did not remember which pleader had signed the compromise petition for him and that he did not himself take the petition to any pleader for signature, and that he left it entirely to Sadho Saran relying upon Sadho Saran's honesty in the matter.

Upon the evidence I have no doubt that a gross fraud has been perpetrated, not only upon the plaintiffs but upon the Court itself. The petition definitely states that all the properties sought to be partitioned had been partitioned and that the specifications were given in schedule A to the petition. Now the properties sought to be partitioned are given in different schedules annexed to the plaint. As I have said before, schedule A of the petition of compromise comprises only a very insignificant portion of the properties sought to be partitioned. Mr. Jayaswal contends before us that in their written statement the defendants disputed the correctness of the properties set out in the schedule and that their case in the written statement was that most of the properties sought to be partitioned were not joint family properties at all. That may be so; but where the petition definitely states that all the properties sought to be partitioned have been partitioned, I must assume that the meaning of the petition is that the properties sought to be partitioned in the suit by the plaintiffs have been partitioned. There is no indication in the compromise petition that the plaintiffs had recognized the justice of the defendants' claim that most of the properties sought to be partitioned by him were not joint family properties and that they could not be partitioned. In my opinion it is sufficient to refer to the schedule A annexed to the petition of compromise and to compare it with the properties set out in the schedules to the plaint to hold that the plaintiff's position in this respect is unassailable. It was then argued that the compromise petition bore the signature of the plaintiff's pleader and that it must be assumed that the pleader had authority to settle the case on the terms mentioned in the petition of compromise. The plaintiffs, however, deny that Babu Indra Deo Sahay is their pleader. The evidence of Projit Rai on this point is as follows:

“Indra Deo Sahai was not any pleader. I do not remember which pleader had signed the solehnama petition for me. I have not taken that petition to my pleader for signing it. Sadho Saran had done so on my behalf.”

Babu Indra Deo Sahay has been examined as a witness on behalf of the defendants-appellants. His evidence is that he signed the solehnama petition on behalf and at the request of the plaintiffs. He says that he had enquired from his client that he had compromised and he was satisfied that the plaintiffs had compromised the suit on the terms contained in the petition of compromise as filed by him. In cross-examination he admits that he was not the pleader in the case and that the “party” went to him only when the compromise was to be filed in Court. He also admits that he cannot recognize the different persons that had gone to him, although his impression is that it was Anant Rai, plaintiff No. 1, who saw him in connection with the compromise petition. He adds, however, that he did not know Anant Rai before. He says that the person who saw him told him that he was Anant Rai and he was apparently satisfied with that and signed the compromise petition. The evidence of the pleader, therefore, does not establish that the plaintiffs or any of them engaged him to file the petition of compromise on behalf of the plaintiffs. If indeed any of the plaintiffs were known to him at the time when he was engaged on their behalf it would be impossible to accept the evidence of Projit Rai that the plaintiffs did not engage Babu Indra Deo Sahay as their pleader in the case. The vakalatnama itself strongly supports the case of the plaintiffs. We have carefully examined the vakalatnama and it is a matter of grave suspicion that, though Babu Indra Deo Sahay actually appeared on behalf of the plaintiffs in the matter of the compromise, his name does not appear in the printed list of pleaders appearing in the vakalatnama. It was very strongly contended before us that there is an admission in the petition of the plaintiffs that Indra Deo Sahay was their pleader in the matter. I have read the petition very carefully and I am unable to agree that there is any admission to that effect. No doubt it is not alleged in the petition that Babu Indra Deo Sahay was not their pleader, but it is distinctly stated that it was defendant No. 1 who obtained the signatures of the pleaders of the parties on the petition. There may be an admissions by implication; but there is no clear and definite admission that Babu Indra Deo Sahay was the pleader of the plaintiffs. If the defendants intended to make any point of such admission by implication contained in the petition filed by the plaintiffs they should have cross-examined Projit Rai on this point. The attention of Projit Rai was not drawn to the alleged admission contained in the petition, and, in the absence of any explanation of Projit Rai, I am not disposed to attach much importance to the alleged admission contained in the petition. The evidence is clear and definite that the name of Indra Deo Sahay does not appear in the printed list of Vakils in the vakalatnama and that Babu Indra Deo Sahav was not the regular pleader of the plaintiffs but was only engaged for filing the compromise petition Indra Deo Sahay admits that he did not know the plaintiffs but that he accepted the word of the person who actually saw him and thought that he was acting on behalf of the plaintiffs. I have no doubt whatever that a gross and deliberate fraud has been practised upon the Court and that the Court was persuaded to sign a decree to which the plaintiffs had never consented, and that upon the representation made to the Court that the plaintiffs had consented to it.

The question then arises whether the Court had power to set aside the compromise decree either in review or in the exercise of its inherent power. There is a long list of cases of the Calcutta High Court, of the Bombay High Court and of the Madras High Court in which it has been broadly laid down that a Court has inherent power to correct its own proceedings when it is satisfied that in passing a particular order it was misled by one of the parties. It was urged before us on behalf of the defendants-appellants that the only remedy is by suit and that once the decree has been signed there is no jurisdiction in the Court to set it aside on the ground of fraud. A distinction has been drawn in the cases of the Indian Courts between a fraud practised upon a party and a fraud practised upon the Court. It has been laid down that where the question is whether there was a consent in fact, there is power in the Court to investigate the matter in a properly constituted application and to set aside the decree if it is satisfied that a party never in fact consented to it but that the Court was induced to pass the decree on the fraudulent representation made to it that the party had consented to it, but that where there is a consent in fact, that is to say, where the parties have filed a compromise petition and they admit that they have filed it but one of the parties alleges that his consent was procured by fraud, the Court cannot investigate the matter either in review or in the exercise of its inherent power, and that the only remedy of the party is to institute a suit to set aside the decree on the ground of fraud. In other words, the factum of the consent can be investigated in summary proceedings, but the reality of the consent cannot be so investigated. In Hakimgir v. Basdeo Sahi it was held by Mookerjee and Caspersz, J.J, that where an order is obtained from the Court on the allegation that both parties had assented to it and it is asserted by one of the parties that he never consented to the order in question, it is open to the Court to review the order and recall it. In Peary Choudhury v. Sonoo Das it was held by Chatterjea and Greaves, J.J, that it is the inherent power of every Court to correct its own proceedings when it has been misled and that it has complete jurisdiction to recall the order on being apprised of the true facts. In Basangowda Hanamantgowda Patil v. Churchigirigowda the facts were that in the course of a suit a compromise was presented which was signed by the defendants' pleader who was not especially authorized in that behalf. The Court passed a decree in terms of the compromise. The defendant then applied to set aside the decree on the ground that he did not engage the pleader and that he never authorized the pleader to compromise the suit. The Court set aside the decree and set down the suit for hearing. On appeal it was argued in the High Court that there was no section in the Code which entitled the party to ask the Court to reopen the suit and set aside the decree in a summary manner. Chandavarkar, J., in upholding the contention of the respondent, said as follows: “What the defendant says is that there was a suit against him, and that the suit was declared to have ended by reason of a decree passed with his consent. He never consented, and the result has been that there has been fraud committed upon the Court The Court was persuaded to sign a decree to which the defendant had never consented, and that upon the representation that he had consented to it. Therefore, once the Court is asked to go back upon its own procedure, it is not a question whether there is any section in the Civil Procedure Code to warrant the action of the Court amending its proceedings. It is an inherent power of every Court to correct its own proceedings where it has been misled.” A similar view has been taken in the Madras High Court [see Vilakathala v. Vayalil]. These decisions, though not binding on this Court, are entitled to the greatest respect, and we have been referred to no decision which lays down a contrary rule in cases where it is asserted by a party, not that the consent was obtained from him by fraud, but that there was no consent in fact on his part. As I have said before, a distinction has been made in the Indian Courts between the cases where a party comes to Court and complains that he never consented to the order at all and the cases where a party comes to Court and admits that he did consent to the order but complains that his consent was obtained by fraud. In the one case the fraud is upon the party; in the other case, the fraud is upon the Court; and it is well-established, so far as the Indian Courts are concerned, that the Court has inherent jurisdiction to set aside the order when it is apprised of the fact that it was induced to sign the decree on a fraudulent representation of facts made to it.

In my opinion the order passed by the Court below is right and I would dismiss this appeal with costs.

Kulwant Sahay, J.:— I agree.

Appeal dismissed.