Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of Order XXII, rule 10, Civil Procedure Code,
  • provision of Order XXII, rule 10, Civil Procedure Code,
  • Order XXII, rule 10, Civil Procedure Code,
  • SECTION 151 CIVIL PROCEDURE CODE
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of Order XXII, rule 10, Civil Procedure Code,
  • provision of Order XXII, rule 10, Civil Procedure Code,
  • Order XXII, rule 10, Civil Procedure Code,
  • SECTION 151 CIVIL PROCEDURE CODE
Smart Summary

Judgment Summary — Bishan Narain, J.

Factual and Procedural Background

The owner of a three-storeyed building in Khari Baoli, Delhi was Fazl-ul-Rehman. Mithan Lal alleged that in May 1949 he took the entire premises on lease at a monthly rental of Rs. 118/2/- and occupied the same, but was forcibly dispossessed from portions of the property by Laiq Ram and by Murli Dhar and his sons. Mithan Lal filed two separate suits for possession and recovery of damages; the suits were consolidated. By a trial court judgment dated 31st August 1954, possession was decreed in favour of Mithan Lal, while his claim for damages was dismissed.

The defendants filed two appeals: one before this Court and one before the District Judge, Delhi (the latter was transferred to this Court). The matters became Regular First Appeals Nos. 115-D of 1954 and 136-D of 1955 and were heard together. Interim stay (in Letters Patent Appeals) operated from 25th November 1954 to 23rd May 1956. The parties subsequently presented compromise terms and this Court disposed of both appeals in accordance with the compromise on 23rd May 1956. The principal term recorded in the compromise was that Mithan Lal let the premises to the defendants at monthly rentals of Rs. 60/- and Rs. 8/8/- respectively.

On 4th June 1956, one Ram Dhan made two applications to this Court under Order XXII rule 10, Civil Procedure Code; these applications form the subject of the present proceedings. Ram Dhan alleged that on 13th December 1954 Mithan Lal had transferred his rights under the decrees by registered documents to him, and therefore Mithan Lal had no rights to compromise the appeals; he pleaded collusion and asked the Court to set aside the compromise under section 151, Civil Procedure Code, and to implead him under Order XXII rule 10. Notice issued on 8th June 1956. The petitions were not actively pursued and came up for hearing for the first time on 23rd April 1958. Mithan Lal's statement was recorded on 14th May 1958; no other witness was examined. The Court ultimately dismissed the miscellaneous petitions and ordered parties to their own costs. Capoor, J. concurred.

Legal Issues Presented

  1. Whether a person claiming to be an assignee of rights under pending decrees (here, Ram Dhan) can invoke section 151, Civil Procedure Code, to set aside consent decrees obtained by the parties to the appeal and be impleaded under Order XXII rule 10.
  2. Whether the appropriate remedy for an alleged fraudulent compromise affecting a non-party assignee is an application under the Court's inherent jurisdiction (section 151) or a separate suit.
  3. What is the effect of omission by an assignee to seek impleadment under Order XXII rule 10 during the pendency of the suit or appeal?

Arguments of the Parties

Ram Dhan's Arguments

  • He asserted that on 13th December 1954 Mithan Lal had transferred his rights under the decrees to him by registered documents, and thus Mithan Lal lacked the right to compromise the appeals.
  • He alleged collusion between Mithan Lal and the other parties (Laiq Ram and Murli Dhar etc.) to deprive him of his rights under the transfer deeds.
  • He prayed that the compromise be set aside under section 151, Civil Procedure Code, and that he be impleaded as a respondent under Order XXII rule 10 to protect his asserted rights.
  • It was also argued on his behalf that the compromise amounted to a fraud on the Court, entitling the Court to relieve him of its consequences.

Mithan Lal's Arguments

  • Mithan Lal denied having assigned his rights in the decrees to Ram Dhan. He admitted signing three documents (Exhibits C.1, C.2 and C.3) but said they were not assignments of the decrees.
  • He stated that he and Ram Dhan were business partners (business carried on in the name "Ram Dhan Mithan Lal" since 1950) and that the documents related to a payment of Rs. 1,500/- as partial payment of profits due to Mithan Lal; they were not intended to transfer decrees.
  • Mithan Lal contended that the proper remedy for Ram Dhan was to file a regular suit and that an application under section 151, Civil Procedure Code, was not competent to overturn a consent decree affecting his rights.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Veeraraghava Reddi v. Subba Reddi, I.L.R. 43 Mad. 37 Shows that a purchaser (assignee) who is not a named party will be bound by litigation and by a compromise recognised by the Court. Used to support the proposition that an interest that devolves during pendency binds the assignee even if not impleaded; compromise recognised by judge binds purchaser.
T.K. Chakrapani Iyer v. Ammalu Amma, A.I.R. 1949 Mad. 870 Establishes that omission to apply under Order XXII rule 10 does not affect the course of the suit/appeal and that the provision is enabling (to safeguard assignees) but not mandatory. Relied on to hold that if an assignee does not invoke Order XXII rule 10, he does so at his own peril and the decision between parties on the record will bind him.
J.C. Galstaun v. Pramathanath Ray, A.I.R. 1929 Cal. 470 Held that a consent decree alleged to be fraudulently procured should be attacked by a separate suit; relief of vacating/amending a consent decree is proper in a suit and not by invoking inherent jurisdiction. Applied as authoritative support for the proposition that section 151 is not the proper remedy to set aside consent decrees procured by alleged fraud; a regular suit is the correct remedy.
Suresh Chandra Sen v. Jogesh Chandra Sen, A.I.R. 1939 Cal. 658 Followed the view that consent decrees attacked on grounds such as fraud should be challenged by a separate suit, not by section 151. Used to reinforce the rule that inherent jurisdiction under section 151 is not the appropriate vehicle to avoid a consent decree.
Laraiti Devi v. Sia Ram, A.I.R. 1957 All. 820 Affirms that consent decrees cannot be quashed by an application under section 151 and that a remedy by regular suit is open to the aggrieved party. Relied on to show consistent judicial treatment across jurisdictions that section 151 is not the route to invalidate consent decrees alleged to be fraudulently obtained.
Keshav Ramkrishan Bhatt Phadke v. Subba Manga Naik, A.I.R. 1939 Bom. 490 Follows earlier precedent (Yusuf Ismailbhai) that disputes about consent decrees and authority to present compromises are to be litigated by suit rather than by application under inherent jurisdiction. Followed to support that an applicant cannot challenge the validity of a consent decree in the original proceeding by section 151 when another remedy exists.
Yusuf Ismailbhai Abdullabhai Lalji v. Abdullabhai Lalji, I.L.R. 56 Bom. 231 Explains that a consent decree is an agreement with the superimposition of a court order and can be invalidated on the same grounds that would invalidate an agreement. Used to observe that the impugned compromise may be attacked on grounds applicable to agreements, but such issues are suited to a separate suit rather than an inherent jurisdiction application.
Kusum Kumari v. Biseswar Lal Marwari, A.I.R. 1935 Pat. 439 Patna High Court's view that a consent decree could be avoided only by filing a separate suit; section 151 was not competent for that purpose. Relied upon to demonstrate consistent precedent that section 151 cannot be invoked to set aside consent decrees.
Chutur Prasad Sah v. Mt. Bishuni Kuer, A.I.R. 1943 Pat. 13 Also supports the Patna High Court position that a plea of fraud to avoid a consent decree requires a regular suit. Applied as part of the line of authority that the appropriate remedy is a suit and not an application under section 151.

Court's Reasoning and Analysis

The Court proceeded by first examining the factual dispute and the legal framework. The existence of conflicting factual assertions was emphasised: Ram Dhan claimed an assignment of Mithan Lal's rights by registered documents dated 13th December 1954, whereas Mithan Lal denied any transfer and said the documents reflected a partnership payment arrangement.

The Court identified the relevant procedural provision, Order XXII rule 10, Civil Procedure Code, as an enabling mechanism to implead an assignee to continue a suit or appeal, but noted that it does not compel an assignee to apply during the pendency of the suit or appeal. Reliance was placed on precedent (notably T.K. Chakrapani Iyer v. Ammalu Amma) for the proposition that an omission to apply under Order XXII rule 10 does not alter the course of the suit and that an assignee who fails to use this provision does so at his own risk.

The Court analysed the contention that the consent decree was procured by collusion and therefore amounted to fraud on the Court. It held that because Ram Dhan was not a party when the consent decrees were passed, Mithan Lal was under no legal duty to apply to the Court to implead him, particularly when Mithan Lal disputed the assignment. The Court drew a distinction between fraud upon the Court and fraud upon a private person: the alleged collusion, if true, would be fraud upon Ram Dhan (a non-party), not a fraud on the Court itself. Because the compromise was not challenged as untrue by Ram Dhan in its fact, the Court could not treat it as a fraud on the Court.

The Court reviewed the established line of authority (including J.C. Galstaun and other decisions) holding that where a party seeks to avoid a consent decree on grounds such as fraud, the correct remedy is a separate suit and not invocation of the Court's inherent jurisdiction under section 151. The Court emphasised that those authorities were typically considered where the aggrieved person was a named party; the present case was even less appropriate for section 151 because Ram Dhan was not a party when the compromise was recorded.

The Court concluded that the disputes of fact (existence of assignment; allegations of fraud or misrepresentation) cannot be satisfactorily resolved in a short inherent-jurisdiction application under section 151 and were better suited to resolution in a regular suit where fuller evidence could be led. For reasons of law and convenience the Court refused to entertain the application under section 151 and declined to set aside the consent decrees or implead Ram Dhan via that route.

The Court also observed delay in prosecuting the applications and noted that the applicant himself bore some responsibility for the time wasted.

Holding and Implications

PETITIONS DISMISSED.

Direct effect on the parties:

  • The miscellaneous petitions filed by Ram Dhan under section 151, Civil Procedure Code, seeking to set aside the consent decrees and to be impleaded under Order XXII rule 10 were dismissed.
  • The parties were left to their own costs as ordered by the Court.
  • The Court indicated that, if so advised, Ram Dhan may pursue his asserted rights by instituting a regular suit — which the Court regarded as the appropriate remedy to adjudicate contested factual pleas such as assignment, fraud and misrepresentation.

Broader implications: The Court applied and reaffirmed established authority that an application under section 151 is not the correct vehicle to avoid a consent decree alleged to be procured by fraud; the appropriate remedy is a separate suit. The opinion did not announce a novel legal principle beyond the precedents it applied and followed.

Disposition

Taking all circumstances into account, the Court dismissed the miscellaneous petitions and left the parties to their own costs. Capoor, J. concurred.

    Laiq Ram v. Mithan Lal, Etc.

    Bishan Narain, J.:— The relevant facts leading to these present proceedings are these: One Fazl-ul-Rehman is the owner of a three storeyed building situated in Khari Baoli, Delhi. Mithan Lal alleged that in May 1949 he took the entire premises on lease on a monthly rental of Rs. 118/2/- and occupied the same but that he was forcibly dispossessed from different portions of the property by Laiq Ram and also by Murli Dhar and his sons. He filed two separate suits against these persons for possession and for recovery of damages for use and occupation. Both these suits were consolidated in the trial Court, and by judgment dated 31st August 1954 the trial Court decreed possession claimed by Mithan Lal but dismissed his claim for damages. The defendants filed two separate appeals, one in this Court and one in the Court of the District Judge, Delhi. The appeal filed before the District Judge, was transferred to this Court and the two appeals were Regular First Appeals Nos. 115-D of 1954 and 136-D of 1955 respectively and both these appeals were ordered to be heard together. The defendants in both these appeals applied for stay of delivery of possession and it was in Letters Patent Appeals that an interim stay order was passed which remained in force from 25th November 1954 to 23rd May 1956. The parties applied to this Court in both the Regular First Appeals for consent decrees on the ground that the parties had compromised the dispute. This court disposed of both the appeals in accordance with the terms of the compromise on 23rd May 1956. The main term of the agreements is that Mithan Lal let the premises to the defendants on a monthly reutal of Rs. 60/- and Rs. 8/8/- respectively. These facts are not in dispute and they are matters of record.

    2. One Ram Dhan made two separate applications to this Court on 4th June 1956 under Order XXII rule 10, Civil Procedure Code, and the present proceedings arise out of these applications. As the facts are common, it will be convenient to decide both these applications by this judgment.

    3. The case of Ram Dhan is that on 13th December 1954 Mithan Lal decree-holder had transferred his rights under the decrees under appeal to him by registered documents and that consequently Mithan Lal had no rights left under the decrees and could not compromise the appeals. He further alleged that the parties to the litigation knew of this assignment and the compromise was collusively made by Mithan Lal on one side and Laiq Ram and Murli Dhar etc. on the other side to deprive Ram Dhan of his rights under the transfer deeds. On these allegations Ram Dhan prayed that the compromise be set aside under section 151, Civil Procedure Code, and the petitioner be impleaded in the two appeals as respondent under Order XXII rule 10, Civil Procedure Code. Kapur, J. issued notice on 8th June 1956 and it was accepted on behalf of Mithan Lall on the same day. The petitioner took no steps to get these petitions heard and decided expeditiously and the cases came up for hearing for the first time on 23rd Aoril 1958, i.e after the expiry of about two years, when Falshaw & Mehar Singh, JJ. directed Mithan Lal to appear before them on 7th May 1958 and to make a statement. Mithan Lal filed a written reply to the application of Ram Dhan on 1st May 1958 and supported it with an affidavit. Ram Dhan also applied for examination of three witnesses. Mehar Singh, J. ordered that summons be issued to the witnesses proposed to be examined by Ram Dhan, but stated in the order that whether they would be examined or not on the date fixed would be decided at that time. The statement of Mithan Lal was recorded by this Court on 14th May 1958 as a Court witness and then the cases were adjourned for arguments. No other person was examined.

    4. Mithan Lal in his statement denied that he had assigned any of his rights in the decrees to Ram Dhan. He stated that he had signed the three documents, Exhibits C.1, C.2 and C.3 but not as an assignment of the decrees etc. In his written reply he stated that he and Ram Dhan were partners in a business which was carried on in the name of Ram Dhan Mithan Lal since 1950 and that Ram Dhan in spite of his repeated demands had not rendered accounts and had not paid profits due to him. According to Mithan Lal's allegations Ram Dhan agreed to pay Rs. 1,500/- toward partial payment of the profits of the business and these documents were executed merely to evidence this transaction and that these documents were not intended to evidence any transfer of decrees obtained by Mithan Lal against Laiq Ram and Murli Dhar etc.

    5. From the above narration of facts, it is clear that the assignment set up by Ram Dhan is denied by Mithan Lal. The case of Ram Dhan is that Mithan Lal had got the appeals disposed of by consent collusively and with a view to defeat his rights by suppressing the fact that he had no interest left in the subject-matter of the appeals. On the other hand Mithan Lal denies the factum of assignment in favour of Ram Dhan, and in his written reply and in his oral statement in this Court he disclosed a plea of fraud and misrepresentation on the part of Ram Dhan.

    6. It is conceded by Shri Gurbachan Singh on behalf of Ram Dhan that the application under Order XXII, rule 10, Civil Procedure Code, can be entertained only after the ex parte decrees have been set aside and after the appeals have been restored to their numbers in this Court. This is obviously correct as under Order XXII rule 10, Civil Procedure Code, an assignee can be brought on the record only to continue a suit or appeal but not after the same has been decided or disposed of by a consent decree or after contest. It is well established that when an interest has come or devolved on a person during the pendency of the suit or appeal, then he is bound by the decision even if he is not brought on the record or even if he is not a party to the suit or appeal by name. As observed by Seshagiri Ayyar, J. in Veeraraghava Reddi v. Subba Reddi . I.L.R 43 Mad. 37, 46., at page 46, if the purchaser is not a party to the suit, he will be bound by the litigation which was in its inception contentious whatever may be the process by which the ultimate conclusion is reached, whether by obtaining after active contest a decision by the Judge or by a compromise outside Court and its recognition by the Judge. It is equally well established that mere omission to make an application under Order XXII rule 10, Civil Procedure Code, does not effect the course of a suit or appeal. The provisions of Order XXII, rule 10, Civil Procedure Code, do not compel the assignee or party to a suit or appeal to make an application during the pendency thereof. The provision is merely of enabling character. If no application is made, then the suit or appeal will be continued as heretofore and will be decided between the parties on the record, but the decision will bind the assignee on whom interest in the subject-matter in the litigation has devolved during the pendency of the suit or appeal (T.K Chakrapani Iyer v. Ammalu Amma . A.I.R 1949 Mad. 870.). The Courts are not concerned whether or not the parties to the litigation or the assignee thereof has taken advantage of this enabling provision of Order XXII rule 10, Civil Procedure Code. It is, therefore, obvious that this provision has been enacted mainly to safeguard the interest of an assignee who gets interest in the subject-matter of the suit or appeal. It cannot be gain-said that an assignee so circumstanced should promptly take advantage of this statutory provision, but if he does not do so, then he does so on his own peril and at his own risk.

    7. In the present case the alleged assignee did not come on the record of the appeals and the parties in the appeals arrived at a compromise outside Court and got the appeal decided in accordance with the compromise. This compromise, according to Ram Dhan, affects his rights adversely and he is desirous of impeaching it. Obviously, if he is the assignee of the rights involved in the appeals and if the consent decrees have been obtained without his consent, then he has a grievance against which he must have a remedy. The only question involved in these proceedings is whether this remedy is by an application under section 151, Civil Procedure Code, or by a separate suit. Ram Dhan wants the dispute to be decided under section 151, Civil Procedure Code, while Mithan Lal has urged before us that this application is not competent and that the proper remedy of Ram Dhan is to file a regular suit for this purpose.

    8. It was strenuously urged before us on behalf of Ram Dhan that the disposal of the appeals on the basis of the compromise amounted to a fraud on this Court and therefore, according to the learned counsel, it is incumbent on this Court to relieve him of the consequences of this fraud, particularly when the effect of such an order will be that the appeals pending in this Court will be revived and will have to be decided on merits. I see no force in this contention. In the present case Ram Dhan was not a party to the appeals when consent decrees were passed therein. Mithan Lal was under no legal or statutory obligation to apply to this Court to implead Ram Dhan, particularly when he does not accept the factum of transfer. As I have already remarked, in the absence of an application under Order XXII, rule 10, Civil Procedure Code, this Court could only decide the appeals between the parties on the record. Therefore, it cannot be said that any fraud was committed on this Court by any of the parties to the litigation when an application was made to dispose of the appeals in accordance with the terms of the compromise. All that can be said by Ram Dhan is that in the circumstances parties to the appeals had colluded to defraud him and that would be a fraud on him and not on this Court. In this connection it must not be forgotten that the factum of the compromise between the parties to the appeals is not challenged by Ram Dhan.

    9. It has been repeatedly held by almost all the Courts in India that whenever a party to a litigation desires to avoid a decree, then he must do so by a regular suit and the remedy of an application under section 151, Civil Procedure Code, is not available to him. In a case where a party applied under section 151 to avoid a consent decree on the ground that he had entered into a compromise, but “the whole” instead of “the balance” were interpolated in the terms placed before the Court, it was held by the Calcutta High Court that the only remedy of the aggrieved party was to file a separate suit. Rankin C.J in J.C Galstaun v. Pramathanath Ray . A.I.R 1929 Cal. 470:—

    “Now, it appears to me, that, if a party desires to have a consent decree amended or vacated upon the ground that it was fraudulently procured, his proper course, and indeed his only course, is to proceed by separate suit for the purpose. The matter is certainly grave enough to deserve a separate suit. The questions which have to be decided are entirely different from those at issue in the original suit. The relief sought is a very well recognised form of relief appropriate to a suit. In English practice, it is old law that a fresh action is necessary to set aside a consent decree upon the ground of fraud and that such relief is not properly sought in an action of review. * * * If the relief can be properly obtained in a separate suit, it does not appear that there is any justification for invoking section 151 at all.”

    10. This decision has been followed in Suresh Chandra Sen v. Jogesh Chandra Sen . A.I.R 1939 Cal. 658.. A similar view has been taken in Laraiti Devi v. Sia Ram . A.I.R 1957 All. 820.. In the Allahabad case a party desired to avoid consent decree on the ground that it had been got fraudulently signed by the son of the opposite side, and the Division Bench held that the consent decree could not be quashed on an application made under section 151, Civil Procedure Code, and that it was open to the aggrieved party to avoid the effect of the decree by a regular suit. It was observed in this judgment that it is not open to any party to invoke the inherent jurisdiction of the Court when he had another remedy open to him but did not pursue it. A similar view was taken by Lokur, J. in Keshav Ramkrishan Bhatt Phadke v. Subba Manga Naik . A.I.R 1939 Bom. 490., following the decision in Yusuf Ismailbhai Abdullabhai Lalji v. Abdullabhai Lalji . I.L.R 56 Bom. 231.. In this judgment the applicant's grievance was that he had never authorised the counsel to present the compromise into Court and that the consent decree made thereupon did not bind him. Lokur, J. held that this dispute could be challenged only in a regular suit. The Patna High Court had also taken the view that a consent decree could be avoided only by a separate suit as such a plea of fraud amounts to a plea of fraud upon a party and an application under section 151, Civil Procedure Code, was not competent: vide Kusum Kumari v. Biseswar Lal Marwari . A.I.R 1935 Pat. 439. and Chutur Prasad Sah v. Mt. Bishuni Kuer . A.I.R 1943 Pat. 13..

    11. It is, therefore, clear that it has been repeatedly held that if a party desires to avoid a consent decree on the ground of fraud, then the only remedy is by way of suit and not by an application under section 151, Civil Procedure Code. The present case stands on a much stronger footing. In all these judgments the aggrieved persons were by name parties to the litigation while Ram Dhan in the present case was not a party to the appeals. It is obvious and well settled that Courts cannot be called upon to invoke their inherent jurisdiction in a litigation on the application of a person who is not a party to that litigation. It is only in special cases that the Code of Civil Procedure enables Courts in exercise of their discretion to implead parties who were not originally impleaded as parties. The provision of Order XXII, rule 10, Civil Procedure Code, makes it quite clear that the appeals could proceed in the absence of Ram Dhan even though he was only person interested in the result of the litigation on the side of appellant assuming that the appellant had transferred his rights to Ram Dhan. I am, therefore, of the opinion that Ram Dhan cannot invoke the inherent jurisdiction of this Court under section 151, Civil Procedure Code, to avoid the consent decrees passed in Regular First Appeals No. 115-D of 1954 and 136-D of 1955.

    12. There is another way of looking at the matter. It is well settled that a consent decree is only an agreement with super imposition of a Court's order and that it can be invalidated on the same grounds as will invalidate an agreement between the parties: vide Yusuf Ismailbhai Abdullabhai Lalji v. Abdullabhai Lalji. In the present case Ram Dhan impugns the agreement between Mithan Lal and Laiq Ram etc. on the ground of collusion and wishes to avoid the consent decree on the ground of fraud. On the other hand Mithan Lal denies transfer in favour of Ram Dhan and alleges fraud and misrepresentation. Obviously, these pleas cannot be satisfactorily decided in an application under section 151, Civil Procedure Code. These pleas can be more appropriately decided in a regular suit.

    13. For these reasons, I am of the opinion that in law and also on ground of convenience Ram Dhan cannot and should not be allowed to get his dispute with Mithan Lal relating to the alleged transfer by the latter decided by means of an application under section 151, Civil Procedure Code. If so advised, he may seek his remedy by a regular suit.

    14. It is unfortunate that considerable time has been wasted in the disposal of these miscellaneous applications but Ram Dhan himself is to a certain extent responsible for this delay.

    15. Taking all the circumstances into consideration I dismiss these miscellaneous petitions but leave the parties to their own costs.

    16. Capoor, J.:—I agree.

    Petitions dismissed.

    Use AI to get other relevant cases.

    Comments

    Laiq Ram v. Mithan Lal, Etc.
    (Aug 18, 1958)