SHAHEED MEMORIAL SOCIETY(REGD) v. PROMILA KISHORE ORS

show that the discovery far the first time of a concealed fraud would constitute a cause of action arising later than the cause of action arising at the date of the commission of the fraud. If it were otherwise, it is difficult to understand why His Lordship should have considered the second question, that is, whether the fraud should have been committed by the defendant personally or by some one for whose action he was directly responsible. This question would not have arisen if the discovery of the fraud did not give a cause of action. The English principle, which I have stated above, therefore, applies to this case, and the cause of action must be regarded as having accrued on the discovery of the fraud and the cause of action to have the decree set aside is not barred by prescription. I have thought it necessary to discuss the effect of the judgment in Dodwell's case, as section 118 of the Trust Ordinance was not referred to at the argument, and its application to the present case was not discussed. But I have little doubt that it applies and must be given effect to.

83. I must here refer to the judgement of the Supreme Court rendered in Yeswant Deorao Deshmukh vs. Watchand Ramachandd Kothari, MANU/SC/0033/1950 which was cited by Mr. Ganju to buttress his argument that the starting point of limitation on the ground of fraud gets shifted only when the fraud committed prevents the revelation of the knowledge of the right available to the litigant to institute an action. 83.1 A close perusal of the facts obtaining in Yeswant Deorao case would

I.A. No. 4570/2014 in CS (OS) No. 1451/2012 Page 38 of 42 show that the decree holders application for execution was rejected on the ground that its execution was sought beyond the period of limitation [i.e. 3 years] which commenced from the date when the earlier application for execution was rejected. In the appeal before the Supreme Court, several grounds were raised by the decree holder to assail the judgement of the Bombay High Court, one of which was, as indicated above, that the judgement debtor had prevented execution of the decree by suppressing the fact that he was the owner of Prabhat newspaper. 83.2 In other words, the argument advanced was that a discovery of this fact, which, according to the decree holder, was a fraudulent act of deliberate omission by the judgement debtor, gave a fresh starting point of limitation for execution of the decree. The Supreme Court on the first point agreed with the decree holder that the conduct of the judgement debtor was fraudulent within the meaning of Section 484 (2) of the CPC and, therefore, escaped the bar of the 12 years period provided in the said provision for execution of the decree. The relevant observations, in this behalf, are contained in paragraph 15 of the judgement which read as follows.

4 48. (1) Where an application to execute a decree not being a decree granting an injunction has been made, no order for the execution of the same decree shall be made upon any fresh application presented after the expiration of 12 years from (a) the date of the decree sought to be executed, or, (b) where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, the date of the default in making the payment or delivery in respect of which the applicant seeks to execute the decree. (2) Nothing in this section shall be deemed - (a) to preclude the Court from ordering the execution of a decree upon an application presented after the expiration of the said term of twelve years, where the judgment-debtor has by fraud or force prevented the execution of the decree at some time within twelve years immediately before the date of the application; or (b) to limit or otherwise affect the operation of article 183 of the first Schedule to the Indian Limitation Act, 1908.

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15. The appellant thus escapes the bar of the 12 years' period and he has a fresh starting point of limitation from the date of the fraud for section 48 of the Civil Procedure Code. In other words, the decree- holder has another 12 years within which he can execute his decree. 83.3 On the aspect of applicability of Section 18 of the 1908 Limitation Act [which is pari materia with Section 17 of the 1963 Limitation Act], the Supreme Court noted that in the courts below, no such ground had been taken. The Court did not grant the benefit of Section 18 of the 1908 Limitation Act to the decree holder, principally, on the ground that nothing prevented him from taking recourse to execution proceedings as he was aware that the judgement debtor owned properties other than Prabhat newspapers qua which action could have been taken. It is in this context that the Court noted in paragraph 22 of the judgement [based on the language of subsection (2) of Section 18 of the 1908 Limitation Act] that only when the fraud employed prevents the decree holder from making an application to execute the decree that the said provision can come to his aid for triggering a fresh limitation period. 83.4 Clearly, the said judgement is distinguishable on facts and insofar as the first aspect is concerned, to which I have made a reference above, it supports the case of the Society.

84. Likewise, the judgement of the Karnataka High Court in the matter of Babulal Vaktaji Shah and Ors. vs. Chandabai, MANU/KA/0121/1989 is distinguishable on facts. This was a case where the respondent/plaintiff had filed a suit for rendition of accounts qua a partnership firm in which her husband was a partner. Upon the death of her husband, the remaining partners, according to the respondent/plaintiff, assured her that she had been included as a partner in the newly constituted firm a fact which, later on,

I.A. No. 4570/2014 in CS (OS) No. 1451/2012 Page 40 of 42 proved to be false. This propelled institution of a suit for rendering accounts. 84.1 The courts below, while rejecting her claim in the new firm, sustained her claim for accounts to the extent of the share of her deceased husband. The objection taken by the appellant/defendant that the suit was barred by limitation was rejected by the courts below by taking recourse to Section 17 of the 1963 Limitation Act. The High Court reversed the view of the courts below on the ground that the fraud employed by the erstwhile partners did not prevent the respondent/plaintiff to file a suit for accounts and share in profits upon automatic dissolution of the firm with the death of her husband under the provisions of Section 42 (c) of the Partnership Act. 84.1 In reaching this conclusion, the Single Judge of the Karnataka High Court relied upon Yeswant Deorao case which, as noted above, is distinguishable on facts. A close reading of paragraph 8 of the judgement would show that the respondent/plaintiff had not alleged or established that the machinations of the defendant had prevented her from seeking accounts. The Court also observed that the respondent/plaintiff had not pleaded or deposed that she could not ask for accounts or that defendants had, in any manner, prevented her from seeking accounts concerning the former firm. In the instant case, the split share certificate were never produced by the Company/Sachdevas till after this Court, in the 2006 suit, passed the order dated 20.09.2007. As noted above, the judgement is not applicable to the fact situation obtaining in the instant case.

85. In a nutshell, Section 17 of the 1963 Limitation Act [which is pari materia to Section 18 of the 1908 Limitation Act], embody the fundamental principles of justice and equity, whereby, a party should not be prevented, from taking recourse to legal proceedings, when certain facts and materials

I.A. No. 4570/2014 in CS (OS) No. 1451/2012 Page 41 of 42 are deliberately concealed from it. The opposite party, which has acted fraudulently, should not be allowed to use the statute of limitation as a shield where fraud is employed. [See: Pallav Sheth vs. Custodian and Others, (2001) 7 SCC 549 at paragraphs 38 to 48]

86. The matter can be looked at from another point of view which has a bearing on the conduct of the parties which filed, in the 2006 suit, the transfer deeds concerning 260 shares which became the subject matter of forensic examination by the forgery detection cell of the Indian Security Press. If, at the trial, it ultimately emerges that a fraud had been employed in the execution of documents-in-issue i.e. the transfer deeds it would have consequences in law for the persons involved in introducing the documents in Court. The principle that fraud unravels everything would get triggered at that juncture. [See Lazarus Estate Ltd. vs. Beasley, (1956) 1 QB 702. (Cited with approval in Bhaurao Dagdu Paralkar vs. State of Maharashtra and Ors., MANU/SC/0495/2005)]

13. In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, Lord Denning observed at pages 712 & 713, "No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything." In the same judgment Lord Parker L J observed that fraud vitiates all transactions known to the law of however high a degree of solemnity. (page 722)

87. Therefore, to close the instant suit, at this juncture, by allowing the captioned application, would cause, to my mind, serious impediment in the examination that the Court would be called upon to conduct about the genuineness of the documents-in-issue i.e. the transfer deeds. Conclusion: -

88. Thus, given the foregoing discussion, I am of the view that the prayer

I.A. No. 4570/2014 in CS (OS) No. 1451/2012 Page 42 of 42 made in the captioned application lacks merit and hence deserves to be dismissed. It is ordered accordingly.

89. It is, however, made clear that observations made hereinabove will not impact the trial of the suit on merits. RAJIV SHAKDHER, J OCTOBER 12, 2020 Click here to check corrigendum, if any