M/S A.H. Wheeler And Co. Pvt. Ltd. vs Kamla Kant Pandey, Ex. Book Stall ...
2012 Latest Caselaw 954 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Judgment reserved on 20.4.2012
 
Judgment delivered on 27.04.2012 
 

 
ORDER ON REVIEW APPLICATION NO. 95800 of 2012 
 
				On behalf of 
 
	M/s A.H. Wheeler and Co. Pvt. Limited, 
 
	23, Lal Bahadur Shastri Marg, Allahabad through its
 
	Director Amit Banerjee			-applicant/appellant
 
				       In
 
	FIRST APPEAL FROM ORDER NO. 4264 OF 2011
 
	M/s A.H. Wheeler and Co. Pvt. Ltd.	- Appellant	
 
				    Versus
 
      	1.	Kamla Kant Pandey
 
							- Defendant			
 
	2.	Raj Kishore Jaiswal
 
	3.	Vijay Kant Gupta
 
	4.	Chhote Lal
 
	5.	Raja Ram Gupta
 
	6.	Bhagwan Das
 
	7.	Umed Babu
 
	8.	Chandra Prakash Sharma
 
	9.	Ramesh Chandra Gupta
 
	10.	Ishwar Dayal Verma
 
	11.	Sudarshan Verma
 
	12.	Chandresh Kumar Singh
 
	13.	Suresh Chandra Gupta
 
	14.	Mahipal Sharma
 
	15.	Ashok Kumar Sharma
 
	16.	Patiram
 
	17.	Awadh Naresh
 
	18.	Satyendra Kumar Jain
 
	19.	Rajnish Kumar
 
	20.	Smt. Suman Singh
 
	21.	Laxman Sharma
 
	22.	Pramod Porwal
 
	23.	Gopal Lal Jogin
 
	24.	Puran Singh
 
	25.	Santosh Kumar Singh
 
	26.	Arun
 
	27.	Kishan Chand
 
	28.	Sanjeev Kumar Gupta			     	
 
					    Respondents (newly impleaded)
 
			*****
 
Hon'ble Sunil Ambwani, J.

Hon'ble Manoj Misra, J.

1. This review application has been filed to review the order dated 01.3.2012 passed by the Court in this First Appeal From Order arising out of an order of ACJM/Additional Civil Judge (SD), Court No. 11, Allahabad dated 21.9.2011, rejecting the application for interim injunction in Original Suit No. 99/2011 (M/s A.H. Wheeler & Co. (P) Limited vs. Shri Kamla Kant Pandey), for handing over the charge of the book stalls at old Delhi Railway Station to the plaintiff-company.

2. In order to appreciate the grounds for reviewing the order, it is necessary to quote the order dated 1.3.2012, which gives the background in which the order was passed with the consent of the parties:-

"1. We have heard Sri P.K. Mukerji and Sri Amit Saxena, learned counsel for the appellant. Sri Arvind Srivastava appears for respondent No.1. Ms. Rashmi Singla along with Sri Rajesh Dwivedi appears for applicant-hawkers, seeking impleadment.

2. On 18.01.2012, we passed the following order:-

We have heard Shri P.K. Mukerji and Shri Amit Saxena for M/s A.H. Wheeler & Co. Pvt. Ltd.-the plaintiff-appellant and Shri Arvind Srivastava for Shri K.K. Pandey, the defendant-respondent.

M/s A.H. Wheeler & Co. Pvt. Ltd. is engaged in carrying on the business of operating railway book stalls as licensee of Government of India at various licensed Railway Station, including the Railway Station Delhi Junction (Old Delhi) Northern Railway, Delhi. It had entered into a contract on 26th May, 2010 with Shri K.K. Pandey, the defendant-respondent, appointing him as agent for the conduct of sale of books, newspapers, periodicals and journals at the appellant's book stalls (M/s A.H. Wheeler & Co. Pvt. Ltd.), and its various units at Delhi Junction (Old Delhi) Railway Station. The contract came into effect from 16.5.2010, with the terms and conditions set out in the indenture.

On some disputes having arisen between the parties on the terms of contract in respect of the sale of the books, periodicals etc., M/s A.H. Wheeler & Co. Pvt. Ltd. filed a Civil Suit No.99 of 2011 in the Court of ACJM, Addl. Civil Judge (SD), Court No.11, Allahabad for permanent injunction. By order dated 21.9.2011 the trial court rejected the application for interim injunction, for handing over the charge of the book stalls to the plaintiff company, giving rise to this first appeal.

By an order dated 3.1.2011, we had referred the matter to the 'Allahabad High Court Mediation and Conciliation Centre', and fixed the matter for hearing on 17.1.2012.

The parties entered into negotiations with the help of the mediators and have arrived at an interim settlement dated 12.1.2012, to prepare inventory and to avoid any hassles, between them, to hand over the charge to the plaintiff-appellant, in presence of the Commissioner authorised by the Court. The parties have agreed to request to the Court to issue appropriate directions for securing the presence of Commissioner and obtaining the assistance of Railway Authorities/ Railway Police/ GRP for restraining/ interference of hawkers in handing over the charge of book stalls etc. and preparation of inventory of the stock of books, magazine, furniture, electrical items attached thereto, counter tables, trolleys and bastas at Delhi Junction (old Delhi Railway Station), Northern Railway, Delhi, to be followed by final settlement of account within the time frame.

Shri K.K. Pandey has resigned from the agency on 14.12.2010 and is no longer willing to continue as the agent of M/s A.H. Wheeler & Co. Pvt. Ltd.. He has also agreed to hand over the inventory of stocks of books/ magazines etc. to M/s A.H. Wheeler & Co. Pvt. Ltd.

The persons running the stalls, and hawkers appointed by Shri K.K. Pandey as agent of M/s A.H. Wheeler & Co. Pvt. Ltd. have no independent right, as they have been appointed/ employed by Shri K.K. Pandey to sell the publications.

In the facts and circumstances and in view of the agreement entered into between the parties, we direct, that Shri K.K. Pandey, the defendant-respondent and his agents/ representatives/ hawkers will hand over the entire stock of books, magazines, furniture, electrical items attached thereto, counter tables, trolleys and bastas at Delhi Junction (Old Delhi Railway Station), Northern Railway, Delhi to M/s A.H. Wheeler & Co. Pvt. Ltd. through its Head of HRD Department Shri S.R. Shukla or any other authorised representatives.

We are informed that Shri Gurbachan Singh, Asstt. Commissioner of Police, Railways, Delhi and Shri S.S. Lathia, SHO, GRP, Delhi Main (Old Delhi) Railway Station, Delhi are the police officers, incharge at the Delhi Main (Old Delhi) Railway Station, Delhi, and Shri R.P. Pandey is posted as Senior Station Manager, Delhi Junction (Old Delhi) Railway Station, Northern Railway, Delhi.

We accept the prayers, and appoint Shri Raj Nath Shukla, and Shri Vikas Budhwar, Advocates of the High Court at Allahabad to reach Delhi on 30th January, 2011 for preparation of inventory and to hand over of the possession of the book stalls, with all the items described as above, to M/s A.H. Wheeler & Co. Pvt. Ltd. through its Head of HRD Department Shri S.R. Shukla, or other authorised representative. We direct the officers mentioned as above, to provide assistance to them for discharging their duties. The counsels shall be paid AC 1st Class return fair and Rs.25,000/- each. The expenses will be borne by both the parties equally. If they have to stay over for another day, they will be paid Rs.15,000/- each for stay of additional day. The parties will make arrangement for their stay in respectable guest house. They will submit their reports to the Court on 2nd February, 2012.

List on 3rd February, 2012, for orders.

3.The Advocate Commissioners, appointed by the Court, have submitted a report on 9.2.2012, in which it is stated that five book stalls, twenty one counter tables and eight trolleys were inspected, their possession was taken, and thereafter inventories were prepared in presence of the representative of the plaintiff-appellant Sri S.R. Shukla. The Station Master and Railway Police helped them in complying with the order of the Court.

4. An impleadment application was filed on 1.2.2012, by 27 hawkers, alleging that all of them except Sri Arun, whose father Sri Chhote Lal was already running a trolley, were engaged by M/s. A.H. Wheeler & Co. Pvt Ltd., through its agent for the last several years; the oldest engagement was made in the year 1961. They were working as hawkers with the plaintiff company, and were thrown out of employment on account of collusive agreement entered into between the plaintiff-appellant and its agent Sri K.K. Pandey, the defendant-respondent.

5. We have referred the matter to the mediation centre. The plaintiff-appellant and defendant-respondent had agreed for taking over possession through the advocate commissioners. A part of the dispute, with regard to settlement of the accounts, is still pending in the mediation centre. We are informed by Sri Amit Saxena, appearing for M/s. A.H. Wheeler & Co., the plaintiff-appellant that the appellant has appointed a new agent, who has, in turn, engaged some new hawkers.

6. Ms. Rashmi Singla submits that the trial court did not grant interim injunction. In the appeal, a collusive agreement has been entered into between the plaintiff-appellant and defendant-respondent, to evict the applicant hawkers, whereas there is nothing against them, nor any allegation of misconduct has been levelled against them.

7. Sri Amit Saxena submits that the appellant is a licencee of railway, which is running book stalls at about 250 Railway Stations across the country. The agents of appellant company arranges the hawkers to provide services of selling published material to the railway passengers. The hawkers do not have agreement with the plaintiff as they were engaged by their agents. The hawkers have no independent rights, flowing from the plaintiff.

8. In order to resolve the dispute, in which interest of 27 hawkers is also involved,, and to avoid depriving livelihood to them, we asked the counsel for the plaintiff-appellant, to make some arrangement to protect their interest.

9. Sri Amit Saxena, expressed some reservations, as the arrangement of selling published material through agents is continuing in almost all the railway stations. We adjourned the proceedings to be taken up after lunch hours to allow the counsel to consult the parties.

10. After consultation with their clients Sri Amit Saxena and Sri P.K. Mukerji appearing for the plaintiff-appellant M/s. A.H Wheeler Co. Pvt Ltd and Ms. Rashmi Singla appearing for the hawkers have come up with a practical solution to resolve the issue.

11. Sri Amit Saxena, appearing for the appellant M/s. A.H. Wheeler & Co instructed by Sri Amit Mukherje, Director of Company, undertakes that they will not make any fresh arrangement to engage new hawkers. They will continue with the arrangement of selling published materials, either by themselves or through their agents by engaging the same 27 hawkers who are the applicants before us and have been impleaded in this appeal. They will be given back their counter tables, trolleys, bastas at the same place (old Delhi Railway Station). The entire inventory items prepared by the Advocate Commissioners will be handed over back to them. They will continue to sell the published material, sourced to them by the plaintiff-company through their agents.

12. Ms. Rashmi Singla appearing for the newly impleaded hawkers has given an undertaking that the hawkers will not sell any material or items, which have not been sourced through the plaintiff company. They will continue to render theirs services for selling such items from their sale counters/trolleys allotted to them; wear uniforms and batches, and will abide by all the terms and conditions which were being followed by them, or put by the railway authorities.

13. We make it clear that we have not adjudicated or decided any issue, nor we have decided the status of the applicant-hawkers in respect of their engagement. It will be open to the plaintiff-appellant, to continue with the arrangement of sale of published material, which is permissible under the licenced agreement with the railways.

14. Ms. Rashmi Singla also undertakes on behalf of the applicant-hawkers that the that the suits filed by them in the District Courts at Delhi or any other proceeding drawn by them, with regard to the present matter, shall be withdrawn by them.

15. With this order passed on the undertaking given by both the parties, the only dispute, which survives is the settlement of accounts between the plaintiff-appellant and Sri K.K. Pandey, the defendant-respondent. We hope that the matter will be settled between them at the mediation centre.

16. List this case on 26.3.2012.

17. The order will be carried out with immediate effect.

18. Let a certified copy of this order be supplied to learned counsel for the parties on payment of usual charges by tomorrow."

3. This application has been filed to review the order on the following grounds:-

"1. Because the alleged undertaking is beyond contractual obligation of the applicant.

2.Because in view of the fact that hawkers are engaged solely by agent, there is no privity of contract between the applicant and hawkers, undertaking to re-engage such hawkers can not be implemented and is incapable of being performed by the applicant.

3.Because undertaking, given by the applicant was to the effect that efforts will be made through the new agent to re-engage the same 27 hawkers.

4.Because the undertaking as recorded in the order dated 01.03.2012 is against the written contractual agreement between the applicant's company and new agent.

5.Because written contractual agreement gives absolute right to the agent to engage as many hawkers of his own choice as per his own business needs and applicant's company has no role in the same.

6.Because the undertaking as recorded in the order dated 01.3.2012 does not convey through intention of applicant and is beyond his contractual right.

7.Because the undertaking recorded is incapable of actual performance at the behest of applicant.

8.Because the applicant is contractually incompetent to give undertaking as recorded in the order.

9.Because the applicant had undertaken only to make efforts through new agent for re-engagement of 27 hawkers."

4. It is submitted by Shri Amit Saxena arguing on behalf of the applicant in presence of Shri P.K. Mukherji, a senior counsel representing the company, that by the order dated 01.3.2012 the High Court had allowed the impleadment application of the 27 hawkers, who were earlier engaged by Shri Kamla Kant Pandey, ex-agent and in order to protect the interest of erstwhile hawkers, had asked the counsel for applicant to make some arrangement to protect their rights. The counsel obtained instructions from Shri Amit Banerjee-the deponent of the affidavit supporting the review petition, on which the deponent had asked the counsel that they would impress upon the new agent to re-engage the same 27 hawkers for sale of published materials. It is stated that after the submission of the report of the Commissioner by which the property of the company was handed over by the Advocate Commissioner to the representative of the company, the company had, in the meantime, appointed one Shri Anand Narain Mishra as its new agent for Old Delhi Railway Station and handed over trolleys, bastas, counter tables etc. along with published material meant for sale to him and he had also commenced his operation w.e.f. 01.01.2012 by making his own arrangement regarding engagement of new hawkers.

5. Shri Amit Saxena submits that in paragraph-11 of the order dated 1.3.2012, it was recorded that the deponent had undertaken not to make any fresh arrangement to engage new hawkers and will continue with arrangement of sale by engaging the same 27 hawkers. The undertaking does not reflect the current position inasmuch as, as has already been stated that the applicant has no role of appointing or engaging hawkers by itself. Under the written agreement, it is purely business discretion of agent to engage as many hawkers of his choice and therefore it is not possible for applicant's company to force the agent to engage particular person or persons as hawkers, but the applicant's company in due deference to the wishes of this Hon'ble Court immediately wrote to new agent to try and engage the same 27 hawkers at the Old Delhi Railway Station. The new agent informed the company by its letter dated 6.3.2012, that the hawkers were not ready to enter into any agreement or contract and do not obey the orders of agent, and that under the contract, he had the sole discretion in appointing hawkers of his choice. In view of the aforesaid, it is apparent that the applicant has taken all measures available to him to protect the interest of erstwhile hawkers, but the undertaking as recorded in the order dated 1.3.2012 needs to be reviewed, and in view of the facts brought on record, the undertaking to the effect that the applicant shall re-engage those 27 hawkers, needs to be deleted from the aforesaid order.

6. Shri Amit Saxena has relied upon Rup Chand Gupta vs. Raghuvansi Private Limited and another AIR 1964 SC 1889 in support of his submission, to dispel the doubts of the court of a collusive agreement to obtain order of the court, that in the circumstances of the case, it cannot be assumed that there was no collusion between the plaintiff-appellant and the defendant. He submits that the hawkers are not employees of the plaintiff-company. The plaintiff-company can appoint any person as agent, who has, under the contract with the plaintiff-company, liberty to engage any number of hawkers. There was no compulsion for the plaintiff-company to engage the hawkers, even if they were working prior to appointment of the defendant as the agent.

7. In Rup Chand Gupta's case the Supreme Court, in the circumstances of the case, found that there was no collusion between the plaintiff and defendant, to avoid the Calcutta Thika Tenancy Act, 1949 to evict Land and Bricks Thika Tenancy of Raghuvansi. The collusion was defined as follows:-

"9. One of the simplest definitions of collusion was given by Mr. Justice Bucknill in Scott v. Scott (1913) L.Rs. (PD) 52. "Collusion may be defined", said the learned Judge, "as an improper act done or an improper refraining from doing an act, for a dishonest purpose". Substantially the same idea is expressed in the definition given by Whatron's Law Lexicon, 14th Edition, p. 212. viz., "Collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of a judicial tribunal for some sinister purpose". This definition of collusion was approved by the Court in Nagubai Ammal & ors., v. B. Shamma Rao and ors."

8. In the present case, the plaintiff-appellant company impleaded the hawkers in the trial court and thereafter made an application to delete them as defendants in the suit. A settlement was arrived at in the Mediation Centre to take the trolleys, bastas and other published material from the hawkers on which Advocate Commissioners were appointed by the court. The defendant did not resist and rather agreed to the request of the plaintiff-appellant to appoint the advocate commissioners to oust the hawkers. The object was to remove the hawkers, and not to take over the assets of the plaintiff-company from the defendant, or to settle the accounts. A mock fight was put up before the court with the ultimate object of ousting the hawkers.

9. Ms. Rashmi Singla, learned counsel appearing for the 27 hawkers, who were thereafter on the undertaking of the applicant allowed to continue, states that they have never refused to work under M/s A.H. Wheeler and Co. Pvt. Ltd or its agent. She submits that the company had filed a collusive suit impleading Shri K.K. Pandey as defendant. The 27 hawkers represented by her were impleaded in the suit but were later on deleted. The injunction was refused by the trial court. The Company filed the First Appeal From Order and sought a direction for the hawkers to hand over their trolleys, bastas and published materials. The entire object was to oust the hawkers illegally, by obtaining the orders of the Court. The Court referred the matter to the Mediation Centre, where both the parties entered into a partial agreement, only to oust the hawkers. The plaintiff-appellant and the defendant no. 1-respondent, did not agree to resolve the dispute, as there was none. The agreement did not settle the accounts and that the accounts have not been settled even now by a subsequent settlement at the Mediation Centre. She submits that by a clever design a fraud was played upon the Court. When the hawkers were impleaded and the Court realised that an order has been obtained by consent, with the ulterior object only to oust the hawkers, the Court impressed upon the parties to take back the hawkers. She submits that Shri Amit Saxena, after taking instructions from Shri Amit Banerjee-the Director of the plaintiff-appellant company had given a clear and unequivocal undertaking that they will not make any fresh arrangement to engage new hawkers and will continue with the arrangement of selling their published materials either by themselves or through their agents by engaging the same 27 hawkers, who were applicants for impleadment and were impleaded in the appeal. On this undertaking she had also given an undertaking that the hawkers will not sell any material or items, which were not sourced through the plaintiff-company. They will continue to render their services for selling such items from their sale counter/trolleys allotted to them; wear uniform and badges and will abide by all the terms and conditions, which were followed by them and put by the railway authorities. There was no ambiguity in the order passed by the Court on a clear and specific undertaking given by the parties. The order is a consent order in which the consent was given after seeking instructions from the parties without any coercion or conditions.

10. Ms. Rashmi Singla submits that the plaintiff-appellant wants to wriggle out of the undertaking given to the Court on the ground that he has entered into a fresh arrangement of agency with one Shri Anand Narain Mishra, who has been appointed by the Company as its agent. She submits that the hawkers had filed suits in the subordinate court in Delhi in which injunction orders were granted. On the persuasion of this Court, the hawkers have withdrawn their suits. They have changed their legal position during the pendency of this proceedings.

11. We are informed by Ms. Rashmi Singla that Shri Anand Narain Mishra had filed a Special Leave to Appeal (Civil)......./2012 (CC 5245-5246/2012) against the order dated 1.3.2012, which is sought to be reviewed. The SLP was permitted to be withdrawn with permission to file the Special Leave Petitions along with the main petition, with liberty to approach the High Court, and place all the facts in support of his cause. The order dated 21.3.2012 passed by the Supreme Court is quoted as below:-

"Taken on board.

These petitions are directed against order dated 01.03.2012 passed by the Division Bench of the Allahabad High Court in F.A.F.O. No. 4264 of 2012.

After making some submissions, Shri Pallav Shishodia, learned senior counsel appearing for the petitioner made a request that his client may be permitted to withdraw the application for permission to file the special leave petitions along with the main petition with liberty to approach the High Court and place all the facts in support of his cause and if any order adversely affecting his interest is passed then to file a fresh special leave petition.

The request of the learned senior counsel is accepted and leave is granted to the petitioner to withdraw the application for permission to file the special leave petitions as also the main petition with liberty in terms of the prayer made."

12. Shri Anand Narain Mishra-the agent of the plaintiff-appellant has not filed any application so far.

13. Shri Anand Narain Mishra has no independent legal status. He is an agent of the plaintiff-company. He was engaged during the pendency of the proceedings after the 27 hawkers were thrown out on the consent order passed between the plaintiff and the defendant (the erstwhile agent). The agency created during the pendency of the appeal should have abided the orders in the appeal.

14. In the facts and circumstances of the case, we are constrained to believe that the plaintiff appellant company and the defendant no.1 colluded in filing of suit at Allahabad to oust the 27 hawkers at the old Delhi Railway Station. Having failed to obtain an order from the trial court, they approached this Court, and entered into an agreement at the Mediation Centre. Shri Arvind Srivastava appearing for Shri K.K. Pandey, defendant-respondent no. 1, agreed with the plaintiff-appellant, to hand over possession of assets, which were actually in possession of hawkers. He put up a mock fight, agreeing to all the suggestions. The Court, believing their bonafides, passed an order directing the hawkers to hand over possession of the assets of the company to the agent of the company. The orders were carried out. It later on transpired from the application of 27 hawkers, who were impleaded in the appeal, that the entire attempt was to oust them. The dispute between the plaintiff-company and the defendant respondent no.1 was sham. They never intended to contest the matter and had colluded to obtain orders from the Court. At no point of time Shri K.K. Pandey put any defence or even protested to the manner in which the possession was agreed to be taken.

15. The intentions have come out in the open with the statement of Shri P.K. Mukerji, who was asked for the reasons not to engage the same 27 hawkers. He fairly stated that the company was loosing business and that if the same hawkers are allowed to sell the published materials sourced by the company, a difficult situation may arise in respect of the hawkers engaged by the company all over the country at about 250 stations. The statement is candid, but has come to us as a shock, as it has exposed the attempt of the company to use the powers of the Court to oust the hawkers. We expressed our anguish in the Court that in such situation the company may land itself into serious problem inasmuch the Court may be constrained to observe that a fraud has been played on it and that such observations will affect the licence of the company to vend published materials given by the Ministry of Railways. Shri P.K. Mukerji insisted that the company is not willing to take back the 27 hawkers. His statement at the bar has established that the plaintiff-appellant company prepared the grand design to dupe the Court, and obtained orders by putting up a mock fight between the licencee and its agent, only with the object of throwing away the hawkers. Shri K.K. Pandey has only signed on the dotted lines.

16. A fraud has indeed been played upon the Court in obtaining an order by collusion to oust the 27 hawkers. We tried to resolve the situation for the benefit of the plaintiff-appellant company to allow it to engage the same 27 hawkers. The company gave an undertaking to the Court through his counsel on 1.3.2012, who is now trying to wriggle out of the situation, as it has not served its purpose.

17. We are pained to observe that our powers have been used by the plaintiff to achieve oblique purposes. In such a situation in order to protect the interest of all the parties, we gave yet another opportunity to the plaintiff appellant company to re-engage the 27 hawkers, who have been working for decades altogether for the company. The counsels appearing for plaintiff-appellant company have not agreed to our request, and appear to have the interest of their client above their duties towards the Courts. They have not acted as officers of the Court, and still believe that they have not done anything wrong.

18.In A.V. Papayya Sastry and others vs. Govt. of A.P and others (2007) 4 SCC 221 the Supreme Court explained the consequences, where any judgment or order is obtained by the party by playing fraud on the Court. The Supreme Court observed in paragraphs 21 to 33, as follows:-

"21. Now, it is well settled principle of law that if any judgment or order is obtained by fraud, it cannot be said to be a judgment or order in law. Before three centuries, Chief Justice Edward Coke proclaimed;

"Fraud avoids all judicial acts,

ecclesiastical or temporal".

22.It is thus 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. Such a judgment, decree or order by the first Court or by the final Court has to be treated as nullity by every Court, superior or inferior. It can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings.

23.In the leading case of Lazarus Estates Ltd. v. Beasley, (1956) 1 All ER 341 : (1956) 1 QB 702 : (1956) 2 WLR 502, Lord Denning observed:

"No judgment of a court, no order of a Minister, can be allowed to stand, if it has been obtained by fraud."

24.In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p.644, explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was 'mistaken', it might be shown that it was 'misled'. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside, if the court was imposed upon or tricked into giving the judgment.

25.It has been said; Fraud and justice never dwell together (fraus et jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari debent).

26. Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the loss of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of 'finality of litigation' cannot be stretched to the extent of an absurdity that it can be utilized as an engine of oppression by dishonest and fraudulent litigants.

27.In S.P. Chengalvaraya Naidu (dead) by LRs. V. Jagannath (dead) by LRs. & Ors. (1994) 1 SCC 1 : JT 1994 (6) SC 331, this Court had an occasion to consider the doctrine of fraud and the effect thereof on the judgment obtained by a party. In that case, one A by a registered deed, relinquished all his rights in the suit property in favour of C who sold the property to B. Without disclosing that fact, A filed a suit for possession against B and obtained preliminary decree. During the pendency of an application for final decree, B came to know about the fact of release deed by A in favour of C. He, therefore, contended that the decree was obtained by playing fraud on the court and was a nullity. The trial court upheld the contention and dismissed the application. The High Court, however, set aside the order of the trial court, observing that "there was no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence". B approached this Court.

28.Allowing the appeal, setting aside the judgment of the High Court and describing the observations of the High Court as 'wholly perverse', Kuldip Singh, J. stated:

"The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean-hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax- evaders, bank-loan- dodgers and other unscrupulous persons from all walks of life find the court - process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation".

(emphasis supplied)

29.The Court proceeded to state:

"A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would he guilty of playing fraud on the court as well as on the opposite party".

30. The Court concluded:

"The principle of 'finality of litigation' cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants".

31. In Indian Bank v. Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550 : JT 1996 (7) SC 135, referring to Lazarus Estates and Smith v. East Elloe Rural District Council, 1956 AC 336 : (1956) 1 All ER 855 : (1956) 2 WLR 888, this Court stated;

"22. The judiciary in India also possesses inherent power, specially under Section 151 C.P.C., to recall its judgment or order if it is obtained by Fraud on Court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected party to file a separate suit for setting aside the Decree obtained by fraud. Inherent powers are powers which are resident in all courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the Constitution of the Tribunals or Courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rules, protect its officers from indignity and wrong and to punish unseemly behaviour. This power is necessary for the orderly administration of the Court's business".

(emphasis supplied)

32. In United India Insurance Co. Ltd. v. Rajendra Singh & Ors., (2000) 3 SCC 581 : JT 2000 (3) SC 151, by practising fraud upon the Insurance Company, the claimant obtained an award of compensation from the Motor Accident Claims Tribunal. On coming to know of fraud, the Insurance Company applied for recalling of the award. The Tribunal, however, dismissed the petition on the ground that it had no power to review its own award. The High Court confirmed the order. The Company approached this Court.

33. Allowing the appeal and setting aside the orders, this Court stated;

"15. It is unrealistic to expect the appellant company to resist a claim at the first instance on the basis of the fraud because appellant company had at that stage no knowledge about the fraud allegedly played by the claimants. If the Insurance Company comes to know of any dubious concoction having been made with the sinister object of extracting a claim for compensation, and if by that time the award was already passed, it would not be possible for the company to file a statutory appeal against the award. Not only because of bar of limitation to file the appeal but the consideration of the appeal even if the delay could be condoned, would be limited to the issues formulated from the pleadings made till then.

16.Therefore, we have no doubt that the remedy to move for recalling the order on the basis of the newly discovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation. No Court or tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim.

17. The allegation made by the appellant Insurance Company, that claimants were not involved in the accident which they described in the claim petitions, cannot be brushed aside without further probe into the matter, for, the said allegation has not been specifically denied by the claimants when they were called upon to file objections to the applications for recalling of the awards. Claimants then confined their resistance to the plea that the application for recall is not legally maintainable. Therefore, we strongly feel that the claim must be allowed to be resisted, on the ground of fraud now alleged by the Insurance Company. If we fail to afford to the Insurance Company an opportunity to substantiate their contentions it might certainly lead to serious miscarriage of justice".

(emphasis supplied)

19. In the present case, with the pleadings in the review petition and the insistence of the counsels appearing for both the plaintiff and defendant to allow the new agent to appoint new set of hawkers, we have uncovered the design with which the entire litigation was initiated. As observed by us, it was the mock fight put up by the plaintiff/appellant-company and Shri K.K. Pandey-defendant no. 1. When they did not succeed to get interim order from the trial court, they gave a joint statement in the First Appeal From Order to appoint advocate commissioners to take over charge from the hawkers. The Court did not agree and directed them to approach the Mediation Centre from where they brought a partial agreement to appoint commissioner to take over the assets and to oust the hawkers. After the assets were taken over from the hawkers, the company immediately appointed a new agent who engaged new set of hawkers. When the hawkers applied and became party to the proceedings, and the Court was informed that they have been thrown out without hearing them or giving them any opportunity to present their case, their counsels gave an undertaking that they will be engaging the same hawkers through the new agent. As soon as the order was passed, a review petition has been filed alleging, that the plaintiff/appellant-company is unable to honour its undertaking, leaving the old hawkers in the same position in which they were ousted. Having succeeded in the design to oust the 27 hawkers, the plaintiff appellant company has virtually admitted at the bar, that the entire attempt was only to throw the 27 hawkers and not to resolve any dispute.

20. We are of the opinion, that the entire litigation was with an oblique purpose of throwing away the 27 hawkers. There was no lis between the plaintiff/appellant-company and defendant no. 1, which was sought to be resolved by filing the suit.

21. Fraud vitiates all benefits, which have been drawn under it. The plaintiff/appellant-company and defendant no. 1 are, therefore, not entitled to any relief from this Court. We, therefore, reject the review application and recall our orders dated 18.1.2012 and 1.3.2012, and direct the parties to maintain status qua ante prior to the filing of the First Appeal From Order.

22. On the findings recorded by us, we also dismiss the First Appeal From Order. The file shall be consigned to records.

23. The trial Court will take notice of the observations made by us in this judgment and pass orders accordingly. Let a copy of this judgment be sent to the Railway Board, Baroda House, New Delhi for appropriate steps.

Dt. 27.4.2012

RKP/