Mr. Kuldip Gandotra vs Union Of India (Uoi) And Ors.
2006 Latest Caselaw 2205 Del

JUDGMENT

Sanjiv Khanna, J.

Page 3921

1. Fraud and justice never dwell together (fraus et jus nunquam cohabitant) and fraud and deceit defend or excuse no man (fraus et dolus nemini patrocinari debent) are two doctrines which are applied by the Courts to recall earlier orders/judgments.

2. Since fraud strikes at the very root of an Order/judgment and effects solemnity, and the Rule of Law, Courts have exercised their inherent power whenever it is brought to their notice that fraud has been practiced. The above principles have been recently reiterated by the Supreme Court in the case of Hamza Haji v. State of Kerala and Anr. , wherein the entire case law on the subject has been extensively examined and considered. In the said case, it has been held that a second review application in law is not maintainable but a Court can exercise it's power as a court of record to nullify a decision procured by playing a fraud. A decision procured by fraud must be set at naught and no person who is guilty of having come to Court with unclean hands and practicing fraud should be allowed to take advantage and benefit of an order/judgment obtained and tainted by fraud. Power to recall is somewhat different and distinct from power of review. Power of recall is an inherent power, whereas power of review must be specifically conferred on the authorities/Court (Refer Budhiya Swain v. Gopinath Deb reported in (1994) 4 SCC 396 for the distinction between the two and when power to recall can be exercised).

3. The petitioner/non-applicant has succeeded before this Court in the judgment dated 7th October, 2005. The Writ Petition was allowed and it was held that there was no concluded contract as the petitioner's/ non-applicant's proposal for voluntary retirement was withdrawn before acceptance. Accordingly, the petitioner/non-applicant had continued in service of the applicant-respondent. In these circumstances, option was given to the petitioner/non-applicant to refund the amount received under the Voluntary Retirement Scheme to the applicant-respondent with interest and thereafter the applicant-respondent was directed to pay salary, allowances and other retirement benefits to the petitioner/non-applicant with interest calculated Page 3922 on pro-rata basis. It was left open to the respondent-applicant to take action in accordance with law on the question whether the departmental proceedings should be initiated.

4. In the application under consideration, the respondent-applicant has brought on record documents and material to show that the petitioner/non-applicant had taken employment with RITES after the petitioner/non-applicant was relieved and paid under the Voluntary Retirement Scheme. This fact came to the knowledge of the respondent-applicant only when letter dated 19/23rd May, 2006 was received from RITES. In these circumstances, it is stated that the judgment dated 7th October, 2005 should be recalled.

5. In the reply filed by the petitioner/non-applicant, it is admitted that he had worked with RITES after being relieved. It is also admitted that this fact was not informed to this Court. However, it is denied that the petitioner/non-applicant had obtuse motive and was guilty of concealment of facts. It is stated that the Court was not misled and the petitioner/non -applicant had not tried to derive undue, inadmissible monetary benefit by illegal or fraudulent means. It is also stated that at best, principle of mitigation of damages should be applied but the judgment dated 7th October, 2005 should not be recalled. It is also vaguely averred that the respondent-applicant was aware about the employment of the petitioner/non-applicant with RITES as vigilance clearance was obtained before employment with 'no objection certificate' being issued.

6. Some more facts/dates may be noted. The Writ Petition was filed on 21st September, 1993 and was dismissed vide Order dated 20th July, 1994 on the ground that the petitioner/non-applicant had obtained monetary benefits payable under the Voluntary Retirement Scheme. This Order dated 20th July, 1994 was taken in appeal before the Supreme Court. The Supreme Court by its Order dated 31st March, 1999 set aside the Order dated 20th July, 1994 and remitted the matter to this Court for being heard and disposed of on merits. In terms of the directions issued by the Supreme Court, the matter was head and disposed of vide judgment dated 7th October, 2005.

7. From the documents placed on record and admitted before this Court, the petitioner/non-applicant had during the period 16.61995 - 15.12.1998 and thereafter from 8.3.1999 - 8.9.1999 had worked in RITES. It is obvious that the petitioner could not have mentioned these facts in the Writ Petition which was filed on 22nd September, 1993. However, these facts relating to the employment of the petitioner/non-applicant with RITES should have been brought to the notice of this Court when the matter was heard. It is also apparent that the petitioner/non-applicant did not bring these facts to the notice of the Supreme Court when the appeal was disposed of vide Order dated 31st March, 1999. Even after the judgment was passed and specific directions for payment of arrears of salary was made for the entire period w.e.f September 1993, the petitioner/non-applicant did not move any application or inform this Court about the employment. There is no doubt that the petitioner/non-applicant had deliberately and intentionally concealed facts about his employment that were very much in his knowledge. The petitioner/non-applicant was conscious and aware that these facts were material and vital as he was Page 3923 claiming arrears of salary from the date he was relieved till superannuation. It is sheer good fortune of the respondent-applicant that by chance they came to know at the very last moment about the employment of the petitioner/non-applicant with RITES. It is certain that if these facts were brought to the notice of the Court before the judgment dated 7th October, 2005 was passed or even thereafter, the direction to pay the arrears of salary and allowances for the entire period after 23rd September, 1993 till superannuation would have been modified and the pay and allowances payable for the period from 16.6.1995 - 15.12.1998 and from 8.3.1999 - 8.9.1999 when the petitioner/non-applicant had remained employed with RITES, would have been excluded or proportionately the pay and allowances payable for this period would have been reduced by applying the principle of mitigation. It is not a mere case of negligence on the part of the petitioner/non-applicant or ignorance with lack of knowledge. The petitioner/non-applicant was fully conscious of the relief he had prayed for and claimed and the order that the Court was likely to pass if he succeeds. There was nothing that prevented the petitioner/non-applicant from informing true and correct facts before this Court at the time of arguments or even thereafter by filing an affidavit when the judgment was reserved for pronouncement or after the judgment dated 7th October, 2005 was passed. It was pre-meditated and intentional contrivance to keep the Court and the respondent-applicant in ignorance of the real facts to procure judgment/order for payment of arrears for the entire period.

8. We are conscious of the fact that there is difference between a mere mistake and even negligence which by itself is not fraud but merely evidence of fraud. However, the present case is one in which the petitioner/non-applicant made a false representation deliberately and intentionally concealing facts to mislead the Court. In the present facts, the motive to mislead and the intention to do so is writ large. Fraud is proved when it is shown that false representation was intentionally and recklessly made without caring to know whether it is true or false. In the present matter, vital and relevant material facts were concealed. The Petitioner/non-applicant was fully aware that true facts were not brought to the notice of the Court. Thus actual fraud has been established and it is not a case of mere constructive fraud.

9. Failure to point out the factum of employment cannot be regarded as a mere secondary fact that was immaterial or irrelevant for granting relief. The facts concealed were not collateral or extraneous. In Story's Equity Jurisprudence, 14th Edition, Vol.1, as quoted in Hamza Haji (supra) it has been observed:

Fraud indeed, in the sense of a Court of Equity, properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.

10. Thus omission and concealment which involves breach of legal or equitable duty and confidence justly reposed, is equal to fraud. Similarly, Page 3924 the Supreme Court in Bharau Dadu v. State of Maharashtra has held that suppression of a material document would amount to fraud on a Court. In another case S.P. Chengalvaraya Naidu (decd) thr. LRs v. Jagannath and Ors. , the Supreme Court was critical and did not agree with the High Court that there is no legal duty cast upon a party to come to the Court with a true case and prove it by true evidence. It was held that fraud is an act of deliberate deception with a design to secure something by taking unfair advantage. Deception to gain by another's loss is fraud. Failure to disclose relevant and material facts and non-mentioning of even a document can tantamount to playing a fraud on the Court, if it is done with the intention to gain advantage with a view to procure an order or an advantage from the Court without disclosing all facts. Obtaining relief by deliberately suppressing facts, which were fundamental to entitlement of relief and foundation of the claim amounts to practicing fraud.

11. The only question which now survives is whether we entirely recall our order/judgment dated 7th October, 2005 or suitably modified it in view of the admitted position that the petitioner/non-applicant had worked during the period 16.6.1995 - 15.12.1998 and from 8.3.1999 - 8.9.1999. To follow the second option will be to put the petitioner/non-applicant in the same position in which he would have been if the true facts were informed to this Court before the Judgment dated 7th October, 2005 was passed. This would not meet the ends of justice. By doing so, the petitioner/non-applicant would be let off lightly and will send a wrong signal to litigants that they can conceal material and true facts and then get away with relief even after the fraud is revealed. This will result in miscarriage of justice. Much harsher and stricter order is required in such matters. Confidence of the court is betrayed. A writ court is a court of equity and exercise of jurisdiction is discretionary. Parties must approach the Court with clean hands by disclosing true and relevant facts. A party concealing facts to obtain relief, which he does not deserve cannot be let off. Accordingly, we feel that this is a fit case in which while recalling our Order dated 7th October, 2005, we should entirely withdraw the relief which otherwise the petitioner/non-applicant would be entitled to, inspite of the fact that he had worked during the period 16.6.1995 - 15.12.1998 and 8.3.1999 - 8.9.1999. The first option is the only option that we, with some dolour and anguish, adopt.

12. In Rajabhai Abdul Rehman Munshi v. Vasudev Dhanjibhai Mody reported in (1964) 3 SCR 481 it has been observed (at p. 488):

Exercise of the jurisdiction of the Court under Article 136 of the Constitution is discretionary: it is exercised sparingly and in exceptional cases, when a substantial question of law falls to be determined or where it appears to the Court that interference by this Court is necessary to remedy serious injustice. A party who approaches this Court invoking the exercise of this overriding discretion of the Court must come with clean hands. If there appears on his part any attempt to overreach or Page 3925 mislead the Court by false or untrue statements or by withholding true information which would have a bearing on the question of exercise of the discretion, the Court would be justified in refusing to exercise the discretion or if the discretion has been exercised in revoking the leave to appeal granted even at the time of hearing of the appeal.

The observations made above, equally apply when a party files a writ petition but conceals true, correct and relevant facts.

13. Supreme Court in case of Vijay Syal v. State of Punjab has held as under:

24. In order to sustain and maintain the sanctity and solemnity of the proceedings in law courts it is necessary that parties should not make false or knowingly, inaccurate statements or misrepresentation and/or should not conceal material facts with a design to gain some advantage or benefit at the hands of the court, when a court is considered as a place where truth and justice are the solemn pursuits. If any party attempts to pollute such a place by adopting recourse to make misrepresentation and is concealing material facts it does so at its risk and cost. Such party must be ready to take the consequences that follow on account of its own making. At times lenient or liberal or generous treatment by courts in dealing with such matters is either mistaken or lightly taken instead of learning a proper lesson. Hence there is a compelling need to take a serious view in such matters to ensure expected purity and grace in the administration of justice.

14. We may mention here that we have exercised our power and inherent right with a Court to recall an order and not merely exercised right to review an order/judgment under Order XLVII of the Code of Civil Procedure, 1908. Order XLVII of the Code of Civil Procedure, 1908 applies when new and important evidence/facts come to the knowledge/notice of one of the parties, which were not known earlier. There is nothing on record to show that any clearance was obtained by RITES from the applicant-respondent. Police verification does not imply knowledge of employment to the past employer. No document or material is on record to establish that the applicant-respondent was aware and/or had knowledge of the employment of the petitioner-non applicant. It has not been alleged that the respondent applicant was not diligent. Thus requirements of Order XLVII of the Code of Civil Procedure, 1908 are satisfied in the present case. Therefore, we could have also exercised our power to review under the aforesaid provision. Mere dismissal of an SLP before it is admitted/granted, does not bar a High Court from entertaining a review application.(Refer Kunhayammed v. State of Kerala and National Housing Cooperative Society Limited v. State of Rajasthan reported in (2005) 12 SCC 149). Therefore, we do not find any merit in the contention raised by the petitioner/non-applicant that the respondent-applicant had Page 3926 filed a SLP against the judgment dated 7th October, 2005 and the same was dismissed. Admittedly, the SLP was dismissed in January, 2006 and the fact that the petitioner/non-applicant had taken employment in RITES came to the knowledge of the respondent-applicant only in May, 2006.

15. In the facts and circumstances of the case, we allow the application and recall our order/judgment dated 7th October, 2005. Writ Petition filed by the petitioner/non-applicant will be treated as dismissed. The cheques given by the petitioner/non-applicant will be returned by the respondent-applicant and will not be encashed. In view of the Order passed above, we are not passing a specific order imposing costs on the petitioner/non-applicant though the facts require imposition of exemplary costs.

CM No. 7456 OF 2006 IN WP(C) No. 4458 OF 1993

In view of the order passed above, the application has become infructuous and is accordingly dismissed.