Punjab-Haryana High Court
(O&M) Chaudhary Modern Agency vs Jallunder Imp. Trust on 19 January, 2024
Author: Anil Kshetarpal
Bench: Anil Kshetarpal
Neutral Citation No:=2024:PHHC:010066
RSA No.468 of 1990 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
RSA No.468 of 1990 (O&M)
Date of Order:19.01.2024
M/s Chaudhary Motor Agency
.Appellant
Versus
The Jullundur Improvement Trust, Jalandhar
..Respondent
CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL
Present: Mr.Akshay Bhan, Sr. Advocate, with
Mr. Santosh Sharma, Advocate
Mr. Harsh Vasu Gupta, Advocate
for the appellant.
Ms. Kavita Arora, Advocate
for Mr. S.C.Pathela, Advocate
for the respondent.
ANIL KSHETARPAL, J
1. After hearing the learned counsel representing the parties on
16.01.2024, the following order was passed:-
"1. This regular second appeal poses a new challenge
before this Court. On the one hand, the appellant claims
that in view of Section 96(3) of the Code of Civil
Procedure, 1908, the first appellate court has wrongly
entertained the appeal although it was not maintainable.
Whereas, on the other hand, it has come to the notice of
the court that the decree passed by the trial Court is
perverse and erroneous. In these circumstances, the
objection with regard to maintainability of the appeal is
overruled particularly when this appeal has remained
pending in this court for the last 34 years. This court
has also given an opportunity to the appellant to argue
the suit itself.
2. The appellant filed a suit for mandatory and
permanent injunction directing the defendant to allot
him a shop-cum-flat no.774. The respondent-trust is
creation of statue i.e. The Punjab Town Improvement
Act, 1922. The appellant claims that he is in a
possession of the shop and the defendant agreed to
receive Rs. 1,25,000/- towards its price. The
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respondent-trust filed a written statement admitting the
stand of the plaintiff. The statement of the learned
counsel representing the trust was also recorded.
Hence, the suit was decreed directing the sale of public
property to the appellant. The trust (respondent herein)
filed the first appeal. It was alleged that the then
Chairman of the Trust colluded with the plaintiff and
filed a written statement admitting his claim. During the
pendency of the appeal, an application under Order XLI
Rule 27 CPC was also filed in order to produce the copy
of the order passed by the Collector ordering the
ejectment of the appellant under the Public Premises
Act.
3. The first appellate court on appreciation of the
material placed on record came to a conclusion that
originally the shop was tried to be sold through public
auction. Sh. Bakshish Singh was declared the highest
bidder, however, he failed to pay the amount.
Subsequently, the appellant took forcible possession and
filed the suit. The allotment of plot in favour of Sh.
Bakshish Singh was cancelled by the Trust.
4. The first appellate court after noticing this fact
came to the conclusion that the then Chairman of the
Trust filed the written statement with a malafide
intention and in connivance with the appellant, thus the
court set aside the judgment and decree passed by the
trial Court.
5. This Bench has heard the learned counsel
representing the parties at length and with their able
assistance perused the paper book.
6. The learned counsel representing the appellant
contends that as per Section 96(3) of the Code of Civil
Procedure, 1908, the first appellate Court has erred in
entertaining and deciding the appeal.
7. On the other hand, the learned counsel
representing the respondent submits that the decree from
the trial court was obtained on the basis of fraud played
by the appellant in collusion with the then Chairman and
therefore, the court shall not interfere in this appeal.
8. This court has considered the submissions of the
learned counsel representing the parties.
9. Undoubtedly, the appeal filed before the first
appellate court was not maintainable as per Section
96(3) of the Code of Civil Procedure, 1908 as the trial
court's decree was a consent decree. However, at this
stage, it will not be appropriate to remit the matter back
to the trial Court for fresh decision particularly when
this appeal has remained pending in this court for 34
years. Hence, this court considers it appropriate to hear
and decide this particular case on merits.
10 The Trust, as already noticed, is a creation of the
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Punjab Town Improvement Act, 1922. As per the
enabling power provided in the Punjab Town
Improvement Act, 1922, the State of Punjab has notified
the Punjab Town Improvement (Utilization of Land and
Allotment of Plots) Rules, 1983 (hereinafter referred to
as 'the 1983 rules'), while laying down the procedure for
disposal of the trust property. In Rule 8 of the 1983
Rules, it has been provided that the commercial property
shall be sold only through a public auction and the said
rule is extracted as under:-
"8. Mode of sale. - [(1) Unless otherwise provided in these rules,
the Trust shall dispose of residential pots, multi-storeyed houses
or commercial plots/other properties in a Scheme in the manner
own in the Table below: -
Serial Category of plot Manner of allotment by
No. or house
auction draw of lots
1. Residential plots Eighty upto twenty percent
up to 100 square percent
yards size
2. Residential plots Fifty upto fifty percent
beyond 100 percent
square yards size
3. Multi-storeyed Fifty upto fifty percent
houses percent
4. Commercial plots Hundred nil:
percent
Provided that in the case of a local displaced person, a
residential plot or a multi-storeyed house, shall be
allotted in the manner as specified in sub-rule (2) of rule
4.]
(2) The land for the institutional purposes shall be
allotted by the Trust on the recommendation of a
Committee consisting of the following for bona fide use
of the institutions :-
(1) The Chairman or the Administrator of the Trust, as
the case may be;
(2) The Deputy Commissioner or his representative in
the case of a Trust at the district headquarters and Sub-
Divisional Officer (Civil) in the case of Trust at Sub-
Division level; and
(3) The Regional Deputy Director, Local Government."
11. Thus, it is evident that the Trust or the
Chairman had no power to transfer the commercial plot
in any other manner except by conducting a public
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auction. Furthermore, it is not the case of the appellant
that any resolution was passed by the Trust agreeing to
transfer the suit property in his favour.
12. At this stage, the learned counsel representing the
respondent submits that the appellant has continued in
possession due to pendency of the appeal and an
application for grant of mesne profit for use and
occupation of the premises during all these years is
required to be awarded in favour of the Trust.
13. The learned counsel representing the appellant
prays for short accommodation.
14. Adjourned to 19.01.2024.
15. To be listed in the urgent list at Sr. No.101."
2. This court has again heard this matter at length.
3. The learned counsel representing the appellant submits that in
the absence of amendment in the written statement filed by the respondent
(defendant before the trial court), the court is bound to decree his suit. He
submits that the defendant (respondent) has filed a written statement
admitting the claim of the plaintiff and therefore, the court has no choice
but to decree the suit.
4. This court has considered the submissions of the learned
counsel representing the parties.
5. Order XII Rule 6 CPC empowers the court to pass a consent
decree if there is no dispute between the parties and the issues are settled,
however, the provision is not mandatory in nature and it does not
necessarily require the court to pass a decree without looking into the evil
design in filing the written statement while conceding to the claim of the
plaintiff. As already noticed, the suit property is a public property. It
belongs to a government instrumentality that is regulated by the provisions
of the Act and the Rules framed thereunder. The public authority managing
the affairs of the public property has no right to squander away public
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property without following the procedure prescribed under the rules. The
court cannot merely sit and spectate the nefarious design with which the
parties have approached the court. The court is obligated to pass a decree
after satisfying that the remedy or relief sought by the parties is not being
used for the purpose which is against the public policy. The facts put
forward in this court reveal that the shoulders of the Court were sought to be
used to take away public property in an illegal manner. In circumstances
like these, the court is not expected to sit like a silent spectator and become
a prey at the hands of the parties that act like predators and help them in
achieving their illegal object and facilitate squandering of public property.
Hence, the argument put forth by the learned counsel representing the
appellant is liable to be rejected.
6. The Apex Court has consistently held that the orders obtained
by fraud and misrepresentation of facts are non-est/nullity in the eyes of
law.
7. Reliance in this regard can be placed on the relevant judgment
passed by the Apex Court in S.P.Chengalvaraya Naidu (Dead) by Lrs. vs.
Jagannath (Dead) by Lrs and others, (1994) 1 SCC 1. The Court in this
particular case relied upon the 'Doctrine of Clean Hands' and held that the
litigants whose cases are based on falsehood have no right to approach the
court and their cases should be summarily rejected on this ground alone.
The relevant paras of the aforesaid judgment are extracted hereunder:-
""Fraud avoids all judicial acts, ecclesiastical or temporal"
observed Chief Justice Edward Coke of England about three
centuries ago. It is the settled proposition of law that a judgment
or decree obtained by playing fraud on the court is a nullity and
non est in the eyes of law. Such a judgment/decree by the first
court or by the highest court has to be treated as a nullity by every
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court, whether superior or inferior. It can be challenged in any
court even in collateral proceedings."
"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. 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."
"A fraud is an act of deliberate deception with the design of
securing something by taking unfair advantage of another. It is a
deception in order to gain by another's loss. It is a cheating
intended to get an advantage ........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 be guilty of playing fraud on the court as well as on the
opposite party."
8. In the realm of legal proceedings, the well settled principle
holds that the litigants whose cases are founded on falsehood forfeit the
right to approach the court, and their claims shall be summarily rejected
based on this ground alone. This concept underscores the importance of
honesty and integrity in legal matters, aiming to maintain the sanctity of the
judicial process. When litigants resort to falsehoods, they compromise the
integrity of the entire legal system. Court rely on truthfulness of the
information presented before them to dispense justice fairly and impartially.
Decisions based on false premises erode public trust in the legal system.
The requirement for truthfulness in legal proceedings is foundational to the
administration of justice. In these cases summarily rejecting the claims
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based on falsehoods deters the litigants to make an attempt to manipulate
the legal system. Ultimately, the rejection of cases built on falsehood or
frauds safeguards the integrity of judicial processes and also upholds the
ethical standards essential for the fair dispensation of justice.
9. At this stage, the learned counsel representing the respondent
has drawn attention of the court to the fact that an application was filed on
04.12.2019, claiming mesne profit for use and occupation of the premises.
It has been stated that in the proceeding under the Punjab Public Premises
and Land (Eviction and Rent Recovery)Act, 1973, the Collector in the year
1988 assessed the mesne profit @ 2000/- per month. However, the
aforesaid order was set aside by the Commissioner in appeal vide order
dated 19.03.1990, and was remanded back to the Collector for passing a
fresh order. A copy of the order passed by the Commissioner Jalandhar
Division, Jalandhar, has been produced. A perusal thereof shows that the
order passed by the Collector was set aside on the ground that the appellant
was not granted proper opportunity. The proceeding is still pending and it's
result is not known.
10. In absence of other material particularly when the assertions
made in the application for grant of mesne profit have not been denied by
the appellant, it is held that the appellant shall be liable to pay tentatively
mesne profit @ 2000/- per month which would increase cumulatively @
Rs.5% per annum till the possession is handed over to the respondents. This
amount shall be recoverable from the appellant in execution of the decree
which shall be prepared by the office. This order shall be subject to
modification, if any, passed by the Collector with regard to the rate of
mesne profit.
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11. The appellant's plea for remand in this regular second appeal is
unfounded, as the suit is wholly based on collusion and fraud. The
appellant along with the former office bearers of the Trust colluded and
defrauded the trial court and obtained a consent decree. The First Appellate
Court appropriately set aside the trial court's decree as it was based on fraud
and collusion. Consequently, the appellant's prayer for remand is denied,
particularly when the plaintiff's whole case is based upon permissible
possession which can under no circumstances entitle him to purchase the
property except in open auction. Consequently, the suit as well as the appeal
are dismissed.
12. All the pending miscellaneous applications, if any, are also
disposed of.
January 19, 2024 (ANIL KSHETARPAL)
nt JUDGE
Whether speaking/reasoned :YES/NO
Whether reportable :YES/NO
Neutral Citation No:=2024:PHHC:010066
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