Supreme Court of India
BEHARI KUNJ SAHKARI AVAS SAMITIversusSTATE OF U.P. & ORS.
- Citation
- 2008 INSC 868
- Decided
- 25 July 2008
- Disposal
- Dismissed
- Bench
- ARIJIT PASAYAT
Holding
The Supreme Court held that the 1982 transfer was void for lack of prior approval of the Custodian General and for being a fraudulent, mala fide exercise of power, and therefore affirmed the High Court’s cancellation.
Summary
The dispute concerned a four‑bigha property in Agra that became evacuee property after the owner migrated to Pakistan and vested in the Custodian of Evacuee Property. The land was auctioned in 1955 under the Displaced Persons (Compensation and Rehabilitation) Act, 1955 and allotted to a displaced person, Tuljaram. Subsequent claims by the tenant Harnath Chaturvedi led to a series of appeals, revisions and representations, culminating in a 1982 order by the Assistant Custodian and the Custodian General transferring a portion of the property (the kothi) to Guiab Chand Mittal, who later sold it to Bihari Kunj Sahkari Awas Samiti, the appellant. The State of Uttar Pradesh challenged the 1982 transfer, arguing that the Custodian General’s prior approval was a prerequisite and that the transfer was made without a tender process, amounting to fraud. The Supreme Court examined whether the post‑facto approval violated Sections 8 and 10 of the Displaced Persons Act, whether the procedural requirements were complied with, and whether the High Court’s cancellation of the transfer was justified. It held that the transfer was invalid for lack of prior approval and for being mala fide, affirmed the High Court’s decision, and dismissed the appeal.
Issues considered
- The transfer of evacuee property by the Assistant Custodian and Custodian General without prior approval under Section 10(1) of the Displaced Persons (Compensation and Rehabilitation) Act, 1955 is valid or void.
- Whether the failure to conduct a tender process violates the statutory requirement for best price under the Act.
- Whether the 1982 order constitutes fraud and therefore vitiates the transfer.
- Whether the High Court had jurisdiction to cancel the 1982 transfer and whether the appellant, a local person, can claim title to the property.
Legislation cited
Subjects
evacuee propertydisplaced persons actcustodian authorityprior approvaltender processfraudmala fide transferres judicatajurisdictionproperty rights
Judgment
[2008] 11 S.C.R. 337
~
BEHARI KUNJ SAHKARI AVAS SAMITI A
v.
STATE OF U.P. & ORS.
(Civil Appeal No. 1795 of 2000)
JULY 25, 2008
B
~_,j [DR. ARIJIT PASAYAT AND LOKESHWAR SINGH
PANTA, JJ.]
Displaced Persons (Compensation and Rehabilitation)
Act, 1955; Ss. 2(c), 8 and 10(1) & (2)/Displaced Persons (Com- c
~ pensation and Rehabilitation) Rules, 1955; r. 92:
Evacuee property - Transfer of - Held: Evacuee prop-
erty vested in Custodian - Before effecting transfer of such
property, prior approval of Custodian-General necessary- Ex-
post facto approval of the authority not sufficient - Due pro- D
cess to ensure best price of the property by inviting tender not
,.
~ followed - All previous orders passed by the authority/courts
t
having relevance on the issue have been suppressed - Ap-
pellant-transferee is a local person and not a displaced per-
son, therefore, he has no right to get the property transferred E
in his favour as rightly held by the High Court- Evacuee Prop-
erty Act.
Words and Phrases:
'Fraud' - Practicing of in the context of Transfer of F
Evacuee Property
• The property in question originally belonging to one
'A' and on his migration to Pakistan vested in the Custo-
dian under the Administration of Evacuee Property Act.
The entire property was given in tenancy to 'H' and 'G' by G
the Custodian. Later, 'G' has transferred his portion to one
'M'. On his death, the entire property of four bighas one
-l "" biswa, on which there was a kothi, garden and appurte-
nant land, was auctioned under the provisions of Dis-
337 H
338 SUPREME COURT REPORTS [2008] 11 S.C.R.
--1
A placed Persons (Compensation & Rehabilitation) Act 1955
and it was given to a displaced person, one 'T' and sale
certificate thereof was issued in his favour. Against the (=
auction, 'H' made an application under r.92 of the Dis- ~~
placed Persons (Compensation & Rehabilitation) Rules,
B 1955 before the authority claiming himself to be a tenant
in respect of part of the land in question claiming it to be .~~
an agricultural land originally belonging to 'A', the
Zamindar and later the custodian; and that only Zamindari
'·
rights had vested in the Custodian and f?nly the kothi was
c auctioned and not the agricultural land. The application
was rejected by the authority. In th~ meantime, the Gov- ;:c
ernment of India acquired the property. 'H' filed an appeal
before Asstt. Settlement Commissioner, which was re-
jected by the authority by its order dated 17.10.1960. 'H'
filed a revision application under Section 24 of the Act
D I--
before Chief Settlement Commissioner, which was re-
jected by the Revisional Authority. Representations filed >- '?.-
,
thereagainst by 'H' was rejected by ·the Central Govern-
ment. Writ petition filed by 'H' was dismissed by the High
Court. Appeal filed thereagainst by 'H' was dismissed by
E the High Court. In the meantime, the State of Uttar Pradesh
made a representation before the Central Government
under Section 54 of the Act against the order of the Cus- f'
todian dt. 27.4.72 by which Zamindari rights over two
big has ten biswas land were transferred to 'H'. Notices \
F were issued to 'H' and the other persons. Being aggrieved
with the notice, heirs of 'H' and others filed a Writ Petition.
On 10.11.1982, 'H' made an application before the Custo-
.. ,/
dian, Evacuee Property praying therein for transfer of the
land in question in his favour and for execution of sale
G deed in favour of one 'G' with whom he had made an
agreement to sell the said property on certain consider-
ation. The Custodian accepted the prayer, which in turn ~-
-4"1
was also approved by the Chief Custodian General and
the property was transferred to 'G'. Aggrieved by the trans- ~
H fer of the property, State of Uttar Pradesh filed a revision
BEHAR! KUNJ SAHKARI AVAS SAMIT! v. STATE OF 339
U.P. & ORS.
~
application under Section 27 of the Act, which was re- A
jected by the Revisional Authority. In the meantime, 'G'
transferred part of the property in question to the present
appellant. Challenging the same, the State of Uttar
Pradesh filed writ petitions, which were allowed by the
High Court. Hence the present appeal. B
~-~
Appellant contended that the applications were made
under Sections 27 and 54 of the Displaced Persons (Com-
pensation and Rehabilitation) Act in respect of sale of
property owned by 'H'; that the sale was approved by the
Assistant Custodian; and that in the earlier Special Leave c
Petition this Court had directed to consider the validity of
order dated 11.11.1982 passed by the Assistant Custo-
dian and the consequential order dated 16.11.1982 passed
by the Custodian General; and that under the circum-
stances, the High Court was not justified in saying that 0
there was no jurisdiction to deal with the matter.
State submitted that there was no challenge to the
auction and the Sale Certificate in respect of the disputed
property till 18.11.1961 and in the writ petition, there was
no challenge to the aforesaid auction and sale certificate E
and the relief claimed related to eviction. Later, the writ
petition was dismissed on 6.9.1962; that in the Letters
Patent Appeal there was no challenge to the auction and
the sale certificate and the Letters Patent Appeal was dis-
missed on 27.11.1971; that the directions for remand was F
"))
given because the concerned parties were not heard. On
remand, fresh proceedings were initiated and the claim
as tenant was accepted in respect of the land in ques-
(
tion; that as a matter of fact there was no claim to the
;#
Kothi; and that the stand that only the Kothi and not the G
entire land was auctioned does not appear to be factu-
ally correct.
Dismissing the appeal, the Court
HELD:1.1 There was some suppression of factual H .
.-1...
340 SUPREME COURT REPORTS [2008] 11 S.C.R.
-1.
A position and fraud appears to have been practiced. After
nine years, the application was moved in 1982. It is not in
dispute that no opportunity was granted to 'T' before
passing of the order on 11.11.1982 by the Assistant Cus-
todian. The certificate of sale shows that one 'G' pur-
B chased the property at a sale by negotiation. Under Sec-
tion 8 of the Displaced Persons (Compensation & Reha- ~~
bilitation) Act, the property vests in the Custodian of the
particular State. The 'Custodian' is defined in Section 2(c)
and Section 10(1) of the Act provides that the job of .the
c Custodian is to preserve and maintain the property. The
primary object is not to transfer. In case property cannot
be preserved then only it can be transferred. Under sub-
section (2) only for the purpose enumerated in sub sec-
tion (1) there can be transfer or sale, and no such action
can be taken without prior or previous approval of the
D
Custodian General. The approval of the Custodian Gen-
eral is to be taken first. This is clear from the expression ~ •
"Previous Approval", before the order is passed. Post
facto approval is not sufficient. This procedure was not
followed. Tender process was not adopted which would
E have ensured that the best price was available. (Para -
12) [348-G, 349-A,B,C]
State of A. P and Anr. v. T Suryachandra Rao (2005) 6
sec 149 - relied on.
F 1.2 Stand of the appellant in essence is that after dis-
missal of the writ petition and three earlier orc':Ns, revi- k
sion under Section 27 of the Act was maintain~.b$.e. Stand \
of the State is that there was no jurisdiction to move any
particular authority. A new case was tried to be made,
G which was not the case earlier. An appeal was already
filed without indicating as to under which provision it was
filed. Second appeal against eviction was not maintain-
~.·
able. There was constructive res judicata, and there is no
provision to move after 9 years for transfer of the kothi. It
H is significant that all previous orders which have rel··
BEHAR! KUNJ SAHKARI AVAS SAMIT! v. STATE OF 341
U.P. & ORS.
evance were suppressed. There is substance in what is A
submitted. (Para - 14) [353-E,F]
1.3 The suit was filed against 'T'. Subsequently there
was a compromise between 'T' and 'B'. It is relevant to
note that claim of 'B' was that there was an agreement of
sale between 'T' and himself; that in the counter affidavit B
filed by 'T' there is no reference to the alleged agreement
with 'B'. He is a local person and not a displaced person.
Therefore, he has no right to get the property. There is no
distinction between original order and the revisional or-
der. Law is fairly well settled that even if an order is a nullity C
same has to be challenged. (Para - 15) [353-G, 354-A, B]
State of Punjab and Ors. vs. Gurdev Singh (1991) 4 SCC
1 - relied on.
2. The High Court was justified in its view and no D
interference is called for. (Para - 16)
Case Law Reference
(2005) 6 SCC 149 Relied on Para - 13
(1991) 4 sec 1 Relied on Para - 15 E
CIVILAPPELLATE JURISDICTION : Civil Appeal No. 1795
of 2000
From the final Judgment and Order dated 23.4.1998 of
the High Court of Judicature at Allahabad in C.M.W.P. No. 16775 F
:~ot 1985
K. Parasaran, A.S.G., Dr. R.G. Padia, Raj iv Dutta, Pradeep
Ranjan Tiwary, Puneet Jain, H.D. Thanvi, Christi Jain, Sarad
Singhania, Sushi! Kumar Jain, Reena Singh, Kamlendra Mishra, G
Shashi Kiran, Jyoti Saxena, Vipin K. Saxena, C.K. Sucharita,
Arvind Varma, Malika Trivedi, T. Mahipal and B.K. Satija for the
appearing Parties.
The Judgment of the Court was delivered by
H
342 SUPREME COURT REPORTS [2008] 11 S.C.R.
A Dr. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to
the order passed by Division Bench of the Allahabad High Court
dismissing several writ petitions. Three writ petitions were filed
by the State of Uttar Pradesh through Secretary, Revenue De-
partment, Smt. Lalita Chaturvedi and Ors. and by G.C. Mittal.
B These writ petitions were numbered as Civil Misc. Writ Petition
Nos.16775 of 1985, 9162 of 1987 and 9386 of 1987 respec-
tively.
2. In these three civil writ petitions, the disputed subject
matter is Khasra No. 519, village Surjepur, Agra whose total
C area is four bighas one biswa which is recorded as property of
Abdul Wahid in revenue record. At the time of division of the
country, Abdul Wahid had migrated to Pakistan in 1947-48 and
his aforesaid property, (Khasra No. 519, village Surjepur, total
area four bighas one biswa) was declared as evacuee prop-
D erty and under Administration of Evacuee Property Ordinance,
1949 (Ordinance No. 1 1949) it vested in the Custodian of
Evacuee Properties. Later on the said ordinance was substi-
tuted by Administration of Evacuee Property Act, 1950 (in short
the 'Act') and then this property was deemed to have vested in
E the Custodian as an Evacuee Property under the said Act. The
entire property was given in the tenancy of Harnath Chaturvedi
and Gurudatt Chaturvedi by order of Addi. Asstt. Custodian in
1949 for which rent was payable at the rate of Rs.50/- per month
by Harnath Chaturvedi with effect from 1. 7.1949 and from the
F same date at the rate of Rs.25/- per month was payable by
Gurudatt Chaturvedi. The portion which was given in the ten-
ancy of Gurudatt Chaturvedi was later on given to Addi. Asstt.
Custodian Shri Mehrotra by Asstt. Custodian, Evacuee Prop-
erty, Agra on 22.9.1953. Shri Mehrotra died. On 18.8.55, this
G entire property of four bighas one biswa, on which there was a
kothi, garden and appurtenant land, was auctioned under the
provisions of Displaced Persons (Compensation & Rehabili-
tation) Act 1955 (in short the 'Displaced Persons Act') and it
was given to the displaced person Tuljaram on the highest bid
H of Rs.61,000/-. Tuljaram made payment of that money by ad-
BEHARI KUNJ SAHKARI AVAS SAMITI v. STATE OF 343
U.P. & ORS. [DR ARIJIT PASAYAT, J.]
*'· justment of compensation. Accordingly, sale certificate of this A
property was made in favour of Tuljaram. Against this auction,
Harnath Chaturvedi made an application under Ru.le 92 of the
Displaced Persons (Compensation & Rehabilitation) Rules,
1955 (in short 'Displaced Persons Rules') before the Manag-
ing Officer, Agra in which he made a claim claiming himself to B
~ be a tenant in respect of a part of land of the entire area of four
bighas one biswa which, apart from kothi, was land. The con-
tention of Harnath Chaturvedi was that it was an agricultural land
upon which he has acquired rights of hereditary tenancy and
used to pay rent to the Zamindar and after this property was c
vested in the Custodian, the rent was being paid to the Gusto-
dian. Further Harnath Chaturvedi contended that Abdul Wahid
was only a Zamindar of this property and only Zamindari rights
had vested in the Custodian and only the kothi was auctioned
and not the agricultural land because he continues to be in
D
peaceful possession over the agriculture land. Managing Of-
ficer rejected this application by his order dated 27.5.1955. By
Government letter dated 4.6.1955 of Government of India, all
urban immovable properties within corporation, municipality and
notified committee areas, within the State of U. P., were acquired
on 15.8.1947 and it was declared that whatever urban immov- E
able property has been declared as "Evacuee Property", it all
shall vest in the Central Government. As the disputed subject
matter came within the area of Agra municipality, that is why it
all vested in the Central Government. Harnath Chaturvedi filed
an appeal before Asstt. Settlement Commissioner, U. P. against F
:.; the order rejecting of his application dt. 27.5.1955 by Manag-
ing Officer, Agra. This appeal was rejected by Asstt. Settlement
Commissioner by order dated 17.10.1960. Against this rejec-
tion order dated 17.10.1960, Harnath Chaturvedi filed a revi.i
sion application under Section 24 of the Act before Chief Settle- G
ment Commissioner. The Deputy Chief Settlement Commis-
sioner, New Delhi, exercising the delegated power of Chief
~
Settlement Commissioner rejected the revision application by
his order dated 18.11.1961. Harnath Chaturvedi under Section
33 of the said Act, made a representation to the Central Gov- H
344 SUPREME COURT REPORTS [2008] 11 S.C.R.
-'t
A ernment against the said rejection order of Deputy Chief Settle-
ment Commissioner, which too was rejected by the Central Gov- I-
ernment. Harnath Chaturvedi filed a Writ Petition No. 251/62
before the High Court against the rejection of his representa-
tion by Managing Officer and against the rejection of his ap-
B peal and revision application. The High Court dismissed this
Civil Writ Petition on 6.9.62. Against the rejection of Civil Writ ~
Petition by the High Court, Harnath Chaturvedi filed a Special
Appeal No.1002 year 1962 in the High Court. This Special Ap-
peal was dismissed by the High Court by order dt. 24.11.1974.
c During the period of pendency of application under Section 27
of the Act before the Asstt. Custodian General and in the revi-
sion application he made a claim on the basis of being a tenant
and prayed for the review of the order of vesting as Evacuee
Property. In the revision application, Harnath Chaturvedi claimed
himself as a tenant only over land measuring two-bighas ten
D
biswas out of total land of four bighas one biswa and alleged
Abdul Wahid to be his Zamindar. Asstt. Custodian, General Uttar
Pradesh and Bihar. Lucknow disposed off the said revision ap-
plication by his order dt. 30.10.1969/ 5.11.1969 and remanded
the matter to the Asstt. Custodian for disposal of the claim of
E Harnath Chaturvedi after hearing him. TheAsstt. Custodian, by
his order dt. 25.2.72 accepted the claim of the tenancy of Har-
nath Chaturvedi over two big has ten biswas and the tenancy of
Harnath Chaturvedi was accepted over land two bighas ten
biswas deeming it to be a separate part out of the total land of ,_
F four bighas one biswa. After this order, Harnath Chaturvedi
prayed for transfer of Zamindari rights in his favour over this I,:-
two bighas ten biswas area to the Asstt. Custodian and, which
prayer was accepted and after accepting rupees eight hundred,
Zamindari rights were also transferred to Harnath Chat.urvedi
G on 27.4.1972.
3. Harnath Chaturvedi preferred an appeal on 22.1.1973
before Chief Custodian General under Section 22 of the Act in ~ ~
which he prayed that the auction dt. 18.8.1955 in favour of
Tuljaram and the sale certificate issued on 14.7.1961 in respect
H ,I_
BEHARI KUNJ SAHKARI AVAS SAMITI v. STATE OF 345
U.P. & ORS. [DR. ARIJIT PASAYAT, J.]
' ~
'
of the disputed subject matter, be cancelled. This appeal was A
~
accepted by Authorised Settlement Commissioner, Lucknow
I
and the auction and sale certificate in favour of Tuljaram were
I cancelled. Tuljaram made an application before the Settlement
~
Commissioner, Government of India, New Delhi on 30.6. 76
against this order dt. 11.1.1973 which was rejected on B
. ~
20.1.1977. Against this rejection order dt. 20.1.1977, Tuljaram
filed a revision application under Section 24 of the Act before
the Deputy Chief Settlement Commissioner, New Delhi on
8.2.1977. This revision application was rejected by Deputy
Custodian General Evacuee Property by his order dt. c
17.5.1976. Against this rejection order dt. 17.5.1976 Tuljaram
filed a Civil Writ Petition No. 920 of 1977 in the Delhi High Court
which on the prayer of Tuijaram, was rejected on 4.1.1983.
Tuljaram prayed for recalling this rejection order, which prayer
too was rejected by the Delhi High Court by its order dt.
D
.i 22.2.1984 .
4. The State of Uttar Pradesh made a representation be-
fore the Central Government under Section 54 of the Act against
the order of the Custodian dt. 27.4. 72 by which Zamindari rights
over two bighas ten biswas were sold to Harnath Chaturvedi E
for rupees eight hundred and against the order dt. 17.5.1976 of
the Deputy Custodian General by which the revision applica-
tion ofTuljaram was rejected. Upon this representation, notices
were issued to Harnath Chaturvedi and the other persons who
were brought on the land by him. Being aggrieved with the said F
notice, heirs of Harnath Chaturvedi and the persons who were
brought by him, filed Writ Petition No. 9162/1987 (Lalita
Chaturvedi and others V/s The Union Of India and another) and
Writ Petition No.9386 of 1987 (Guiab Chand Mittal V/s Union
Of India and others).
G
5. On 10.11.1982, Harnath Chaturvedi made an applica-
'>f
tion before the Custodian Evacuee Property, Uttar Pradesh in
respect of property No. 183/195, which is the part comprising
of kothi and garden of the total disputed subject matter and
which is situated over one bigha eleven biswas and is known H
346 SUPREME COURT REPORTS [2008] 11 S.C.R.
A as Bagh Farzana, praying therein that the said land be trans-
-;: ,,_
ferred to him and also prayed that the sale deed of this land be
executed in favour of Guiab Chand Mittal with whom Harnath I
Chaturvedi had made an agreement to sell for an amount of
rupees twenty lacs. On 11.11.82, Authorised Custodian ac-
8 cepted the prayer of Harnath Chaturvedi and proposed the trans-
fer to Harnath Chaturvedi for rupees sixty one thousand i.e. the A--··
amount for auction was accepted in favour of Tuljaram on
18.8.1955. Asstt. Custodian General, duly authorized by Chief
Custodian General, approved the said proposal on the same
c day on 11.11.1982 and for an amount of rupees sixty one thou-
sand, land measuring one bigha eleven biswas alongwith kothi
-::
and garden, was transferred to Guiab Chand Mittal. Thereafter,
Tuljaram made a prayer before the Custodian General under
Section 27 of the Act. On 31.1.1985 State of Uttar Pradesh filed
a revision application under Section 27 of the Act. On
D
11.10.1985 the said revision application was rejected. During
this period on 8.3.1984, Guiab Chand Mittal transferred kothi ~ ~
and appurtenant land i.e. one bigha eleveri biswas to Bihari
Kunj Sahkari Awas Samiti, the present appellant for an amount •
of rupees twenty lacs.
E l
)
6. The High Court noted inter alia as follows :
'
"Since in these writ petitions, order dt. 5.11.1969, dated
25.2.1972 and dated 3.1.1973 have not been challenged
and the Hon'ble Supreme Court in its order has not desired
F that the legality and propriety of these orders be
considered, therefore this court does notthink it proper to
consider the questions that have been raised by the
learned advocate Shri Saraswat and express its opinion
thereon. Thus for this reason, no analysis is being made
G on the judgments produced in the support by Shri
Saraswat."
7. The High Court held that orders dated 11.11.1982 and )': ~
18.11.1982 appear to be mala fide, against law, arbitrary and
invalid and were liable to be cancelled. Therefore, the writ peti-
H
BEHAR! KUNJ SAHKARI AVAS SAMITI v. STATE OF 347
U.P. & ORS. [DR. ARIJIT PASAYAT, J.]
tions (Civil Misc. Writ Petition No.16775 of 1985) filed by the A
State of Uttar Pradesh was allowed and the order dated
11.11.1982 and the sale certificate dated 18.11.1982 in com-
pliance thereof were directed to be cancelled. In the Writ Peti-
tion Nos. 9162 of 1987 and 9386 of 1987, the order passed in
the year 1969 by the Central Government in regard to two bighas B
and ten biswas out of the disputed subject matter of four big has
and one biswa and thereafter order passed in appeal and revi-
sion of Harnath Chaturvedi in the years 1972 and 1973 and
subsequent orders that have been passed on their basis were
the subject matter of dispute. c
8: State of Uttar Pradesh had questioned its bonafides
and had requested Central Government to conduct an enquiry
in terms of Section 54 of the Act upon which the Deputy Secre-
tary, Department of Evacuee Properties of Home Ministry of
the Central Government had on 21.2.1986 expressed his views D
for making an enquiry. According to High Court, against the ex-
pression of view for an inquiry, there was no justifiable reason
for issuing any direction, order or writ. Therefore, the writ peti-
tions nos. 9162 and 9386 of 1987 were held to be without merit
and were dismissed. E
9. Learned counsel for the appellant submitted that there
could be no vesting unless interest is separated because of the
provisions of the Separation Act. The app!ications were made
under Section 27 of the Act and Section 54 of the Disabled
Persons Act. Section 27 applications were in respect of sale of F
Harnath's property. It is to be noted it was contended that the
sale was approved by the Assistant Custodian. In the earlier
Special Leave Petition this Court had directed to consider the
validity of order dated 11.11.1982 and the consequential order
dated 16.11.1982. The High Court stated that there is no indi- G
cation as to under what provisions of law the order was passed.
There was no challenge to the order under Section 22 dated
31.1.1993 and the order in the writ petition noted this position.
Therefore it is submitted that the High Court was not justified in
saying that there was no jurisdiction to deal with the matter. H
348 SUPREME COURT REPORTS [2008] 11 S.C.R.
~
A 10. At.this juncture, it is to be noted that there was no dis-
pute that the Custodian had no authority under the Disabled
Persons Act. High Court's view related to the effect of cancella-
tion of the auction and the fact that the property vests in the
State of Uttar Pradesh. R~ference is also made to the letter by
B the Central Government to the State of Uttar Pradesh.
k_,
11. Learned counsel for the State of Uttar Pradesh on the
other hand submitted that the entire case of the appellant is
based on the order dated 31.1.1973. This Court had held that
the order dated 11.11.1982 was not the consequential order
c but was th~ original order. Although the case is that the claim-
ant is. in posses$ion of portion of the kothi No. 183/195, Civil
Lin~s. Agra, the auction certificate was in favour of Tuljaram.
The revision was filed by Harnath Chaturvedi under Section 22.
Another ~evi~ion.under Section 22 was filed subsequently. The I
D claim was regarding Zamindariland Bhumidari rights in respect I
of property in the heart of the city. There was no challenge to the ,.,_ i
auction of 1955 and the Sale Certificate till 18.11.1961. In the "
writ petition, there was no challenge to the aforesaid auction
and sale certificate and the relief claimed related to eviction.
E The writ petition filed was dismissed on 6.9.1962. In the Letters
Patent Appeal also there was no challenge to the auction and
the sale certificate and the Letters Patent Appeal was dismissed
on 27.11.1971. The directions for remand was given because
the concerned parties were not heard. On remand, fresh pro-
F ceedings were initiated and the claim as tenant was accepted
in respect of 2.11 bighas of land: As a matter of fact there was
no claim to the Kathi. The stand is that only the Kothi and not the
entire land was auctioned. This does not appear to be factually
correct.
G 12. There was some suppression of factual position and
fraud appears to have been practiced. After nine years, the ap-
plication was moved in 1982. It is not in dispute that no oppor- .
~
tunity was granted to Tuljaram on 10.11.1982 and before pass-
ing of the order on 11.11.1982. The certificate cf sale shows.
H that G.C. Mittal purchased t11e property at a sale by negotiation.
BEHARI KUNJ SAHKARI AVAS SAMITI v. STATE OF 349
:(-
U.P. & ORS. [DR ARIJIT PASAYAT, J.]
Under Section 8, the property vests in the Custodian of the par- A
ticular State. The 'Custodian' is defined in Section 2(c) and
Section 10( 1) provides that the job of the Custodian is to pre-
serve and maintain the property. The primary object is not to
transfer. In case property cannot be preserved then only it can
...__.._ be transferred. Under sub-section (2) only for the purpose enu- B
merated in sub section (1) there can be transfer or sale, and no
such action can be taken without prior or previous approval of
the Custodian General. The approval of the Custodian General
is to be taken first. This is clear from the expression "Previous
Approval", before the order is passed. Post facto approval is c
not sufficient. This procedure was not followed. Tender process
was not adopted which would have ensured that the best price
was available. If the order dated 30.1.1985 is a nullity further
action is of no consequence.
13. In State of A.P and Anr. v. T Suryachandra Rao D
•·" -i [2005(6) sec 149] it was observed as follows:
By "fraud" is meant an intention to deceive; whether it is
from any expectation of advantage to the party himself or
(
from the ill will towards the other is immaterial. The
expression "fraud" involves two elements, deceit and injury E
to the person deceived. Injury is something other than
economic loss, that is, deprivation of property, whether
movable or immovable or of money and it will include and
any harm whatever caused to any person in body, mind,
reputation or such others. In short, it is a non~economic or F
~
non-pecuniary loss. A benefit or advantage to the deceiver,
will almost always call loss or detriment to the deceived.
Even in those rare cases where there is a benefit or
advantage to the deceiver, but no corresponding loss to
the deceived, the second condition is satisfied. (See Dr. G
Vim/a v. Delhi Administration (1963 Supp. 2 SCR 585)
";' and Indian Bank v. Satyam Febres (India) Pvt. Ltd. (1996
(5) sec 550).
A "fraud" is an act of detiberate deception with the design
H
350 SUPREME COURT REPORTS [2008] 11 S.C.R.
~
A of securing something by taking unfair advantage of another.
It is a deception in. order to gain ~Y another's loss. It is a
cheating intended to get an advantage. (S~e S. P
Chengalvaraya Naidu v. Jagannath (1994 (1) SCC 1).
"Fraud" as is well known vitiates every solemn act. Fraud
B and justice never dwell together. Fraud' is a conduct either ~
by letter or words, which includes the other person or
authority to take a definite determinative stand as a
response to the conduct of the former either by words or.
letter. It is also well settled that misrepresentation itself
c amo·unts to fraud. Indeed, innocent misrepresentation may
also give reason to claim relief against fraud. A fraudulent
misrepresentation is called deceit and consists in .leading
a man into damage by willfully or recklessly causing him
to believe and act on falsehood. It is a fraud in law if a
D party makes representations, which he knows to be false,
and injury enures therefrom although the motive from which
.,_
t--
the representations proceeded may not have been bad.
·An act of fraud on court is always viewed seriously. A
collusion or conspiracy with a view to dep~e the rights of
E
.. the others in relation to a property would· render the r-
transaction void ab initio. Fraud and deception are
synonymous. Although in a given case a deception may f-
, not amount to fraud, fraud is anathema to all equitable
. principles and any affair tainted with fraud cannot be
F perpetuated or saved by the application of any equitable
" doctrine including res judicata. (See Ram Chandra -Singh ~
v. Savitri Devi and Ors. (2003 (8) SCC 319).
"Fraud" and collusion vitiate even the most .solemn
proceedings in any civilized system of jurisprudence. It is
G a concept descriptive of human conduct. Michael Levi
likens a fraudster to Milton's sorcerer, Com us, who exulted
in his ability to, 'wing me into the easy hearted man and y
trap him into snares'. It has been defined as an act of
trickery or deceit. In Webster's Third New International
H Dictionary "fraud" in equity has been defined as an act or
BEHARI KUNJ SAHKARI AVAS SAMITI v. STATE OF 351
U.P. & ORS. [DR. ARIJIT PASAYAT, J.]
-,:- .
omission to act or concealment by which one person A
obtains an advantage against conscience over another or
which equity or public policy forbids as being prejudicial
to another. In Black's Legal Dictionary, "fraud" is defined
as an intentional perversion of truth for the purpose of
inducing another in reliance upon it to part with some B
. _ -j_ valuable thing belonging to him or surrender a legal right;
a false representation of a matter of fact whether by words
or by conduct, by false or misleading allegations, or by
concealment of that which should have been disclosed,
which deceives and is intended to deceive another so c
that he shall act upon it to his legal injury. In Concise Oxford
Dictionary, it has been defined as criminal deception, use
of false representation to gain unjust advantage; dishonest
artifice or trick. According to Halsbury's Laws of England,
a representation is deemed to have been false, and
D
therefore a misrepresentation, if it was at the material
, date false in substance and in fact. Section 17 of the
"i
Indian ContractAct, 1872 defines "fraud" as act committed
by a party to a contract with intent to deceive another.
From dictionary meaning or even otherwise fraud arises
out of deliberate active role of representator about a fact, E
which he knows to be untrue yet he succeeds in misleading
the representee by making him believe it to be true. The
representation to become fraudulent must be of fact with
knowledge that it was false. In a leading English case i.e.
Derry and Ors. v. Peek (1886-90) All ER 1- what constitutes F
"fraud" was described thus: (All ER p. 22 8-C) "fraud" is
proved when it is shown that a false representation has
been made (i) knowingly, or (ii) without belief in its truth, or
(iii) recklessly, careless whether it be true or false". But
"fraud" in public law is not the same as "fraud" in private G
law. Nor can the ingredients, which establish "fraud" in
commercial transaction, be of assistance in determining
fraud in Administrative Law. It has been aptly observed by
Lord Bridge in Khawaja v. Secretary of State for Home
Deptt. (1983) 1 All ER 765, that it is dangerous to introduce H
352 SUPREME COURT REPORTS [2008] 11 S.C.R.
A maxims of common law as to effect of fraud while
determining fraud in relation of statutory law. "Fraud" in
relation to statute must be a colourable transaction to
evade the provisions of a statute. "If a statute has been
passed for some one particular purpose, a court of law
B will not countenance any attempt which may be made to
extend the operation of the Act to something else which is ,t- ...
quite foreign to its object and beyond its scope. Present
day concept of fraud on statute has veered round abuse
of power or mala fide exercise of power. It may arise due
c to overstepping the limits of power or defeating the
provision of statute by adopting subterfuge or the power
may be exercised for extraneous or irrelevant
considerations. The colour of fraud in public law or
administration law, as it is developing, is assuming different
shades. It arises from a deception committed by
D
disclosure of incorrect facts knowingly and deliberately to
invoke exercise of power and procure an order from an ;--
authority or tribunal. It must result in exercise of jurisdiction
which otherwise would not have been exercised. The
misrepresentation must be in relation to the conditions
E provided in a section on existence or non-existence of
which the power can be exercised. But non-disclosure of
a fact not required by a statute to be disclosed may not
amount to fraud. Even in commercial transactions non-
disclosure of every fact does not vitiate the agreement. "In
F a contract every person must look for himself and ensures
that he acquires the information necessary to avoid bad
bargain. In public law the duty is not to deceive. (See
Shrisht Ohawan (Smt.) v. Mis. Shaw Brothers, (1992 (1)
sec 534).
G
This aspect of the matter has been considered by this
Court in Roshan Deen v. Preeti Lal (2002 (1) SCC 100)
Ram Preeti Yadav v. UP Board of High School and y
Intermediate Education (2003 (8) SCC 311), Ram
Chandra Singh's case (supra), Ashok Leyland Ltd. v. State
H
BEHAR! KUNJ SAHKARI AVAS SAMITI v. STATE OF 353
U.P. & ORS. [DR. ARIJIT PASAYAT, J.]
'I
of TN. and Another (2004 (3) sec 1) and State of A.P. A
· & Anr. v. T. Suryachandra Rao [ (2005) 6 SCC 149].
Suppression of a material document would also amount
to a fraud on the court. (see Gowrishankar v. Joshi Amba
Shankar Family Trust (1996 (3) SCC 310) and S.P
Chengalvaraya Naidu's case (supra). B
.. +
"Fraud" is a conduct either by letter or words, which
induces the other person or authority to take a definite
determinative stand as a response to the conduct of the
former either by words or letter. Although negligence is not c
fraud but it can be evidence on fraud; as observed in Ram
Preeti Yadav's case (supra).
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 D
it has been obtained by fraud. Fraud unravels everything."
In the same judgment Lord Parker LJ observed that fraud
"vitiates all transactions known to the law of however high
a degree of solemnity".
14. Stand in essence is that after dismissal of the writ pe- E
titian and three earlier orders, revision under Section 27 was
maintainable. Stand of the State is that there was no jurisdic-
tion to move any particular authority. A new case was tried to be
made, which was not the case earlier. An appeal was already
filed without indicating as to under which provision it was filed. F
Second appeal against eviction was not maintainable. There
was constructive res judicata, and there is no provision to move
after 9 years for transfer of the kothi. It is significant that all pre-
vious orders which have relevance were suppressed. There is
substance in what is submitted. G
15. It is to be noted that suit was filed against Tuljaram.
Subsequently there was a compromise between Tuljaram and
Bhagwan Das. It is relevant to note that Bhagwan's claim was
that there was an agreement of sale between Tuljaram and
H
354 SUPREME COURT REPORTS [2008] 11 S.C.R.
A Bhagwan Das. It is to be further noted that in the counter affida-
vit filed by Tuljraram there is no reference to the alleged agree-
ment with Bhagwan Das. He is a local person and not a dis-
placed person. Therefore, he has no right to get the property.
There is no distinction between original order and the revisional
B order. Law is fairly well settled that even if an order is a nullity
same has to be challenged. [See: State of Punjab and Ors. v.
Gurdev Singh (1991(4) SCC 1)].
16. Above being the position, the High Court was justified
in its view and no interference is called for.
c
17. Appeal is dismissed accordingly. But there shall be
no order as to costs.
S.K.S. Appeal dismissed.
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