SMT. BADAMI (DECEASED) BY HER L.R.versusBHALI

                      [2012] 6 S.C.R. 75


         SMT. BADAMI (DECEASED) BY HER L.R.                          A
                                v.
                            BHALI
               (Civil Appeal No. 1723 of 2008)

                         MAY 22, 2012.
                                                                     B
      [DR. B.S. CHAUHAN AND DIPAK MISRA, JJ.]

     SUIT:

       Fraudulent suit - Suits for permanent injunction and          c
possession - Based on an earlier compromise decree - Held:
 All facets of fraud get attracted to the case at hand - A rustic
 and illiterate woman is taken to court by a relation on the plea
 of creation of a lease deed and magically in a hurried manner
 the plaint is presented, written statement is drafted and filed,    D
 statement is recorded and a decree is passed within three
 days - It not only gives rise to a doubt but indicates that there
 is some kind of foul play - However, the trial judge who
 decreed the first suit on 27. 11. 1973 did not look at these
 aspects as also the requirement of 0. 10, r.1, CPC - The            E
judgment is vitiated by fraud - When the subsequent suits
 were filed, the courts below routinely followed the principles
 relating to consent decree and did not dwell deep to find out
 how the fraud was manifestly writ large - The foundation was
 a family arrangement, which was not bona fide - No iota of          F
 evidence has been brought on record that the plaintiff had
given anything to the defendant in the arrangement - It is a
matter of record that the possession was not taken over and
inference has been drawn that possibly there was an implied
agreement that the decree would be given effect to after her
death - All these reasonings are absolutely non-plausible and        G
common sense does not even remotely give consent to them
- The whole thing was buttressed on the edifice of fraud - The
impugned judgments and decrees are set aside - As a natural
corollary, the judgment and decree dated 27. 11. 1973 is also
                                 75                                  H
    76          SUPREME COURT REPORTS           [2012] 6 S.C.R.


A set aside - Code of Civil Procedure, 1908 - 0.10, r. 1 and 0.
    15, r. 1.

         DEEDS AND DOCUMENTS:

       Family arrangement - Held.· Though, a family
8 arrangement need not be construed narrowly and it need not
  be registered, but it must prima facie appear to be genuine
  which is not so in the case at hand - That apart, there was no
  reason to exclude the daughter and the son-in-law - It is
  impossible to perceive any dispute over any property or the
C possibility of it in future - On the contrary, in this so called
  family settlement the whole property of the defendant is given
  to the plaintiff - It cannot be accepted to be a bona fide
  settlement.

o        The plaintiff and the original defendant's late
    husband were the descendants of a common ancestor.
    In a prior arrangement, the said defendant got a share in
    the ancestral property. The plaintiff, on 24.11.1973 filed
    suit No. 1422 of 1973 stating that the defendant, under a
E   family settlement dated 1.6.1972 gave her whole share to
    the plaintiff and also handed over the possession thereof
    to him, but since the revenue entries continued to be in
    her name and there was interference with plaintiff's
    possession over the suit land, the suit for declaration and
F   permanent injunction was ,filed. On the date of
    presentation of the plaint itself, the written statement was
    filed admitting the plaint averment to be correct and
    praying for decree of the suit. The suit was decreed on
    27 .11.1973. It was the case of the plaintiff that the revenue
    entries continued to be in the name of the defendant and
G   she remained in possession of the suit property. He filed
    Civil Suit No. 401 of 1984 for permanent injunction against
    the defendant restraining her from alienating the suit land.
    He also filed Civil Suit No. 784 of 1984 for possession.
    The defendant contested both the suits but her stand that
H   the decree dated 27.11.1973 was obtained by fraud was
    BADAMI (DECEASED) BY HER L.R. v. BHALI               77


not accepted and the suits were decreed. Her appeals          A
were also dismissed. During the pendency of the second
appeals filed by the original defendant, she died and the
name of her daughter was substituted. The second
appeals were also dismissed holding that the original
defendant had failed to discharge the onus that the initial   B
decree dated 27.11.1973 was obtained by fraud.
Aggrieved, the daughter of the original defendant filed the
appeal.

    Allowing the appeal, the Court
                                                              c
     HELD: 1.1. Rule 1 of 0. 10 of the Code of Civil
Procedure, 1908 provides for ascertainment whether
allegations in pleadings are admitted or denied. It
stipulates that "at the first hearing" of the suit the court
shall ascertain from each party or his pleader whether he D
admits or denies such allegations of fact as are made in
the plaint or written statement (if any) of the opposite
party and as are not expressly or by necessary
implication admitted or denied by the party against whom
they are made. The court is required to record such E
admissions and denials. Use of the term 'first hearing of
the suit' in r. 1 has its own signification. Order 15, r. 1 lays
a postulate that where "at the first hearing" of the suit it
appears that the parties are not at issue on any question
of law or of fact, the court may at once pronounce the F
judgment. [Para 12] [86-E-H]

    Kanwar Singh Saini v. High Court of Delhi 2012 (4) SCC
307 - relied on.

      1.2. Keeping in view the pronouncement of law G
relating to the procedure and the lapses committed by the
trial court in the case at hand, the stand of the original
defendant, the predecessor-in-interest of the appellant,
gets fructified. All facets of fraud get attracted to the case
                                                              H
    78       SUPREME COURT REPORTS                [2012] 6 S.C.R.


A   at hand. A rustic and illiterate woman is taken to court by
    a relation on the plea of creation of a lease deed and
    magically in a hurried manner the plaint is presented,
    written statement is drafted and filed, statement is
    recorded and a decree is passed within three days. On a
B   perusal of the decree it is manifest that there is no
    reference of any kind of family arrangement and there is
    total non-application of mind. It only mentions there is
    consent in the written statement and hence, suit has to
    be decreed. Be it noted, it was a suit for permanent
c   injunction. There was an allegation that the defendant
    was interfering with the possession of the plaintiff. What
    could have transpired that the defendant would go with
    the plaintiff and accede to all the reliefs. It not only gives
    rise to a doubt but on a first look one can feel that there
    is some kind of foul play. However, the trial judge who
D   decreed the first suit on 27.11.1973 did not look at these
    aspects. [para 13 and 25] (88-F; 95-F-G; 96-A-D]

        Santosh v. Jagat Ram and another 2010 (2) SCR 429 =
    2010 (3) sec 251- relied on.
E
         1.3. It is a matter of grave anguish that in the first suit
    the court had not applied its mind to the real nature of
    the family arrangement. It has been submitted. on behalf
    of the appellant that there was no need for a family
F   settlement because the defendant had got a part of the
    property in an earlier family arrangement. She had a
    daughter and a son-in-law and she had no cavil with
    plaintiff. She had also to support herself. Though, a family
    arrangement need not be construed narrowly and it need
    not be registered but it must prima facie appear to be
G   genuine which is not so in the case at hand. [para 13] (89-
    D-E]

        Krishna Beharilal (dead) by his legal representatives v.
    Gulabchand and others 1971 Suppl. SCR 27= 1971 AIR
H   1041 ; Kale and others v. Deputy Director of Consolidation
    BADAMI (DECEASED) BY HER L.R. v. BHALI               79


and others 1976 (2) SCR 202 = 1976 AIR 807; Maturi Pullaiah   A
and another v. Maturi Narasimham and others 1966 AIR
1836; S. Shanmugam Pillai & others v. K. Shanmugam Pillai
& others. 1973 (1) SCR 570 = 1972 AIR 2069 - referred to.

     1.4. If the factual matrix of the case in hand is tested B
on the anvil of the decisions of this Court, the family
arrangement does not remotely appear to be a bona fide.
The plaintiff had no semblance of right in the property.
All rights had already been settled and the defendant was
the exclusive owner in possession. It is difficult to C
visualise such a family settlement. More so, it is
absolutely irrational that the defendant would give
everything to the plaintiff in lieu of nothing and suffer a
consent decree. That apart, there was no reason to
exclude the daughter and the son-in-law. It is well nigh
impossible to perceive any dispute over any property or 0
the possibility of it in future. On the contrary in this so-
ca lled family settlement the whole property of the
defendant is given to the plaintiff. It cannot be accepted
to be a bona fide settlement [para 17] [93-B-E]
                                                               E
     1.5. It is, therefore, clear as crystal that the judgment
and decree passed in civil suit No. 1422 of 1973 on
27.11.1973 are fundamentally fraudulent. It is a case which
depicts a picture that the delineation by the trial Judge
was totally ephemeral. The judgement is vitiated by fraud. F
[para 18] [93-F]

     S. B. Noronah v. Prem Kumari Khanna 1980 (1) SCR
281 =1980 AIR 193; S. P. Chengalvaraya Naidu (dead) by
L.Rs. v. Jagannath (dead) by L.Rs. and others 1993 (3) Suppl. G
SCR 422 = 1994 AIR 853; Smt. Shrist Dhawan v. Mis. Shaw
1991 (3) Suppl. SCR 446 =Brothers 1992 AIR 1555 Roshan
Deen v. Preeti Lal 2001 (5) Suppl. SCR 23 = AIR 2002 SC
33; Ram Preeti Yadav v. U. P. Board of High School and
Intermediate Education and other 2003 (3) Suppl. SCR 352
                                                              H
    80       SUPREME COURT REPORTS             [2012] 6 S.C.R.


A   = (2003) 8 SC 311; and Ram Chandra Singh v. Savitri Devi
    and others 2003 (4) Suppl. SCR 543 = (2003) 8 SCC 319;
    State of Andhra Pradesh and another v. T. Suryachandra Rao
    2005 (1) Suppl. SCR 809 =AIR 2005 SC 311 O; Hamza Haji
    v. State of Kera/a & Anr. 2006 (4) Suppl. SCR 604 =AIR 2006
B   SC 3028 - referred to.

        Halsbury's Laws of England, Vol. 16 Fourth Edition
    para 1553 - referred to.

         2.1. When the second suit was filed in 1984 for title
C   and the third suit was filed for possession thereafter, the
    courts below had routinely followed the principles
    relating to consent decree and did not dwell deep to find
    out how the fraud was manifestly writ large. It was too
    obvious to ignore. The courts below have gone by the
D   concept that there was no adequate material to establish
    that there was fraud, though it was telltale. That apart the
    foundation was the family arrangement, which was not
    bona fide. [para 25] [96-D-E]

E        2.2. No iota of evidence has been brought on record
    that the plaintiff had given anything to the defendant in
    the arrangement. It is easily perceivable that the rustic
    woman was also not old. Though the decree was passed
    in 1973 wherein it was alleged that the defendant was
    already in possession, she lived up to 1992 and expired
F   after 19 years. It is a matter of record that the possession
    was not taken over and inference has been drawn that
    possibly there was an implied agreement that the decree
    would be given effect to after her death. All these
    reasonings are absolutely non-plausible and common
G   sense does not even remotely give consent to them. The
    whole thing was buttressed on the edifice of fraud. The
    impugned judgments and decrees are set aside. As a
    corrolary the judgment and decree dated 27 .11.1973 is
    also set aside. [para 25-26] [96-G-H; 97-A, C-D]
H
    BADAMI (DECEASED) BY HER L.R. v. BHALI             81


                    Case Law Reference:                     A

    2010 (2) SCR 429          relied on          para 10
    2012 (4) sec 307          relied on          para 12
    1971 Suppl. SCR 27        referred to        para 14    B
    1976 (2) SCR 202          referred to        para 15
    1966 AIR 1836             referred to        para 16
    1973 (1) SCR 570          referred to        para 16
                                                            c
    1980 (1) SCR 281          referred to        para 18
    1993 (3) Suppl. SCR 422 referred to          para 20
    1991 (3) Suppl. SCR 446 referred to          para 22
    2001 (5) Suppl. SCR 23    referred to        para 22    DI
    2003 (3) Suppl. SCR 352 referred to          para 22
    2003 (4 ) Suppl. SCR 543 referred to         para 22
    2005 (1) Suppl. SCR 809 referred to          para 22    E
    2006 (4) Suppl. SCR 604 referred to          para 24

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1723 of 2008.
                                                            F
    From the Judgment & Order dated 1.9.2006 of the High
Court of Punjab & Haryana at Chandigarh in RS.A. No. 2001
and 2002 of 1988.

    V.K. Jhanji, Jyoti Mendiratta, Deeksha Ladi for the
Appellant.                                                  G

    Neeraj Kr. Jain, Sanjay Singh, Pratham Kant, Ugra
Shankar Prasad for the Respondent.

    The Judgment of the Court was delivered by
                                                            H
      82        SUPREME COURT REPORTS                 (2012] 6 S.C.R.


  A       DIPAK MISRA, J. 1. The singular question that arises for
    consideration in this appeal by way of special leave under
    Article 136 of the Constitution of India is whether the judgment
    and decree dated 27.11.1973 passed by the learned sub-
    Judge, Kaithal in Civil Suit No. 1422 of 1973 is to be declared
  B as a nullity being vitiated by fraud and manifest illegality being
    writ large and thereby the claim of right, title and interest and
    possession based on the said judgment and decree by the
    respondent-plaintiff in the subsequent suits, namely, Civil Suit
    No. 401 of 1984 and Civil Suit No. 784 of 1984 which have
  c been decreed and got affirmance by a composite order
    passed by the Additional District Judge, Kurukshetra in Civil
    Appeal No. 19/13 of 1987 and Civil Appeal No. 18/13 of 1986
    and further gained concurrence by the learned single Judge of
    the High Court of Punjab and Haryana at Chandigarh in R.S.A.
, D Nos. 2001 of 1988 and 2002 of 1988, is bound to collapse and
    founder.

            2. To appreciate the controversy, it is incumbent to travel
      to the year 1973 as to how the original suit was instituted,
      proceeded and eventually decreed. For the said purpose it is
  E   necessary to note that one Dai Ram was the common
      ancestor. He had two sons, namely, Dinda and Rachna. Dinda
      had one son, namely, Roora and Rachna had one son, namely,
      Ram Chand. Badami was the widow of Roora and Bhaii is the
      son of Ram Chand. Risali is the daughter of Roora and Badami.
  F   Bhali, respondent herein, instituted Civil Suit No. 1422of1973
      on 24.11.1973 alleging that Badami was the owner of 1894/
      9549 share of the ancestral land and had received it at a prior
      arrangement. When she was in possession, there was a family
      settlement on 1.6.1972 and in that family settlement the
  G   defendant gave her whole share to the plaintiff-Bhali and the
      possession of the same was also handed over in pursuance
      of that settlement. As pleaded, the defendant-Badami agreed
      that he would get the revenue entries of the suit land corrected
      in favour of the plaintiff but the name of the defendant continued
  H   as owner in the revenue records and despite the request of the
    BADAMI (DECEASED) BY HER LR. v. BHALI                      83
               [DIPAK MISRA, J.]
plaintiff therein not to interfere with the possession there was     A
interference. Hence, he had been compelled to file a suit for
declaration and for permanent injunction.

     3. On the date of presentation of the plaint, the defendant
in the suit, Badami, filed the written statement admitting the       B
assertions in the plaint to be correct and, in fact, prayed for
decree of the suit. The learned sub-Judge, Kaithal on
27 .11.1973 decreed the suit.

      4. As the facts would reveal, in spite of the said consent
decree the record of entries stood in the name of Badami and         C
she remained in possession and enjoyed the same. The
respondent- Bhali, thereafter, initially instituted Civil Suit No.
401 of 1984 seeking permanent injunction against her
restraining from alienating the land in any manner. The learned
trial Judge relied on the earlier judgment and decree dated          D
27 .11.1973, did not accept the stand put forth by the defendant
that the said decree was obtained by fraud and passed a
decree for permanent injunction restraining the defendant from
alienating the suit land to anyone in any manner.
                                                                     E
     5. In the second suit for possession, the learned trial Judge
framed two vital issues, namely, whether the plaintiff was owner
of the suit land and whether the impugned decree dated
27 .11.1973 is null, void and not binding on the rights of the
defendants and, thereafter, came to hold that factual matrix
would show that the decree was passed three days after and           F
Badami had appeared in the court, and hence, the decree was
validly passed. On appeals being preferred, the learned
Additional District Judge affirmed the said findings further
elaborating the reasoning that Badami had appeared in court,
made a statement and given the thumb mark and further she            G
had not been able to discharge the onus that the decree was
obtained by fraud. The appellate court gave credence to the
family settlement and also took note of the fact that the parties
were related and hence, there was no reason to discard the
family settlement; and that it was a common phenomenon that          H
    84       SUPREME COURT REPORTS                [2012] 6 S.C.R.


A a member of a family is given property out of love and affection.
  The learned appellate Judge opined that though after the
  decree dated 27 .11.1973 the possession was with the
  appellant and the revenue entry had not been corrected, that
  was possibly due to an implied understanding between the
B parties that the arrangement under the decree would be worked
  out only after the death of the appellant, i.e., Badami. Being of
  this view, the learned appellate Judge dismissed both the
  appeals.

C      6. Being aggrieved, Badami, the original defendant,
  preferred two Regular Second Appeals, namely, R.S.A. Nos.
  2001 of 1988 and 2002 of 1988. During the pendency of the
  appeals, she expired and Risali, her daughter, was substituted
  by order dated 21.2.1992 in both the appeals. The learned
  single Judge who dealt with the appeals by the impugned
D judgment dated 1st September, 2006 referred to the issues
  framed by the learned trial Judge, the analysis made by the
  courts below and came to hold that original defendant No. 1
  had failed to discharge the onus that the initial decree dated
  27.11.1973 was obtained by fraud inasmuch as she had given
E a statement in court and put the thumb impression and that the
  conclusion drawn by the courts below were justified being
  based on facts and did not warrant any interference as no
  substantial question of law was involved.

F       7. We have heard learned counsel for the parties and
    perused the records.

         8. To appreciate the controversy, it is appropriate to refer
    to para 3 of the plaint presented on 24.11.1973. It reads as
    follows:-
G
         "3. That the parties entered into a family settlement on 1/
         6/72 and in that family settlement the defendant gave her
         whole share to the plaintiff and the possession of the same
         was also handed over to the plaintiff in pursuance of that
H        family settlement, the defendant also agreed that he would
      BADAMI (DECEASED) BY HER L.R. v. BHALI                      85
                 [DIPAK MISRA, J.]
      get the revenue entries of the suit land corrected in favour      A
      of the plaintiff, but the name of the defendant is still
      continuing as owner in the revenue records."

     9. From the perusal of the averments made in the plaint, it
is obvious that emphasis was laid on the family settlement and
                                                                        B
handing over of possession. It is interesting to note that the first
appellate court had opined that the possession remained with
Badami and the revenue entries were not corrected and
continued possibly due to implied understanding but the plaintiff
was compelled to file the second suit when there was
interference. It has come out on the testimony of evidence of           C
Badami that she was absolutely illiterate. The only ground on
which the courts have proceeded that there was a consent
decree and allegation of fraud had not been established.

     10. In this context, we may usefully refer to the decision in      o
Santosh v. Jagat Ram and another1 wherein this Court was
dealing with a situation almost similar to the present nature. In
the said case the day the plaint was presented, on the same
day written statement was also filed, evidence of the plaintiff
and the defendant was recorded and the judgment was also                E
made ready along with a decree on the same day. In that
context, this Court observed as follows: -

      "This, by itself, was sufficient to raise serious doubts in the
      mind of the courts. Instead, the appellate court went on to
      believe the evidence of Dharam Singh (OW 1), record               F
      keeper, who produced the files of the summons. One
      wonders as to when was the suit filed and when did the
      Court issue a summons and how is it that on the same day,
      the written statement was also ready, duly drafted by the
      other side lawyer S.K. Joshi (OW 3)."                             G

      The Bench further proceeded to observe as follows: -

      "We are anguished to see the attitude of the Court, who
1.   (2010) 3 sec 251.                                                  H
    86        SUPREME COURT REPORTS                 [2012] 6 S.C.R.


A        passed the decree on the basis of a plaint and a written
         statement, which were filed on the same day. We are also
         surprised at the observations made by the appellate court
         that such circumstance could not, by itself, prove the
         fraudulent nature of the decree.
B               A fraud puts an end to everything. It is a settled
         position in law that such a decree is nothing, but a nullity."

       11. From the aforesaid decision it becomes quite clear
  that this Court expressed a sense of surprise the way the suit
C in that case proceeded with and also expressed its anguish
  how the court passed a decree on the foundation of a plaint
  and a written statement that were filed on the same day.

        12. It is seemly to note that the Code of Civil Procedure
  provides how the court trying the suit is required to deal with
0
  the matter. Order IV Rule 1 provides for suit to be commenced
  by plaint. Order V Rule 1(1) provides when the suit has been
  duly instituted, a summon may be issued to defendant to
  appear and answer the claim on a day to be therein specified.
  As per the proviso to Order V Rule 1 no summon need be
E issued if the defendant appears and admits the claim of the
  plaintiff. Order X deals with the examination of parties by the
  court. Rule 1 of Order X provides for ascertainment whether
  allegations in pleadings are admitted or denied. It stipulates that
  "at the first hearing" of the suit the court shall ascertain from
F each party or his pleader whether he admits or denies such
  allegations of fact as are made in the plaint or written statement
  (if any) of the opposite party and as are not expressly or by
  necessary implication admitted or denied by the party against
  whom they are made. The court is required to record such
G admissions and denials. Use of the term 'first hearing of the
  suit' in Rule 1 has its own signification. Order XV Rule 1 lays a
  postulate that where "at the first hearing" of the suit it appears
  that the parties are not at issue on any question of law or of
  fact, the court may at once pronounce the judgment. Recently,
H
      BADAMI (DECEASED) BY HER L.R. v. SHALi                     87
                 [DIPAK MISRA, J.]
this Court in Kanwar Singh Saini v. High Court of DelhP-, while        A
dealing with the concept of first hearing, speaking through one
of us (Dr. S.S. Chauhan, J) has opined thus: -

      "12. The suit was filed on 26-4-2003 and notice was
      issued returnable just after three days i.e. on 29-4-2003
                                                                       8
      and on that date the written statement was filed and the
      appellant appeared in person and the statement was
      recorded. Order 10 Rule 1 CPC provides for recording
      the statement of the parties to the suit at the "first hearing
      of the suit" which comes after the framing of the issues
      and then the suit is posted for trial i.e. for production of     C
      evidence. Such an interpretation emerges from the
      conjoint reading of the provisions of Order 10 Rule 1, Order
      14 Rule 1(5) and Order 15 Rule 1 CPC. The cumulative
      effect of the aboverffered provisions of CPC comes to that
      the "first hearing of the suit" can never be earlier than the    D
      date fixed for the preliminary examination of the parties
      and the settlement of issues. On the date of appearance
      of the defendant, the court does not take up the case for
      hearing or apply its mind to the facts of the case, and it is
      only after filing of the written statement and framing of        E
      issues, the hearing of the case commences. The hearing
      presupposes the existence of an occasion which enables
      the parties to be heard by the court in respect of the cause.
      Hearing, therefore, should be first in point of time after the
      issues have been framed.                                         F

      13. The date of "first hearing of a suit" under CPC is
      ordinarily understood to be the date on which the court
      proposes to apply its mind to the contentions raised by
      the parties in their respective pleadings and also to the        G
      documents filed by them for the purpose of framing the
      issues which are to be decided in the suit. Thus, the
      question of having the "first hearing of the suit" prior to
      determining the points in controversy between the parties

2.   (2012) 4 sec 307.                                                 H
    88         SUPREME COURT REPORTS               [2012] 6 S.C.R.


A         i.e. framing of issues does not arise. The words "first day
          of hearing" do not mean the day for the return of the
          summons or the returnable date, but the day on which the
          court applies its mind to the case which ordinarily would
          be at the time when either the issues are determined or
B         evidence is taken. (Vide Ved Prakash Wadhwa v. Vishwa
          Mohan 3 , Sham Lal v. Atme Nand Jain Sabha4, Siraj
          Ahmad Siddiqui v. Prem Nath Kapoor° and Mangat
          Singh Trilochan Singh v. Satpa/6."

          After so stating, it has been further observed as follows: -
c
                "From the above fact situation, it is evident that the
          suit was filed on 26-4-2003 and in response to the notice
          issued in that case, the appellant-defendant appeared on
          29.4.2003 in person and filed his written statement. It was
D         on the same day that his statement had been recorded by
          the court. We failed to understand as to what statutory
          provision enabled the civil court to record the statement
          of the appellant-defendant on the date of filing the written
          statement. The suit itself has been disposed of on the
E         basis of his statement within three weeks of the institution
          of the suit."

          13. Keeping in view the aforesaid pronouncement of law
    relating to the procedure and the lapses committed by the trial
    court in the case at hand, the stand of the original defendant,
F
    the predecessor-in-interest of the present appeal gets fructified.
    From the evidence brought on record, it is perceptible that
    Badami was a rustic and an illiterate woman; that she had one
    daughter who was married and there was no animus between
    them to exclude her from the whole property; and that the
G   concept of family arrangement is too farfetched to give any kind

    3.   (1981) 3 sec 667 : AIR 1982 SC 816.
    4.   (1987) 1 sec 22 : AIR 1987 SC 197.
    5.   (1993) 4 sec 406 : AIR 1993 SC 2525.
H   6.   (2003) 8 sec 357 : AIR 2003 SC 4300.
      BADAMI (DECEASED) BY HER L.R. v. BHALI                   89
                 [DIPAK MISRA, J.]

of credence. That apart, the filing of written statement, the        A
recording of statement and taking the thumb impression in a
hurried manner further nurtures the stance that the defendant
was totally unaware as to what had happened. The averments
in the plaint show that the plaintiff was put in possession but
as she was going to alienate the property because of record          B
of rights reflected name of Badami, the suit was filed for
permanent injunction restraining her from alienating in any
manner and the defendant conceded to the same. The
averments in the plaint show that the defendant had refused the
 request of the plaintiff on 11.11.1973 not to interfere with the    c
 possession yet she accompanied him to suffer a consent
decree. It is worth noting that there is evidence on record that
she was brought to the court premises to execute the lease
deed for a period of two years and she had faith in Bhali. It is
a matter of grave anguish that in the first suit the court had not
                                                                     D
applied its mind to the real nature of the family arrangement.
The learned counsel for the appellant has submitted that there
was no need for a family settlement because Badami had got
a part of the property in an earlier family arrangement. She had
a daughter and a son-in-law and she had no cavil with plaintiff.
                                                                     E
She had also to support herself. He fairly submitted that the
family arrangement need not be construed narrowly and it need
not be registered but it must prima facie appear to be genuine
which is not so in the case at hand.

     14. In this regard we may refer with profit to certain          F
authorities of this Court. In Krishna Beharilal (dead) by his
legal representatives v. Gulabchand and others 7 a
compromise decree had come into existence, on the basis of
a compromise deed which specifically stated that the properties
given to one Pattobai were to be enjoyed by her as "Malik            G
Mustakil". This Court referred to certain decisions in the field
and opined that the circumstances under which the compromise
was entered into as well as the language used in the deed did
not in any manner go to indicate that the estate given to
7.   AIR 1971 SC 1041.                                               H
    90         SUPREME COURT REPORTS                [2012] 6 S.C.R.


A   Pattobai was anything other than an absolute estate. The High
    Court had treated the compromise decree to be illegal on the
    basis that a Hindu widow could not have enlarged her own
    rights by entering into a compromise in a suit. This Court
    observed that this was not a compromise entered into with third
B   parties. It was a compromise entered into with the presumptive
    reversioners and in that case the issue would be totally
    different. Further, the question arose whether there could have
    been any family settlement. In that context, this Court held as
    follows:-
c         "8 ...... It may be noted that Lakshmichand and Ganeshilal
          who along with Pattobai were the principal parties to the
          compromise were the grand-children of Parvati who was
          the aunt of Bulakichand. The parties to the earlier suit were
          near relations. The dispute between the parties was in
D         respect of a certain property which was originally owned
          by their common ancestor namely Chhedilal. To consider
          a settlement as a family arrangement, it is not necessary
          that the parties to the compromise should all belong to one
          family. As observed by this Court in Ram Charan Das v.
E         Girija Nandini Devi8, the word "family" in the context of
          the family arrangement is not to be understood in a narrow
          sense of being a group of persons who are recognised
          in law as having a right of succession or having a claim
          to a share in the property in dispute. If the dispute which
F         is settled is one between near relations then the
          settlement of such a dispute can be considered as a family
          arrangement- see Ramcharan Oas's case, 1965-3 SCR
          841=(AIR 1966 SC 323) (supra).

          9. The Courts lean strongly in favour of the family
G         arrangements to bring about harmony in a family and do
          justice to its various members and avoid in anticipation
          future disputes which might ruin them all."


H   8.   (1965) 3 SCR 841 =AIR 1966 SC 323.
      BADAMI (DECEASED) BY HER L.R. v. BHALI                    91
                 [DIPAK MISRA, J.]
      15. In Kale and others v. Deputy Director of Consolidation      A
and others9 , it has been held that the object of the arrangement
is to protect family from filing long drawn litigation or perpetual
strifes which mar the unity and solidarity of the family and
create hatred and bad blood between the various members
of the family. Their Lordships opined that the family is to be        B
understood in the wider sense so as to include within its fold            1




not only close relations or legal heirs but even those persons
who may have some sort of antecedent title, a semblance of
claim or even if they have a spes successionis so that future
disputes are sealed forever and litigation are avoided. What          C
could be the binding effect and essentials for a family
settlement were expressed thus:-

       "10. In other words to put the binding effect and the
       essentials of a family settlement in a concretised form, the
       matter may be reduced into the form of the following           D
       propositions:

      (1) The family settlement must be a bona fid,e one so as
      to resolve family disputes and rival claims by a fair and
      equitable division or allotment of properties between the       E
      various members of the family;

      (2) The said settlement must be voluntary and should not
      be induced by fraud, coercion or undue influence;

      (3) The family arrangements may be even oral in which           F
      case no registration is necessary;

      (4) It is well settled that registration would be necessary
      only if the terms of the family arrangement are reduced
      into writing. Here also, a distinction should be made           G
      between a document containing the terms and recitals of
      a family arrangement made under the document and a
      mere memorandum prepared after the family arrangement
      had already been made either for the purpose of the
9.   AIR 1976 SC 807.                                                 H
    92        SUPREME COURT REPORTS                  [2012] 6 S.C.R.


A        record or for information of the court for making necessary
         mutation. In such a case the memorandum itself does not
         create or extinguish any rights in immovable properties and
         therefore does not fall within the mischief of Section 17(2)
         (sic) (Sec. 17 (1) (b)?) of the Registration Act and is,
B        therefore, not compulsorily registrable;

         (5) The members who may be parties to the family
         arrangement must have some antecedent title, claim or
         interest even a possible claim in the property which is
         acknowledged by the parties to the settlement. Even if one
c        of the parties to the settlement has no title but under the
         arrangement the other party relinquishes all its claims or
         titles in favour of such a person and acknowledges him to
         be the sole owner, then the antecedent title must be
         assumed and the family arrangement will be upheld and
D        the Courts will find no difficulty in giving assent to the same;

         (6) Even if bona fide disputes, present or possible, which
         may not involve legal claims are settled by a bona fide
         family arrangement which is fair and equitable the family
E        arrangement is final and binding on the parties to the
         settlement."

          16. We may note that the principles stated in Maturi
    Pullaiah and another v. Maturi Narasimham and others10 were
    reiterated in S. Shanmugam Pillai & others v. K. Shanmugam
F   Pillai & others11 • in the following terms:-

         "ln Maturi Pullaiah v. Maturi Narasimham, AIR 1966 SC
         1836 this Court held that although conflict of legal claims
         in praesenti or in future is generally a condition for the
G        validity of family arrangements, it is not necessarily so.
         Even bona fide disputes present or possible, which may
         not involve legal claims would be sufficient. Members of a

    10. AIR 1966 SC 1836.
H   11. AIR 1972 SC 2069.
    BADAMI (DECEASED) BY HER L.R. v. BHALI                       93
               [DIPAK MISRA, J.]

    joint Hindu family may, to maintain peace or to bring about        A
    harmony in the family, enter into such a family arrangement.
    If such an agreement is entered into bona fide and the
    terms thereto are fair in the circumstances of a particular
    case, the Courts would more readily give assent to such
    an agreement than to avoid it."                                    B

      17. If the present factual matrix tested on the anvil of the
aforesaid decisions, the family arrangement does not remotely
appear to be a bona fide. Bhali had not semblance of right in
the property. All rights had already been settled and she was          C
the exclusive owner in possession. It is difficult to visualise such
a family settlement. More so, it is absolutely irrational that
Badami would give everything to Bhali in lieu of nothing and
suffer a consent decree. That apart, there was no reason to
exclude the daughter and the son-in-law. Had there been any
likely possibility of any future legal cavil betWeen the daughter      D
and Bhali the same is understandable. It is well nigh impossible
to perceive any dispute over any property or the possibility of
it in future. On the contrary in this so called family settlement
the whole property of Badami is given to Bhali. We are unable
to accept it to be a bona fide settlement.                             E

      18. From the aforesaid analysis it is clear as crystal that
the judgment and decree passed in civil suit No. 1422 of 1973
on 27 .11.1973 are fundamentally fraudulent. It is a case which
depicts a picture that the delineation by the learned Judge was        F
totally ephemeral. The judgement is vitiated by fraud.

     19. Presently, we shall refer as to how this Court has dealt
with concept of fraud. In S. B. Noronah v. Prem Kumari
Khanna 12 while dealing with the concept of estoppel and fraud
a two-Judge Bench has stated that it is an old maxim that              G
estoppels are odious, although considerable inroad into this
maxim has been made by modern law. Even so, "a judgment
obtained by fraud or collusion, even, it seems a judgment of

12. AIR 1980 SC 193.                                                   H
     94        SUPREME COURT REPORTS                 [2012] 6 S.C.R.


A    the House of Lords, may be treated as a nullity". (See
     Halsbury's Laws of England, Vol. 16 Fourth Edition para 1553).
     The point is that the sanction granted under Section 21, if it has
     been procured by fraud or collusion, cannot withstand invalidity
     because, otherwise, high public policy will be given as hostage
B    to successful collusion.

          20. In S. P. Chenga/varaya Naidu (dead) by L.Rs. v.
     Jagannath (dead) by L.Rs. and others 13 this court commenced
     the verdict with the following words:-

C         ""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
·D        judgment/decree - by the first court or by the highest court
          - has to be treated as a nullity by every court, whether
          superior or inferior. It can be challenged in any court even
          in collateral proceedings."

E         21. In the said case it was clearly stated that the courts of
     law are meant for imparting justice between the parties and one
     who comes to the court, must come with clean hands. A person
     whose case is based on falsehood has no right to appfOacll
     the Court. A litigant who approaches the court, is bound to
     produce all the documents executed by him which are relevant
F    to the litigation. If a vital document is withheld in order to gain
     advantage on the other side he would be guilty of playing fraud
     on court as well as on the opposite party.

       22. In Smt. Shrist Dhawan v. Mis. Shaw Brothers14 it has
G been opined that fraud and collusion vitiate even the most
  solemn proceedings in any civilised system of jurisprudence.
  It has been defined as an act of trickery or deceit. The

     13. AIR 1994 SC 853.
H    14. AIR 1992 SC 1555.
     BADAMI (DECEASED) BY HER L.R. v. BHALI                       95
                [DIPAK MISRA, J.]
aforesaid principle has been reiterated in Roshan Deen v.               A
Preeti La/15, Ram Preeti Yadav v. U. P. Board of High School
and Intermediate Education and other16 and Ram Chandra
Singh v. Savitri Devi and others. 17

    23. In State of Andhra Pradesh and another v. T.
                                                                        B
Suryachandra Rao18 after referring to the earlier decision this
court observed as follows:-

     "In Lazaurs Estate Ltd. v. Beas/ey19 Lord Denning
     observed at pages 712 & 713, "No judgment of a Court,
     no order of a Minister can be allowed to stand if it has           C
     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. "
                                                                        D
     24. Yet in another decision Hamza Haji v. State of Kera/a
& Anr. 20 it has been held that no court will allow itself to be used
as an instrument of fraud and no court, by way of rule of
evidence and procedure, can allow its eyes to be closed to the
fact it is being used as an instrument of fraud. The basic              E
principle is that a party who secures the judgment by taking
recourse to fraud should not be enabled to enjoy the fruits
thereof.

     25. It would not be an exaggeration but on the contrary an
understatement if it is said that all facets of fraud get attracted     F
to the case at hand. A rustic and illiterate woman is taken to
court by a relation on the plea of creation of a lease deed and
magically in a hurried manner the plaint is presented, written

15. AIR 2002 SC 33.                                                     G
16. (2003) 8 SC 311.
11. c2003) 8 sec 319.
18. AIR 2005 SC 3110.
19. (1956) 1 QB 702.
20. AIR 2006 SC 3028                                                    H
    96        SUPREME COURT REPORTS                 [2012] 6 S.C.R.

A   statement is drafted and filed, statement is recorded and a       1



    decree is passed within three days. On a perusal of the decree
    it is manifest that there is no reference of any kind of family
    arrangement and there is total non-application of mind. It only
    mentions there is consent in the written statement and hence,
B   suit has to be decreed. Be it noted, it was a suit for permanent
    injunction. There was an allegation that the respondent was
    interfering with the possession of the plaintiff. What could have
    transpired that the defendant would go with the plaintiff and
    accede to all the reliefs. It not only gives rise to a doubt but on
c   a first look one can feel that there is some kind of foul play.
    However, the learned trial Judge who decreed the first suit on
    27.11.1973 did not look at these aspects. When the second
    suit was filed in 1984 for title and the third suit was filed for
    possession thereafter, the courts below had routinely followed
    the principles relating to consent decree and did not dwell deep
0
    to find out how the fraud was manifestly writ large. It was too
    obvious to ignore. The courts below have gone by the concept
    that there was no adequate material to establish that there was
    fraud, though it was telltale. That apart, the foundation was the
    family arrangement. We have already held that it was not bona
E   fide, but, unfortunately the courts below as well as the High
    Court have held that it is a common phenomenon that the
    people in certain areas give their property to their close
    relations. We have already indicated that by giving the entire
    property and putting him in possession she would have been
F   absolutely landless and would have been in penury. It is
    unimaginable that a person would divest herself of one's own
    property in entirety in lieu of nothing. No iota of evidence has
    been brought on record that Bhali, the respondent herein, had
    given anything to Badami in the arrangement. It is easily
G   perceivable that the rustic woman was also not old. Though the
    decree was passed in 1973 wherein it was alleged that the
    defendant was already in possession, she lived up to 1992 and
    expired after 19 years. It is a matter of record that the
    possession was not taken over and inference has been drawn
    th"'t nossibly there was an implied agreement that the decree
    BADAMI (DECEASED) BY HER L.R. v. BHALI                       97
               [DIPAK MISRA, J.]

would be given effect to after her death. All these reasonings         A
are absolutely non-plausible and common sense does not even
remotely give consent to them. It is fraudulent all the way. The
whole thing was buttressed on the edifice of fraud and it needs
no special emphasis to state that what is pyramided on fraud
is bound to decay. In this regard we may profitably quote a            B
statement by a great thinker:

       "Fraud generally lights a candle for justice to get a look at
       it; and rogue's pen indites the warrant for his own arrest."

     26. Ex consequenti, the appeal is allowed and the judgment        C
and decree of the High Court in the Second Appeal as well as
the judgments and decrees of the courts below are hereby set
aside and as a natural corollary the judgment and decree dated
27.11.1973 is also set aside. There shall be no order as to
costs.                                                                 D

R.P.                                              Appeal allowed.