Supreme Court has emphasized that fraud and collusion vitiate the most solemn precedent in any civilized jurisprudence; and that fraud and justice never dwell together (fraus et jus nunquam cohabitant). This maxim has never lost its lustre over the centuries. Thus, any litigant who is guilty of inhibition before the Court should not bear the fruit and benefit of the court’s orders.
The Court has held that fraud is an act of deliberation with a desire to secure something which is otherwise not due. Fraud is practiced with an intention to secure undue advantage. Thus, an act of fraud on courts must be viewed seriously.
It is trite that fraud vitiates everything. It is a settled proposition of law that fraud avoids all judicial acts.
In S.P. Chengalvaraya Naidu vs. Jagannath (Dead) through LRs, (1994) 1 SCC 1 , it has been observed that “fraud avoids all judicial acts, ecclesiastical or temporal.” Further, “no judgment of a court, no order of a minister would be allowed to stand if it has been obtained by fraud. Fraud unravels everything”.[1]
How Fraud is established?
Further, fraud can be established when a false representation has been made,
(i) knowingly, or
(ii) without belief in its truth, or
(iii), recklessly, being careless about whether it be true or false.
While suppression of a material document would amount to a fraud on the Court, suppression of material facts vital to the decision to be rendered by a court of law is equally serious. Thus, once it is held that there was a fraud in judicial proceedings all advantages gained as a result of it have to be withdrawn.
In such an eventuality, doctrine of res judicata or doctrine of binding precedent would not be attracted since an order obtained by fraud is non est in the eye of law.
In K.D. Sharma vs. Steel Authority of India Limited, (2008) 12 SCC 481, the Court held that the jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of the Constitution is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the Writ Court must come with clean hands and put forward all the facts before the Court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the Court, his petition may be dismissed at the threshold without considering the merits of the claim. It was held thus:
“38. The above principles have been accepted in our legal system also. As per settled law, the party who invokes the extraordinary jurisdiction of this Court under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play “hide and seek” or to “pick and choose” the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts.
The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of writ courts and exercise would become impossible. The Petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because “the court knows law but not facts“.
39. … Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, manoeuvring or misrepresentation, which has no place in equitable and prerogative jurisdiction. If the applicant does not disclose all the material facts fairly and truly but states them in a distorted manner and misleads the court, the court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the Rule nisi and refuse to proceed further with the examination of the case on merits.
If the court does not reject the petition on that ground, the court would be failing in its duty. In fact, such an applicant requires to be dealt with for contempt of court for abusing the process of the court.”
In K. Jayaram vs. Bangalore Development Authority, 2021 SCC OnLine SC 1194, a bench of Supreme Court headed by Sri Nazeer, J. noticed that the appellants therein had not come to the Court with clean hands. The appellants in the said case had not disclosed the filing of a suit and its dismissal and also the dismissal of the appeal against the judgment of the Civil Court.
The Court stressed that the parties have to disclose the details of all legal proceedings and litigations either past or present concerning any part of the subject matter of dispute which is within their knowledge in order to check multiplicity of proceedings pertaining to the same subject-matter and more importantly to stop the menace of soliciting inconsistent orders through different judicial forums by suppressing material facts either by remaining silent or by making misleading statements in the pleadings in order to escape the liability of making a false statement.
The Court observed that since the appellants therein had not disclosed the filing of the suit and its dismissal and also the dismissal of the appeal against the judgment of the civil court, the appellants had to be non-suited on the ground of suppression of material facts. They had not come to the court with clean hands and they had also abused the process of law, therefore, they were not entitled to the extraordinary, equitable and discretionary relief.
A Division Bench of the Court comprising Justice B. R. Gavai and Justice C.T. Ravikumar placing reliance on the dictum in S.P. Chengalvaraya Naidu, held in Ram Kumar vs. State of Uttar Pradesh, AIR 2022 SC 4705, that a judgment or decree obtained by fraud is to be treated as a nullity.
[1] Lazarus Estates Ltd. vs. Beasley, (1956) 1 ALL ER 341.