Full Judgment Text
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CASE NO.:
Appeal (civil) 4461 of 2005
PETITIONER:
The State of Andhra Pradesh & Anr.
RESPONDENT:
T. Suryachandra Rao
DATE OF JUDGMENT: 25/07/2005
BENCH:
ARIJIT PASAYAT & C.K. THAKKER
JUDGMENT:
J U D G M E N T
(Arising out of SLP (C) No. 7944 of 2004)
ARIJIT PASAYAT, J.
Leave granted.
The State of Andhra Pradesh and the Mandal Revenue
Officer (in short the ’Revenue Officer’) Peddapuram, East
Godavari call in question legality of the judgment rendered
by a learned Single Judge of the Andhra Pradesh High Court.
By the impugned order the High Court held that the Land
Reforms Appellate Tribunal, East Godavari, Kakinada (in
short "the Appellate Tribunal") and the Land Reforms
Tribunal, Kakinada (in short the "Tribunal") were not
justified in holding that the respondents had fraudulently
taken advantage by suppression of facts; thereby taking
benefit under the Andhra Pradesh Land Reforms (Ceiling on
Agricultural Holdings) Act, 1973, (in short ’the Act’).
Basic features of the case which need to be noted are
as under:
The respondent as declarant submitted a declaration as
regards determination of his ceiling limit of land under the
Act. The Appellate Tribunal passed an order dated 16.11.1978
determining the ceiling limit of the declarant to be surplus
and declared 0.4388 S.H. land to be in excess of the ceiling
limit on the notified date. Thereafter, certain lands were
surrendered and surrender was accepted by order dated
8.5.1991 by the Additional Revenue Divisional Officer, Land
Reforms Kakinada. Subsequently, it was noticed that the land
which was surrendered had already been acquired in
proceedings under the Land Acquisition Act, 1898 (in short
the ’L.A. Act’). Therefore, a notice was issued on 8.2.1995
proposing to consider declaration of alternative lands as
surplus in lieu of the lands which were earlier surrendered.
The Tribunal passed order in this regard after verifying the
records of the land acquisition proceedings. An appeal was
carried to the Appellate Tribunal and the same was
dismissed. A revision was carried under Section 21 of the
Act before the High Court, which by the impugned order held
that it was for the Tribunal to have considered the
correctness of the declaration made by the declarant. After
having accepted the land to be surrendered, it was not to
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open to the Tribunal to vary the order. It was held that
even though power was available to the Tribunal to reopen
the matter and pass necessary orders when fraud was
practiced, in the instant case the Tribunal having accepted
the matter after enquiry, it was not open to take a
different view.
Though the High Court accepted on principle that the
Tribunal has ample power to reopen the matter when the error
is apparent on the face of record, it held that once the
enquiry had been conducted question of reopening the matter
did not arise. It was held that under Section 10(3) of the
Act the Tribunal has to make an enquiry after statement
relating to surrender is filed. Merely because in the
statement it was indicated that some land was proposed to be
surrendered there was no scope for reopening the matter even
though the land was not available to be surrendered.
Learned counsel for the appellants submitted that the
approach of the Tribunal is clearly erroneous. There is no
dispute that the land which was offered for surrender had
already been acquired under the L.A. Act and there was no
scope for the respondent to again offer the said land. This
was clearly fraudulent act and, therefore, the High Court
was not justified in its view.
In response, learned counsel appearing for the
respondent submitted that having accepted the land offered
for surrender after enquiry, it was not open to the Tribunal
to take note of any acquisition earlier.
The order of the High Court is clearly erroneous. There
is no dispute that the land which was offered for surrender
by the respondent had already been acquired by the State and
the same had vested in it. This was clearly a case of fraud.
Merely because an enquiry was made, Tribunal was not
divested of the power to correct the error when the
respondent had clearly committed a fraud.
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 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 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. Vimla v. Delhi Administration (1963 Supp. 2 SCR
585) and Indian Bank v. Satyam Febres (India) Pvt. Ltd.
(1996 (5) SCC 550).
A "fraud" is an act of deliberate deception with the
design of securing something by taking unfair advantage of
another. It is a deception in order to gain by another’s
loss. It is a cheating intended to get an advantage. (See
S.P. Changalvaraya Naidu v. Jagannath (1994 (1) SCC 1).
"Fraud" as is well known vitiates every solemn act.
Fraud 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
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response to the conduct of the former either by words or
letter. It is also well settled that misrepresentation
itself amounts 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 party makes representations, which he knows to
be false, and injury enures therefrom although the motive
from which 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 deprive the rights
of the others in relation to a property would render the
transaction void ab initio. Fraud and deception are
synonymous. Although in a given case a deception may not
amount to fraud, fraud is anathema to all equitable
principles and any affair tainted with fraud cannot be
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 a concept descriptive of human conduct. Michael Levi
likens a fraudster to Milton’s sorcerer, Comus, who exulted
in his ability to, ’wing me into the easy hearted man and
trap him into snares’. It has been defined as an act of
trickery or deceit. In Webster’s Third New International
Dictionary "fraud" in equity has been defined as an act or
omission to act or concealment by which one person 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
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 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
therefore a misrepresentation, if it was at the material
date false in substance and in fact. Section 17 of the
Indian Contract Act, 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,
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
"fraud" was described thus: (All ER p. 22 B-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 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,
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that it is dangerous to introduce 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 will not countenance any
attempt which may be made to extend the operation of the
Act to something else which is 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 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 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 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 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 Dhawan (Smt.) v.
M/s. Shaw Brothers, (1992 (1) SCC 534).
In that case it was observed as follows:
"Fraud and collusion vitiate even the most solemn
proceedings in any civilized system of jurisprudence. It is
a concept descriptive of human conduct. Michael levi likens
a fraudster to Milton’s sorcerer, Comus, who exulted in his
ability to, ’wing me into the easy-hearted man and trap him
into snares’". It has been defined as an act of trickery or
deceit. In Webster’s Third New International Dictionary
fraud in equity has been defined as an act or omission to
act or concealment by which one person 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 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 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 therefore a misrepresentation, if it
was at the material date false in substance and in fact.
Section 17 of the Contract Act 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 which he knows to be untrue yet he succeeds in
misleading the representee by making him believe it to be
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true. The representation to become fraudulent must be of
the fact with knowledge that it was false. In a leading
English case Derry v. Peek [(1886-90) ALL ER Rep 1: (1889)
14 AC 337 (HL)] what constitutes fraud was described thus :
(All Er p. 22 B-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’."
This aspect of the matter has been considered recently
by this Court in Roshan Deen v. Preeti Lal (2002 (1) SCC
100) Ram Preeti Yadav v. U.P. Board of High School and
Intermediate Education (2003 (8) SCC 311), Ram Chandra
Singh’s case (supra) and Ashok Leyland Ltd. v. State of T.N.
and Another (2004 (3) SCC 1).
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).
"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 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
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.
Considering the aforesaid principles of law and the
background facts, the Tribunal was justified in modifying
the earlier order and varying it. The Appellate Tribunal did
not commit any error in upholding it. The High court’s order
is clearly unsustainable and is set aside.
The appeal is allowed with no orders as to costs.