Madras HC Rejects Seller’s Late Suit To Undo Ex Parte Specific-Performance Decree, Says Alleged Fraud Between Parties Was Not Fraud On Court

The plaintiff in C.S. No. 132 of 2010 sought to have an ex parte decree for specific performance in C.S. No. 205 of 1999 declared null and void, alleging that the decree-holder had relied on fabricated documents.

The plaintiff had earlier applied to condone a 1,765-day delay in seeking to set aside that decree; the application was dismissed, as was his appeal, and the Supreme Court dismissed his special leave petition.

The 6th defendant applied under Order VII Rule 11 CPC to reject the plaint, arguing that the later suit was barred and amounted to re-litigation. The Single Judge dismissed the application, prompting this appeal.

Under Order VII Rule 11 CPC, a plaint may be rejected, among other grounds, where it discloses no cause of action or the suit appears from its statements to be barred by law; the court ordinarily assesses the plaint’s averments for this purpose.

Article 59 of the Limitation Act, 1963 provides a three-year limitation period for seeking cancellation or setting aside an instrument or decree, running from when the relevant facts entitling the plaintiff to relief become known.

Fraud practised on the court may justify setting aside an order and is distinct from fraud between parties; Indian Bank v. Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550, recognises the court’s inherent power to recall an order obtained by fraud on the court, while a party alleging fraud between litigants may be required to bring a separate suit.

Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC 99, states that res judicata ordinarily cannot be determined at the plaint-rejection stage.

The Court also applied the principle that re-litigation of an issue already decided is an abuse of process, as explained in K.K. Modi v. K.N. Modi, (1998) 3 SCC 573.

The Court found that the plaint alleged fabrication and fraud between the parties, but did not plead facts showing that fraud had been practised on the court to procure the decree.

The prior proceedings had already rejected the plaintiff’s claim that he lacked knowledge of the decree: the court found that summons had been served, and the plaintiff had also remained absent in the execution proceedings, which resulted in registration of the sale deed in 2005.

The Court therefore concluded that the plaintiff could not rely on a later-acquired-knowledge claim to avoid limitation; the suit filed in 2010 was out of time on the pleaded facts.

It further held that an allegation of inter-party fraud or fabrication, in these circumstances, could not be used to re-open a decree that had attained finality; the appropriate remedies had not been pursued successfully, and the later suit was re-litigation and an abuse of process.

It allowed the appeal, set aside the Single Judge’s order dated 3 March 2023, and rejected the plaint in C.S. No. 132 of 2010; it made no order as to costs and closed the connected miscellaneous petition.