Madhya Pradesh High Court
Dharmendra Singh Sengar vs Mohan Vishwakarma on 4 December, 2024
Author: Gurpal Singh Ahluwalia
Bench: G.S. Ahluwalia
NEUTRAL CITATION NO. 2024:MPHC-GWL:21699 1
F.A. No.295/2010
IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G.S. AHLUWALIA
ON THE 4th DECEMBER 2024
F.A. No. 295 OF 2010
DHARMENDRA SINGH SENGAR & ANOTHER
VS.
MOHAN VISHWAKARMA (DEAD) THR. HIS L.R.s AND OTHERS
Appearance : Shri N.K. Gupta, Senior Counsel with Shri S.D.S. Bhadauria,
Counsel for Appellants.
None for respondents no. 1 and 2, though served
Shri D.K. Budholiya, Counsel for respondent no. 3
JUDGMENT
This First Appeal, under Section 96 of CPC, has been filed against the
Judgment and Decree dated 22-9-2010 passed by 3rd Additional District
Judge, Vidisha in Civil Suit No. 18-A/2010.
2. Facts necessary for disposal of present appeal, in short, are that the
appellant filed a civil suit for declaration of Sale deed as null and void and
also for permanent injunction. It was pleaded that the appellant is the owner
of plot admeasuring 40×40 sq. ft situated in Ward No. 34, Puranpura,
Vidisha. The appellant agreed to sell his plot in view of personal
requirements and accordingly decided to sell his plot to respondent for a
consideration of Rs. 1,00,000/-. A registered sale deed dated 18-2-2008 was
executed in favour of respondent and accordingly, the respondent gave a
Signature Not Verified
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SHRIVASTAVA
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F.A. No.295/2010
cheque No. 895632 dated 15-2-2008 for Rs. 1,00,000/-. The cheque was
given in the presence of the Sub-Registrar. However, the respondent
continuously gave an assurance that he would deposit the requisite amount in
his bank but did not do so. Ultimately, he gave another cheque of Rs.
1,00,000/- in the month of Feb. 2009. The appellant presented the cheque
however, the State Bank of Indore informed that the cheque has been
dishonoured on account of insufficient funds. Accordingly, the appellant
sent a registered notice, but the same was not received by the respondent.
Thus, it was prayed that since, the sale deed was without consideration
amount, and the same was got executed by playing fraud on the appellant,
therefore, the appellant is entitled to get the sale deed declared as null and
void and is also entitled to get back the possession.
3. The respondent did not appear before the Trial Court and accordingly
he was proceeded exparte.
4. The Trial Court after recording evidence and hearing the appellant,
dismissed the suit on the ground that a sale deed cannot be declared as null
and void only on the ground that it was executed without consideration
amount.
5. Challenging the judgment and decree passed by the Court below, it is
submitted by Counsel for the Appellant, that it is not a case of execution of
sale deed without consideration. In fact the cheque of Rs. 1,00,000/- was
given in lieu of consideration amount, and since, the cheque stood
dishonoured, therefore, the sale deed was got executed by respondent by
playing fraud on the appellant. It is further submitted that the appellant has
filed I.A. No. 3826 of 2012 for amendment in the plaint, thereby claiming
alternative prayer for refund of Rs. 1,00,000/-. The said application was
allowed by co-ordinate bench of this Court by order dated 8-12-2023.
Signature Not Verified
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SHRIVASTAVA
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F.A. No.295/2010
6. After an application for amendment in the plaint is allowed, then
ordinary course of action should have been to remand the matter to the Trial
Court, but as the Appellant has sought alternative relief, therefore, whether
the matter is liable to be remanded back or not shall be decided after the
merits of the case are considered.
7. The L.R.s of respondent/defendant have not appeared even after
service of notice.
8. Counsel for respondent no. 3 has submitted that he has purchased the
property in question from the L.R.s of original defendant.
9. Heard the learned Counsel for the parties.
10. The Trial Court has dismissed the suit on the ground that sale deed
cannot be declared as null and void merely on the ground that it was
executed without consideration amount.
11. The Trial Court has failed to appreciate the facts of the case in its
proper perspective. It is the case of the appellant, that in lieu of
consideration amount, the cheque was given which subsequently stood
dishonoured as a result the consideration amount remained unpaid. If the
aforesaid aspect is considered then it is clear that the intention of the
respondent was dishonest right from the very inception and his intention was
to play fraud on the appellant as well as not to pay the price of the land. The
Supreme Court in the case of Meghmala v. G. Narasimha Reddy, reported
in (2010) 8 SCC 383 has held as under :
28. It is settled proposition of law that where an applicant gets an
order/office by making misrepresentation or playing fraud upon the
competent authority, such order cannot be sustained in the eye of
the law. “Fraud avoids all judicial acts, ecclesiastical or temporal.”
(Vide S.P. Chengalvaraya Naidu v. Jagannath.) In Lazarus Estates
Ltd. v. Beasley the Court observed without equivocation that : (QB
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F.A. No.295/2010
p. 712) “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.”
29. In A.P. State Financial Corpn. v. GAR Re-Rolling Mills and
State of Maharashtra v. Prabhu this Court observed that a writ
court, while exercising its equitable jurisdiction, should not act as
to prevent perpetration of a legal fraud as the courts are obliged to
do justice by promotion of good faith. “Equity is always known to
defend the law from crafty evasions and new subtleties invented to
evade law.”
30. In Shrisht Dhawan v. Shaw Bros. it has been held as under :
(SCC p. 553, para 20)
“20. Fraud and collusion vitiate even the most solemn proceedings
in any civilised system of jurisprudence. It is a concept descriptive
of human conduct.”
31. In United India Insurance Co. Ltd. v. Rajendra Singh this
Court observed that “Fraud and justice never dwell together” (fraus
et jus nunquam cohabitant) and it is a pristine maxim which has
never lost its temper over all these centuries.
32. The ratio laid down by this Court in various cases is that
dishonesty should not be permitted to bear the fruit and benefit to
the persons who played fraud or made misrepresentation and in
such circumstances the Court should not perpetuate the fraud. (See
Vizianagaram Social Welfare Residential School Society v. M.
Tripura Sundari Devi, Union of India v. M. Bhaskaran, Kendriya
Vidyalaya Sangathan v. Girdharilal Yadav, State of Maharashtra
v. Ravi Prakash Babulalsing Parmar, Himadri Chemicals
Industries Ltd. v. Coal Tar Refining Co. and Mohd. Ibrahim v.
State of Bihar.)
33. Fraud is an intrinsic, collateral act, and fraud of an egregious
nature would vitiate the most solemn proceedings of courts of
justice. Fraud is an act of deliberate deception with a design to
secure something, which is otherwise not due. The expression
“fraud” involves two elements, deceit and injury to the person
deceived. It is a cheating intended to get an advantage. [Vide Vimla
(Dr.) v. Delhi Admn., Indian Bank v. Satyam Fibres (India) (P)
Ltd., State of A.P. v. T. Suryachandra Rao, K.D. Sharma v. SAIL
and Central Bank of India v. Madhulika Guruprasad Dahir.]
34. 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
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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. 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.
Suppression of a material document would also amount to a fraud
on the court. (Vide S.P. Chengalvaraya Naidu, Gowrishankar v.
Joshi Amba Shankar Family Trust, Ram Chandra Singh v. Savitri
Devi, Roshan Deen v. Preeti Lal, Ram Preeti Yadav v. U.P. Board
of High School & Intermediate Education and Ashok Leyland Ltd.
v. State of T.N.)
35. In Kinch v. Walcott it has been held that:
“… mere constructive fraud is not, at all events after long delay,
sufficient but such a judgment will not be set aside upon mere
proof that the judgment was obtained by perjury”.
Thus, detection/discovery of constructive fraud at a much belated
stage may not be sufficient to set aside the judgment procured by
perjury.
36. From the above, it is evident that even in judicial proceedings,
once a fraud is proved, all advantages gained by playing fraud can
be taken away. In such an eventuality the questions of non-
executing of the statutory remedies or statutory bars like doctrine
of res judicata are not attracted. Suppression of any material
fact/document amounts to a fraud on the court. Every court has an
inherent power to recall its own order obtained by fraud as the
order so obtained is non est.
12. Section 25 of Contract Act reads as under :
25. Agreement without consideration void, unless it is in
writing and registered, or is a promise to compensate for
something done, or is a promise to pay a debt barred by
limitation law.–An agreement made without consideration is
void, unless–
(1) it is expressed in writing and registered under the law for the
time being in force for registration of documents, and is made on
account of natural love and affection between parties standing in a
near relation to each other; or unlessSignature Not Verified
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SHRIVASTAVA
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F.A. No.295/2010(2) it is a promise to compensate, wholly or in part, a person who
has already voluntarily done something for the promisor, or
something which the promisor was legally compellable to do; or
unless
(3) it is a promise, made in writing and signed by the person to be
charged therewith, or by his agent generally or specially authorised
in that behalf, to pay wholly or in part a debt of which the creditor
might have enforced payment but for the law for the limitation of
suits.
In any of these cases, such an agreement is a contract.
Explanation 1.–Nothing in this section shall affect the validity, as
between the donor and donee, of any gift actually made.
Explanation 2.–An agreement to which the consent of the
promisor is freely given is not void merely because the
consideration is inadequate; but the inadequacy of the
consideration may be taken into account by the Court in
determining the question whether the consent to the promisor was
freely given.
Illustrations
(a) A promises, for no consideration, to give to B Rs. 1,000. This is
a void agreement.
(b) A, for natural love and affection, promises to give his son, B,
Rs. 1,000. A puts his promise to B into writing and registers it. This
is a contract.
(c) A finds B’s purse and gives it to him. B promises to give A Rs.
50. This is a contract.
(d) A supports B’s infant son. B promises to pay A’s expenses in so
doing. This is a contract.
(e) A owes B Rs. 1,000, but the debt is barred by the Limitation
Act. A signs a written promise to pay B Rs. 500 on account of the
debt. This is a contract.
(f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A’s consent
to the agreement was freely given. The agreement is a contract
notwithstanding the inadequacy of the consideration.
(g) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A denies
that his consent to the agreement was freely given.
The inadequacy of the consideration is a fact which the Court
should take into account in considering whether or not A’s consent
was freely given.
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13. Thus, an agreement without consideration is void unless and until it is
expressed in writing and registered under the law for the time being in force
for registration of documents, and is made on account of natural love and
affection between parties standing in a near relation to each other. If the
facts of the case are considered then it is clear that in the sale deed Ex. P.1 it
was specifically mentioned that the entire consideration amount has been
paid by cheque and nothing is outstanding. Thereafter, it is the case of the
Appellant, that the cheque was given by way of consideration amount, stood
dishonoured. Therefore, it is clear that sale deed was not executed out of
love and affection but it was executed by giving a cheque of consideration
amount, but thereafter, the cheque stood dishonoured. Therefore, it is a case
of fraud.
14. The Trial Court has relied upon Judgment passed by Supreme Court in
the case of Vidhyadhar Vs. Manikrao reported in AIR 1999 SC 1441. The
Supreme Court in the case of Vidhyadhar (Supra) has held as under :
35. Even if the findings recorded by the High Court that the
plaintiff had paid only Rs 500 to Defendant 2 as sale consideration
and the remaining amount of Rs 4500 which was shown to have
been paid before the execution of the deed was, in fact, not paid,
the sale deed would not, for that reason, become invalid on account
of the provisions contained in Section 54 of the Transfer of
Property Act, 1882 which provide as under:
“54. ‘Sale’ is a transfer of ownership in exchange for a price paid
or promised or part-paid and part-promised.
Such transfer, in the case of tangible immovable property of the
value of one hundred rupees and upwards, or in the case of a
reversion or other intangible thing, can be made only by a
registered instrument.
In the case of tangible immovable property, of a value less than
one hundred rupees, such transfer may be made either by a
registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the
seller places the buyer, or such person as he directs, in possession
of the property.
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A contract for the sale of immovable property is a contract that a
sale of such property shall take place on terms settled between the
parties.
It does not, of itself, create any interest in or charge on such
property.”
36. The definition indicates that in order to constitute a sale, there
must be a transfer of ownership from one person to another, i.e.,
transfer of all rights and interests in the properties which are
possessed by that person are transferred by him to another person.
The transferor cannot retain any part of his interest or right in that
property or else it would not be a sale. The definition further says
that the transfer of ownership has to be for a “price paid or
promised or part-paid and part-promised”. Price thus constitutes an
essential ingredient of the transaction of sale. The words “price
paid or promised or part-paid and part-promised” indicate that
actual payment of the whole of the price at the time of the
execution of sale deed is not a sine qua non to the completion of
the sale. Even if the whole of the price is not paid but the document
is executed and thereafter registered, if the property is of the value
of more than Rs 100, the sale would be complete.
37. There is a catena of decisions of various High Courts in which
it has been held that even if the whole of the price is not paid, the
transaction of sale will take effect and the title would pass under
that transaction. To cite only a few, in Gayatri Prasad v. Board of
Revenue it was held that non-payment of a portion of the sale price
would not affect validity of sale. It was observed that part-payment
of consideration by the vendee itself proved the intention to pay the
remaining amount of the sale price. To the same effect is the
decision of the Madhya Pradesh High Court in Sukaloo v. Punau.
38. The real test is the intention of the parties. In order to constitute
a “sale”, the parties must intend to transfer the ownership of the
property and they must also intend that the price would be paid
either in praesenti or in future. The intention is to be gathered from
the recital in the sale deed, the conduct of the parties and the
evidence on record.
15. Thus, if the facts and circumstances of the case are considered, then it
is clear that the intention of the defendant/respondent was not to pay the price
either in praesenti or in future. The cheque was given by way of
consideration amount, which never got encashed.
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16. Similarly, the Trial Court has relied upon the judgment passed by this
Court in the case of Prem Narayan Vs. Kunwarji reported in AIR 1993
MP 162, however, the facts of the said case are completely different. If the
facts of the present case are considered, it is clear that payment of
consideration amount was made a condition precedent, therefore, there is a
specific mention in the sale deed, Ex. P.1 regarding payment of
consideration amount through cheque and the cheque never got encashed.
17. Thus, in the considered opinion of this Court, the Trial Court
committed a material illegality by dismissing the suit on the ground that non-
payment of consideration amount cannot be a ground to declare a sale deed
as null and void.
18. Thus, it is held that since, the respondent/defendant namely Mohan
Vishwakarma played a fraud on the appellant and never intended to pay the
price of the land, therefore, the sale deed executed on 18-2-2008, Ex. P.1 is a
null and void document.
19. Since, the possession was delivered to the respondent/Mohan
Vishwakarma in the light of Sale deed dated 18-2-2008, Ex. P.1, and since,
the said sale deed has been declared as null and void, therefore, it is held that
the appellant is entitled for possession of the said land.
20. It is submitted by Counsel for the respondent no.2 that now he has
purchased the property from the L.R.s of defendant Mohan Vishwakarma.
Since, the sale deed was executed during the pendency of civil litigation,
therefore, provisions of Section 52 of Transfer Of Property Act would apply
with full force, accordingly it is held that the respondent no.3 after having
stepped into the shoes of the respondent no.1 and 2, cannot maintain his
possession over the land in dispute. The respondent no.3 is bound by the
decree which is being passed against the respondents no. 1 and 2. Since, he
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has purchased the property from the respondent no.1 and 2, therefore, he
shall be free to recover the damages from respondents no. 1 and 2.
21. Ex Consequenti, the Judgment and Decree dated 22-9-2010 passed by
3rd Additional District Judge, Vidisha in Civil Suit No. 18-A/2010 is hereby
set aside.
22. The appeal is allowed and suit filed by Appellant is hereby decreed.
The Sale deed dated 18-2-2008, Ex. P.1 is hereby declared as null and void
and it is directed that respondents no. 1 to 3 shall handover the vacant
possession of the property to appellant failing which the appellant shall be
entitled to recover possession by getting the decree executed.
23. No order as to costs.
24. A decree be drawn accordingly.
(G.S.Ahluwalia)
Judge
Signature Not Verified
Signed by: ANAND
SHRIVASTAVA
Signing time: 12/6/2024
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