1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR Civil Application No. 522 of 2010 IN First Appeal No. 63 of 2010 M/s. Derolion Solvent Product Ltd., through Managing Director, Shri Satyanarayan Sharma, aged about 45 years, a Company incorporated under the Companies Act, 1956, having its registered office at village Pendari, Tah. Takhatpur, Distt. Bilaspur [C.G.]. .... Appellant. Versus M/s. Mahajan Brothers, a Partnership Firm, registered under the Indian Partnership Act, 1932, through its partners Shri Madhav Rao son of Govind Rao Mahajan, aged 71 years, having its placeof business at Anaj Bazar, Itwari, Nagpur. .... Respondent. 2 ***** Mr. Bansal, Adv., under instructions from Mr. P.S. Tiwari, Adv., for the appellant. Mr. S.D. Khati, Adv., for respondent sole. ***** CORAM : A.H. JOSHI AND P.B. VARALE, JJ. Date : 9th March, 2010. ORAL ORDER : 1. Today, this Court has admitted the appeal against decree dismissing Special Civil Suit No. 118 of 2006. Civil Application for relief of injunction restraining the defendant  the plaintiff in Special Civil Suit No. 717 of 1995 from executing the decree, is listed for hearing. 2. Rule. 3. Learned Adv. Mr. S.D. Khati waives service for caveator-respondent. 4. Heard by consent. 3 5. Learned Adv., for the appellant has advanced as grounds for stay following points:- [a] Plaintiff's case was that the decree dated 12th June, 1996 passed in Special Civil Suit No.717 of 1995 by Seventh Joint Civil Judge [Senior Division], Nagpur, was obtained by plaintiff  present respondent by playing fraud on the Court. [b] Fraud vitiates everything and hence the decree passed in Special Civil Suit No. 717 of 1995 is void. Therefore, plaintiff's suit 118 of 2006 was liable to be decreed, yet is wrongly dismissed and hence appeal is filed which is admitted. [c] As the appeal is admitted and plaintiff is entitled to the protection of its interest, in order to conserve the status quo. [d] During pendency of suit, a similar request of injunction against the execution of decree sought to be annulled was granted and interim relief in favour of the plaintiff  present appellant was maintained upto this Court. [e] Plaintiff-appellant shall suffer 4 irreparable loss and injury, if interim relief is not granted. 6. On facts, it is urged by applicant as regards the fraud played on the Court as follows:- (1) The Plaintiff-Company had dealt with a Partnership Firm  M/s. Mahajan Brothers, of which one Shri Vivek Mahajan was a major partner. (2) Admittedly, Shri Vivek Mahajan has no nexus with the decree holder - Firm  M/s. Mahajan Brothers. Therefore, the Firm with whom the plaintiff-Company had a dealing is not the Firm who was plaintiff in Special Civil Suit No. 717 of 1995. (3) The person [Firm], who has no privy or a contractual relationship, has secured a decree in Special Civil Suit No. 717 of 1995, which is, therefore, null and void due to said act of fraud on the Court. 7. The application has been opposed by making oral submissions and by relying on the judgment and decree impugned and record of Special Civil Suit No. 118 of 2006 and that of Special Civil Suit No. 717 of 5 1995. 8. The objection to the prayer for interim injunction can be summarized as follows:- (a) On bare reading of the plaint in Special Civil Suit No. 118 of 2006 and considering the tenor of the plaint, it was rather liable to be rejected under Order-VII, Rule 11 of Civil Procedure Code, since on the showing by plaintiff, the suit was beyond limitation and the essential ingredients of pleading of 'fraud' were absent in the plaint. (b) Even accepting the plaintiff's oral evidence on affidavit to be gospel truth, the plaintiff has failed even to barely describe or narrate fraud on the Court. (c) The party pleading fraud ought to prove it strictly. A bare tell-tale style of evidence is not adequate to cope up the need of strict proof of facts, if any, pleaded. (d) Fraud on Court was, thus, neither properly pleaded or proved. (e) This being the background, applicant has failed to make out a case for 6 grant of any interim order, whatsoever. 9. Therefore, this Court will have to ascertain:- [a] What is the exact pleading as to fact constituting fraud on the Court, in the facts and circumstances at hand? [b] Whether the plaintiff has made out a prima facie strong case that the decree was secured by playing fraud on the Court? [c] If facts and evidence demonstrate fraud on Court , should the execution of decree in Special Civil Suit No. 717 of 1995 be restrained? 10. The decree passed in Special Civil Suit No. 717 of 1995, which has attained finality, as the judgment debtor has failed to assail it in appeal or get it set aside in the proceedings under Rule 13 of Order-IX, Civil Procedure Code. This Court would not get prejudiced due to the fact that the appellant has failed in suit, and would scrutinize the merits of prayer for injunction, being 7 an Appellate Court independently and de novo. ANALYSIS OF PLEADINGS, EVIDENCE AND SUBMISSIONS AS TO FRAUD AND REASONS. 11. In order to appreciate the pleadings, and documentary evidence on record, this Court has directly perused the plaint in Special Civil Suit No. 118 of 2006. 12. The pleadings as to fraud are seen in Paras 2, 9 and 10 of the plaint, copy whereof is seen at page 85 as Annexure-II. Relevant averments are quoted below for ready reference:- 2. ................................... .........It would not be out of place to mention here that the defendant has obtained a decree in his favour by suppressing the material facts before the Court of 7th Joint Civil Judge Sr. Dn., Nagpur. The decree was obtained in a fraudulent manner by a person who never had any interaction with the plaintiff Company. 9. ................................... ..........It would not be out of place to mention here that the plaintiff company has never entered into an agreement with the defendant company for the supply of Soyabean. When the plaintiff company has never entered into an agreement with the defendant then the question of supply of 8 Soyabean does not arise. It is categorically stated that the plaintiff company has never made any transaction with any of the partners of the defendant company. 10. ................................... .........On the contrary Mr. Vivek Mahajan was appointed as a commission agent in a capacity of a major partner in a firm known as M/s. Mahajan Brothers. The aforesaid facts and circumstances patently make evident that neither Mr. Vivek Mahajan nor Mr. Govind Narayan Mahajan is a partner of the defendant firm. Therefore, by misleading the learned 7 th Joint Civil Judge Senior Division, Nagpur, the defendant firm has obtained decree in their favour. [Quoted from page nos. 86, 90 and 91 of the First Appeal paper-book. Emphasis is supplied to highlight the relevant sentences]. 13. In so far as the aspect of limitation is concerned, the pleadings are seen admixed in relation to accrual of cause of action and statement in the plaint about limitation. These averments are seen in para 12 at two places, which read as follows:- 12. That, on 15-11-05 and 10-12-05 cause of action arose when the plaintiff company came to know about the fraud played by the defendant firm when the documents pertaining to the transaction made with Mr. Vivek Mahajan were examined by the present lawyer. The plaintiff company was amazed to see that the defendant firm has misrepresented material fact from the court of 7th Joint Civil Judge, Sr. Dn., Nagpur and by playing fraud on Court has obtained 9 the ex parte decree. As a result of ex parte decree the execution proceedings were initiated against the plaintiff company. ................... .................................. ..........The recently plaintiff company subsequently succeeded to gather certain information from the relevant documents and came to the conclusion that fraud has been played even with the learned 7th Joint Civil Judge Sr. Dn., Nagpur.......... [Quoted from page nos. 91 and 92 of the First Appeal paper-book. Sub-paragraphing is done for convenience while reading. Emphasis is supplied to highlight the relevant sentences]. 14. In the Written Statement, the defendant has dealt with the pleadings as regards fraud in paras 9,14,15 and 16 of the Written Statement which read as under:- 9. As to Para 2 : Filing of execution proceedings is a matter of record, but it is specifically denied that defendant has obtained a decree passed by suppressing material facts before the Court of 7th Joint Civil Judge, Senior Division, Nagpur. It is specifically denied that decree was obtained in a fraudulent manner by a person who never had any interaction with the plaintiff company. 14. As to Para 9 : Filing of suit is a matter of record, needs no reply. It is denied that defendant deliberately suppressed the material facts and false averments made before the 7th Joint Civil Judge, Senior Division, Nagpur. It is not disputed that there was an agreement 10 between plaintiff and defendant for supply of Soyabin and plaintiff company owes an amount to the defendant for supply of Soyabin. It is specifically denied that plaintiff company has never entered into an agreement with the defendant for supply of Soyabin. It is specifically denied that plaintiff company has never made any transactions with any of the partner of defendant firm. 15. At this juncture, the defendant submits that on 10.05.1994, the plaintiff company has written a letter regarding supply of Soyabean seed for coming new season. This letter was replied by the defendant on 17.5.1994. On 4.10.1994, the plaintiff has also written a letter wherein they have accepted the appointment as commission agent for the year 1994-95 with the terms and conditions mentioned therein. The said letter was replied by the defendant on 15.10.1994 and terms and conditions were also mentioned in the letter. On 25.10.1994 the plaintiff Company have confirmed an acceptance to terms and conditions towards appointment as commission agent and defendant firm was appointed as a Commission agent in the year 1994-95. After the said contract which took place between plaintiff and defendant, all the material was sent by various transporters from time to time and all the lorry receipts, bills would demonstrate that Soyabean were sent by defendant firm to the plaintiff company and in all lorry receipts, defendant has been shown as a consignor and plaintiff company as a consignee. Not only this, but the plaintiff company has also made payments towards supply of Soyabin from time to time and said payments were made only by Demand Draft which were sent to the defendant firm along with covering letters. On perusing the said covering letters sent by plaintiff company to the defendants along with Demand 11 Draft will demonstrate that payment has been made by the defendant for the supply of Soyabin and all these letters have been already placed on record in Special Civil Suit No. 717 of 1995. Therefore, where is the question arises that plaintiff company has never made any transaction with any of the partner of defendant firm. The suit is absolutely false, frivolous and is liable to be dismissed with heavy cost. 16. As to Para 10 : It is specifically denied that plaintiff company has made any correspondence with Mr. Govindnarayan Mahajan and never entered into an agreement with Mr. Govindnarayan Mahajan. It is specifically denied that Mr. Vivek Mahajan was appointed as commission agent in the capacity of major partner in the firm as M/s. Mahajan Brothers. It is denied that Mr. Vivek Mahajan nor Mr. Govindnarayan Mahajan is a partner of defendant firm. It is specifically denied that by misleading the learned 7th Joint Civil Judge, Senior Division, Nagpur and playing fraud with the Court, the defendant firm has obtained decree in their favour. It is specifically denied that there is no person by name Mr. Govindnarayan Mahajan, but it is a partnership firm M/s. Govindnarayan Mahajan which is also sister concern of partner of defendant firm. [Quoted from page nos. 100, and 102 to 106 of the First Appeal paper-book. Emphasis is supplied to highlight relevant sentences]. 15. This Court has scrutinized the documents on record in Special Civil Suit No. 717 of 1995, which are now part of record of present defendant's Special Civil 12 Suit No. 118 of 2006. No other documents are proved by the applicant. 16. It is seen from the documents filed by plaintiff in Special Civil Suit No. 717 of 1995 for proving the sale transaction, transport receipts, copies of Demand Bills, Statement of Accounts of the sale and delivery effected by said plaintiff [present defendant] that M/s. Mahajan Brothers, the said Plaintiff Firm, was having Sales Tax Registration under State and Central Sales Tax, Grain Merchant's license, license of trading in pulses, oil seeds etc., and all these particulars are reflected from various documents. 17. It is seen that in the Civil Suit No. 118 of 2006, one of the Directors of the plaintiff Mr. Sushil Agrawal has tendered affidavit of examination-in-chief [Exh.60]. He has then entered the witness box to affirm his evidence [Exh.60], and he was cross-examined. 18. The story, that is couched, is that the transaction entered by Plaintiff-Company was with the Firm  M/s. Mahajan Brothers having Vivek Mahajan as 13 its partner and not with M/s. Mahajan Brothers, the plaintiff in Special Civil Suit No. 717 of 1995. The sale and delivery of Soyabean through transport receipt by Mahajan Brothers and payment made by present plaintiff, which is duly accounted by cheque / Demand Draft drawn in the name of Mahajan Brothers shown and proved through documents brought on record in Special Civil Suit No. 717 of 1995 is not denied or explained in the evidence [Exh.60]. 19. In the background that the present appellant has asserted that it had no privity with the plaintiff, in Special Civil Suit No. 717 of 1995, it was incumbent on the part of plaintiff-Company - present appellant's witness to comment / deny the transaction which was foundation of decree passed in Special Civil Suit No. 717 of 1995 by way of disputing those. Nothing of this sort, even bare denial thereof, is done by the present appellant. 20. Had applicant / plaintiff to demonstrate distinctness of identity of two Firms having same name, the plaintiff was required to bring best evidence in 14 its possession to show that the person [Firm] with whom it had dealings was a person of specified description identifiable through its various trading licenses, registration etc., which were same amongst many features of identity. Nothing of this sort has been done by plaintiff  present applicant. 21. Learned Adv., for the appellant has taken the Court through documents. Unfortunately, for the applicant, the documents, which learned Adv. Mr. Bansal is referring, are not proved or treated as proved. These documents are not marked with exhibits. Moreover, these documents cannot be read in disjuncture with various other documents on record in Special Civil Suit No. 717 of 1995, which prove the nexus and privity. In this situation, submissions as to fraud on the Court are rendered in vacuum. 22. The evidence on affidavit prima facie is based on castle of imagination on the straws found out from the Written Statement. Stories espoused in the plaint and examination-in-chief on affidavit do not find any relevance, whatsoever. 15 23. Pleadings quoted herein before are blissfully vague as to vital needs of pleading in relation to fraud. Nothing worth cognizance is pleaded, except saying as averred in para 2 of the plaint that the decree is sought by Mahajan Brothers with whom applicant never had any interaction. 24. For any promise as connoted by Indian Contract Act, there is an offer, its acceptance emerging into promise and then a concluded contract. Moreover, lack of interaction by itself does not constitute adequate pleading of absence of privity of contract. Lack of interaction as pleaded by appellant is a matter of evidence. 25. The story of fraud as couched in the plaint and sought to be painted in the oral evidence and sought to be further decorated in further oral submissions is nothing but gimmick of a fertile brain of well equipped legal assistance. 26. Learned Adv., for the appellant has placed 16 reliance on reported judgment of Hon'ble Supreme Court in case of T. Vijendradas & another Vs. M. Subramanian & ors. [AIR 2008 SC 563] to substantiate his contention. 27. We have gone through the Judgment with utmost care. The proposition that fraud vitiates all actions is as clear as broad daylight. However, unless plaintiff proves fraud, he cannot keep on clapping and clamouring that there being a fraud allegedly proved, the protection as sought by the plaintiff must be granted. PLEADINGS AS TO LIMITATION AND REASONS 28. Another facet of the case is limitation. 29. The plaintiff has shown the accrual of cause of action in the plaint. Pleading does not disclose that there is any specific date of accrual of cause of action with reference to the date and event of discovery of fraud. What is alleged is that present Advocate of the plaintiff , meaning thereby that 17 probably one, who drafted the plaint, has discovered the fraud. A specific instance as to how the fraud was discovered on a particular date, so as to show that the suit was within limitation from the date of such discovery is not disclosed. 30. Admittedly, it is a matter of record that the plaintiff-appellant did not leave any stone unturned, such as filing objection, filing a fresh suit in the Court at Bilaspur, filing an application for setting aside ex parte decree etc., to forestall the execution of decree. All these steps were taken by applicant- plaintiff no sooner the execution was commenced at Bilaspur. Notwithstanding all these remedies which applicant / plaintiff had availed, had there been a specific incident due to which fraud was discovered, it could and should have been pleaded. This aspect being totally absent in the plaint, even on showing by the plaintiff-appellant, the suit is barred by limitation. C O N C L U S I O N 31. Entire story of fraud by the plaintiff on 18 Court while getting Special Civil Suit No. 717 of 1995 decreed, as alleged by present appellant, appears to have boomranged and the conduct of the appellant smacks of fraud by the appellant-Company on all concerned in the form of present suit, of which the present appeal is continuation. 32. The applicant is not entitled to the interim relief just because relief was granted and was in operation during pendency of suit. At that time, what appeared prima facie was the foundation. Now, entire fog has been cleared. Hollowness of plaintiff's story has surfaced. Relief to be granted when the plea of fraud was still to be enquired and to be granted when fraud is held not proved stands on totally different plane. Even it is not shown that in all probabilities, the appeal stands a good chance of success. On the contrary, what appears prima facie as is discussed herein before is not favourable to the plaintiff. 33. In the circumstances, the application has no merit, and deserves to be, and is hereby rejected. 19 34. Normally, in such interlocutory application, so much of the exertion and long order would not be required. One may also feel that the whole merit of the case has been discussed and has been adjudicated. Considering the long duration of submissions done by the learned Adv., for the appellant and considering his exertion to make it sure that the Court understands the matter properly, he took the Court through entire record, and having seen the records failing to refer to those, would render the judgment based on guess work than on record. The mind of the Court has to be expressed through the speaking order. Hence, this Court was required to go into a little longer narration. 35. Observations in this order are liable to be regarded as what appeared to this Court prima facie at the stage of hearing the application for interim relief, and would, in no manner, influence the merit of the case at final hearing stage. 36. It is further clarified that appellant is free to furnish a private paper-book expeditiously and move 20 for early hearing. 37. Costs in cause. JUDGE JUDGE -0-0-0-0- |hedau|