1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 31 OF 2005 Vimal Vitthal Chavan, ] Residing at R.B. Mane Chawl No. 5/C, ] Room No. 3, Devipada, Borivali (East), ] Mumbai 400 066 ] … Petitioner Versus 1.Nava Maharashtra Education Society, ] a Trust ] ] 2.K.G.T. High School ] ] Nos. 1 & 2 having address at Pandurang ] Budhkar Marg, Bombay 400 013 ] 3. State of Maharashtra ] (Through the Deputy Director of ] Education, Jawahar Bal Bhavan, ] Charni Road, Bombay 400004) ] … Respondents Mr. Santosh Shetty for the Petitioner Mrs. Anjali Helekar for Respondents No. 1 and 2 Mr. L.T. Satelkar, Assistant Government Pleader, for Respondent No. 3. 2 CORAM: DALVEER BHANDARI, C.J., & S. J. VAZIFDAR, J. DATE : AUGUST 8, 2005. ORAL JUDGMENT (Per Dalveer Bhandari, C.J.):- 1. The petitioner's husband, Vitthal Ramkrishna Chavan, while working as a Head Clerk with the K.G.T. High School, respondent No.2, died in 1998 due to drowning at the native place. According to the petitioner, she is getting family pension of Rs. 3,000/- from respondent No.3. It is also incorporated in the petition that the petitioner has two sons. Her elder son has been recently employed in a private factory drawing a salary of Rs.2,000/- and the younger son, of 18 years of age, is unemployed. 2. The petitioner applied for employment on compassionate ground. In response to the petitioner's request, respondent No.2 offered employment to the petitioner on compassionate ground in Class IV (Peon) and the petitioner signed the acceptance letter and accepted employment of Class IV employee offered to 3 her. It may be appropriate to mention that in the appointment letter, which was sent to her on 6th February, 1999, she mentioned that she is accepting the post offered to her in Class IV without prejudice to her right on the post of Class III. It may also be pertinent to mention that despite number of reminders from respondent No. 2, the petitioner did not join service. 3. The relevant portion of the reminder letter reads as under: "You were informed that the school has appointed you on the compassionate ground as Class IV employee. After that you were also sent two reminders by RPAD but since you have not taken any action in this respect, it seems that you are not in need of a job, therefore as a last chance, you are being informed to join the duties. Therefore, in case you do not report and join the duties within a period of seven days from the receipt of this letter, the school will not be bound to offer you employment, which please note.” 4 Even despite this reminder from the Principal, the petitioner did not join the service. 4. In this petition, the petitioner has deliberately suppressed the material facts and incorporated totally incorrect and false facts that she joined as a Junior Clerk with respondent No. 2 with effect from 6th January, 2004. In fact, the petitioner never joined as a Junior Clerk with respondent No. 2. 5. In support of her contention, the petitioner has relied on Exhibit 'B', Appointment Order dated 6th February, 1999. Translation of this appointment order is at page 37 of the petition, which clearly mentioned that she was appointed on compassionate ground on the vacant post of Class IV employee (Peon) in the school from 8th February, 1999 in the pay scale of Rs.750-940 at the monthly salary of Rs.750/-. It was also mentioned that she would also be entitled to LTA, HRA and DA as granted by the Government from time to time. 5 Unfortunately, the petitioner has twisted the facts and in paragraph 5 of the petition, she deliberately tried to mislead the Court that in fact, she was appointed as a Junior Clerk in the second respondent- school with effect from 6th January, 2004; and in support of that contention, she has annexed Exhibit 'B', whereas this letter clearly indicates that she was employed on compassionate ground on a vacant post of Class IV employee. Relevant portion of this Appointment Order dated 6th February, 1999, Exhibit 'B' to the reply- affidavit, reads as under: “ With reference to your application dated 10.07.1998 and your letter of acceptance dated 06.02.1999 for the post of Class IV employee (Peon), you are hereby informed that pursuant to the Government Resolution, General Administration Department No. Compassionate / 1084/189/CR/155/ 13A dated 08.03.1985, as your late husband expired while in service, you are appointed on compassionate ground on the vacant post of Class IV employee (Peon) in the School from 08.02.1999 in the scale of Rs.750- 940 at the monthly salary of Rs.750/-. You will be 6 entitled for LTA, HRA & DA as granted by the Government from time to time.” A letter was sent by the petitioner on 6th February, 1999 to the Secretary and Principal of “the Maharashtra Education Society, Kamaladevi Govindram Tahilyani High School”, and the same is reproduced as under:- “ 1. Hon. Secretary, 2. Hon. Principal. Maharashtra Education Society, Kamaladevi Govindram Tahilyani High School Bombay 400 013 In acknowledgment of your letter, I am accepting the post offered by you without prejudice to my right on the post of Clerk. Yours faithfully, Sd/- Vimal C. Chavan. Date: 6.2.1999.” 6. The learned counsel appearing for the respondents asserted that the petitioner has deliberately suppressed the entire correspondence between the parties from the Court. The learned Counsel appearing for the Management also submitted 7 that still the School is prepared to accommodate her as a Class IV employee on compassionate ground. 7. A comprehensive reply has been filed by Chandrakant S. Chavan, Secretary of respondent No.1, Nava Maharashtra Education Society, the Trust. It is also mentioned in the reply that one Vijay Kashinath Gadekar was appointed as a Class IV employee on 2nd February, 1998. One Vitthal Chavan, who was a Senior Clerk, expired on 27 th May, 1998, a post fell vacant and Vijay Gadekar was qualified to be appointed as a clerk since there was no other Class IV employee who was qualified for the post of clerk. It is also mentioned that Vijay Gadekar was very efficient and therefore, he was promoted on 18 th August, 1998. The petitioner had applied on compassionate ground by her application dated 10 th July, 1998 but at that time, she had no work experience. Considering the job responsibilities of the clerk, which are to be handled by an efficient and experienced person, and considering that the petitioner was not suitable to be appointed in the post 8 of Clerk, she was not appointed as clerk but respondent No.1- Society decided to appoint her in Class IV, as indicated above. In the affidavit, it is mentioned that the petitioner accepted the appointment in Class IV and despite five reminders of the school, she did not join. In the affidavit, it is also mentioned that after Vijay Gadekar was promoted to the post of clerk, there was no vacancy in Class III in the school where the petitioner could be accommodated. 8. The learned counsel for the respondents submitted that this petition deserves to be dismissed with exemplary costs because the petitioner has deliberately suppressed the material facts from the Court and has not approached the Court with clean hands. It is submitted that the petitioner has deliberately suppressed and concealed following vital facts and introduced false facts to mislead the Court:- 9 (1)That respondent No. 2 offered the petitioner employment on compassionate ground on the post of Class IV, which she accepted without prejudice to her right to be appointed in Class III. (2) That reminders have been sent to the petitioner by respondent No. 2, asking her to join duty as a Class IV employee of the school. (3) That Vijay Gadekar was promoted to the post of Clerk and there was no vacancy in Class III position in respondent No. 2-school. 9. In Concise Oxford Dictionary, ‘fraud’ 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. 10 10. 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. 11. ‘Fraud', according to Black' s Law Dictionary, Sixth Edition, is 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 to 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. Anything calculated to deceive, whether by a single act or combination, or by suppression of truth, or suggestion of what is false, whether it be by direct falsehood or innuendo, by speech or silence, word of 11 mouth, or look or gesture. Bad faith and fraud are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc. 12. 'Fraud' has also been defined under Section 17 of the Indian Contract Act, 1872, which reads as under:- 'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:- (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; 12 (5)any such act or omission as the law specially declares to be fraudulent.” 13. “ Fraudulent concealment” is defined as the hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose. The test whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties; failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual “fraudulent concealment”. Fraudulent concealment justifying a rescission of a contract is the intentional concealment of some fact known to the party charged, which is material for the party injured to know to prevent being defrauded; the concealment of a fact which one is bound to disclose being the equivalent of an indirect representation that such fact does not exist. 13 14. “ Fraudulent misrepresentation” is defined to mean a false statement as to material fact, made with intent that another rely thereon, which is believed by other party and on which he relies and by which he is induced to act and does act to his injury, and statement is fraudulent if speaker knows statement to be false or if it is made with utter disregard of its truth or falsity. 15. According to the Law Lexicon, Second Edition (2001), the Latin Maxim “ Suppressio veri, suggestio falsi” defines that the suppression of the truth is equivalent to the suggestion of falsehood. The suppression or failure to disclose what one party is bound to disclose to another, may amount to fraud. 16. The maxim that one who comes to Court must come with “clean hands” is based on conscience and good faith. The maxim is confined to misconduct in regard to, or at all events connected with, the matter in 14 litigation. “Clean hands” means a clean record with respect to the transaction with the defendant, and not with respect to any third person. 17. “ Clean hands doctrine” means that equity will not grant relief to a party, who, as actor, seeks to set judicial machinery in motion and obtain some remedy, if such party in prior conduct has violated conscience or good faith or other equitable principle. One seeking equitable relief cannot take advantage of one's own wrong. 18. The learned counsel for the respondents submitted that according to the settled legal position, which has been crystallised by a series of judgments of various Courts, one, who is guilty of deliberately suppressing the material facts from the Court, is not entitled to any relief. In support of their contention, reliance has been placed on number of judgments delivered by various Courts. 15 19. In S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs & Ors. [(1994) 1 SCC 1], the Court observed that “…The Courts of law are meant for imparting justice between the parties. One, who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the Court is being abused. Property- grabbers, tax-evaders, bank-loan dodgers and other unscrupulous persons from all walks of life find the court- process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of litigation… A fraud is an act of deliberate deception with the design of securing something by taking advantage of another. It is a deception in order to gain by another’s loss. It is a cheating intended to get an advantage… A litigant, who approaches the Court, is bound to produce all the documents executed by him, 16 which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the Court as well as on the opposite party.” 20. In a well-known case, Chittaranjan Das v. Durgapore Project Limited & Ors. (99 CWN 897), the Court observed that “Suppression of a material document which affects the condition of service of the petitioner, would amount to fraud in such matters. Even the principles of natural justice are not required to be complied with in such a situation. It is now well known that a fraud vitiates all solemn acts.” 21. Reliance was also placed on a Division Bench judgment of Delhi High Court in Jeevan Kumar & Anr. v. Union of India [2002 VII AD (Delhi) 100] , wherein the Court held that those who seek equity must approach the Court with clean hands. 17 22. In Rajabhai Abdul Rehman Munshi v. Vasudev Dhanjibhai Modi reported as 1964 (3) SCR 480, Their Lordships of the Supreme Court observed that a party who approaches the Court knowing or having reason to believe that if the true facts were brought to its notice, the Court would not grant special leave, and persuades the Court to grant leave to appeal is guilty of conduct, forfeiting all claims to the exercise of discretion in his favour. It is his duty to state facts which may reasonably have a bearing on the exercise of the discretionary powers of this Court. Any attempt to withhold material information would result in revocation of the order obtained from the Court. 23. In Har Narain v. Badri Das reported as AIR 1963 SC 1558, Their Lordships of the Supreme Court observed that it is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading. 18 The special leave granted by the Supreme Court in this case was revoked and the appeal was, without dealing with the merits of the case, dismissed with costs. 24. In Asiatic Engineering Co. v. Achhru Ram, AIR 1951 Allahabad 746 (Full Bench), the Court observed that no relief can be granted in a writ petition which is based on misstatement or suppression of material facts. The Court observed in paragraph 51, page 767 – “In our opinion, the salutary principle laid down in the cases .. should appropriately be applied by Courts in our country when parties seek the aid of the extraordinary powers granted to the Court under Art. 226 of the Constitution. A person obtaining an ex parte order or a rule nisi by means of a petition for exercise of the extraordinary powers under Art. 226 of the Constitution must come with clean hands, must not suppress any relevant facts from the Court, must refrain from making misleading statements and from giving incorrect information to the Court. Courts, for their own protection, should insist that persons invoking 19 these extraordinary powers should not attempt, in any manner, to misuse this valuable right by obtaining ex parte orders by suppression, misrepresentation or misstatement of facts.” 25. In Udai Chand v . Shankar Lal & Ors. (1978) 2 SCC 209, the Court revoked the special leave petition and vacated the stay order. The Court, while following the ratio of the aforementioned cases, observed that the Supreme Court would be justified in revoking the leave to appeal if the same was obtained by making misstatement of a material fact. Special leave already granted was revoked and consequently, appeal was dismissed with costs. This principle has been consistently followed in a number of other cases by various Courts. 26. Reliance was placed on New India Steel Industries v. V.D. Steel Industries & Anr. reported as (1981) 2 SCC 16. The Court observed: 20 “ After hearing counsel for the parties we allow CMP 6495 of 1980 for the revocation of special leave petition granted as per this Court’s order dated December 12, 1979. There are two facts which stand out. Firstly, the appellant had made a misstatement of material fact that the proclamation of sale did not contain any note that the property was being sold subject to the mortgage charge of Rs.1,65,000/- . In fact, such a note does exist. Secondly, he misconducted himself inasmuch as he published a public notice captioned as ‘Court Notice’ on April 12, 1980, as if that notice was being published under the orders of this Court. For these two reasons we revoke the special leave petition granted earlier and dismiss the appeal arising out of that SLP. The stay already granted automatically stands vacated.” 27. On the overall conduct of the parties, reliance was also placed on the Supreme Court judgment in Ram Chandra Singh v. Savitri Devi [2003 (8) Scale 505]. In this case, a very important principle of law has been crystallised when the Apex Court observed that fraud, 21 as is well known, vitiates every solemn act. Fraud and justice never dwell together. 28. The Delhi High Court in Dr. Manmonhan Singh Dhaliwal v. Gurbax Singh Arora & Ors. reported as 94 (2001) DLT 820 observed that the main function of the Court is to administer justice. Judgment or order procured by playing fraud upon the Court cannot be rammed down the throat of the aggrieved party. Justice and fraud are aliens to each other. Fraud pollutes the sanctity and solemnity of the judicial proceedings. This is why the Courts have inherent powers to recall or set aside such a judgment or order. 29. In Indian Bank v. Satyam Fibres (India) Pvt. Ltd. JT 1996 (7) SC 135, the Apex Court observed that “since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court, it also amounts to an abuse of the process of the Court, that the Courts have inherent power to set aside an order obtained by 22 practising fraud upon the Court, and that where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order.” The Court further observed that “The judiciary in India also possesses inherent power, specially under Section 151 CPC, to recall its judgment or order if it is obtained by fraud on Court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected party to file a separate suit for setting aside the decree obtained by fraud. Inherent powers are powers, which are resident in all Courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the constitution of the tribunals or Courts themselves so as to enable them to maintain their dignity, secure obedience to their process and rules, protect their officers from indignity and wrong and to punish unseemly behaviour. These powers are necessary for the orderly administration of the Courts’ business.” 23 30. In Shrisht Dhawan v. M/s. Shaw Brothers, (1992) 1 SCC 534, while dealing with a landlord- tenant matter, the Court observed as under:- “ Neither of them (the landlord and the tenant) can take advantage of his own deceit or breach. No sanction of the statutory authority procured by fraud can protect the guilty or harm the innocent.” 31. In the case of Gowrishankar v. Joshi Amba Shankar Family Trust, JT 1996 (2) SC 560, the Court observed that suppression of a material document would also amount to a fraud on the Court. 32. In Nachhittar Singh vs. The State of Punjab (AIR 1975 SC 118), the Apex Court came to the conclusion that it is wrong to think that judgments in rem are inviolable. Fraud, in any case bearing the jurisdictional facts, vitiates all judicial acts, whether in rem or in personam. 24 33. In a recent case, Bhaurao Dagdu Paralkar v. State of Maharashtra & Ors., JT 2005 (7) SC 530, while dealing with the principle of fraud, the Apex Court has laid down in paragraph 12:- “ '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 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 an 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 25 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.” The Court further observed:- “ 'Fraud' and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct.” 34. A Division Bench of the Madras High Court has, in Venkatappa V. Subba, 29 Mad. 179, taken a similar view and ruled that a suit lies to set aside a judgment on the ground that the defendant had obtained it by fraud in that he had committed deliberate perjury and suppressed evidence. The learned Judges (Badham and Moore, JJ.) there declared that the law in England has been authoritatively and finally laid down in