Case: MY PALACE MUTUALLY AIDED CO-OPERATIVE SOCIETY Vs. B. MAHESH  &amp; ORS

recalling the said order, or by passing any other appropriate order. However, inherent powers cannot be used in conflict of any other existing provision, or in case a remedy has been provided for by any other provision of CPC. Moreover, in the event that a fraud has been played upon a party, the same may not be a case where inherent powers can be exercised. (emphasis supplied) 34. The High Court, relying upon the above judgments of this Court which recognizes the power to recall, seems to have lost sight of the restrictions imposed while exercising jurisdiction under Section 151 of the CPC, which were elaborately discussed by this Court in the above referred judgment about exercising of the power under Section 151 of the CPC being only in circumstances where alternate remedies do not exist. 35. Therefore, we are of the firm opinion that recalling a final decree in such circumstances cannot be countenanced under Section 151 of the CPC. The High Court erred in exercising its jurisdiction under Section 151 of the CPC, to hear and pass a detailed judgment recalling its earlier final decree dated 19.09.2013, rather than directing the respondents to pursue the effective alternate remedies under law. Having said the above, we must clarify that we are not, in any way, doubting the proposition of law that fraud nullifies all proceedings, or that the Court has power to recall an order which was passed due to a fraud played on the Court. However, while exercising the power under Section 151 CPC for setting aside the final judgment and decree, the Division Bench should have taken into consideration the restriction which was observed by this Court in the captioned judgment. Once we have come to the irresistible conclusion that exercising power under Section 151 CPC in the facts and circumstances of the case is bad, we are not inclined to go into further issues that were extensively argued. 36. The other ground that the learned senior judge who passed the present impugned order had represented one of the opposite parties in certain collateral proceedings related to the subject property, merits some discussion. It appears that although the appellant raised this ground before us, it was neither raised before the High Court nor brought to the attention of the learned senior Judge. The party ought to have raised this issue also at the time of arguments, particularly when the issue of recusal of the learned Judge had been specifically raised on the other ground that he had been the presiding member of the Bench which had dismissed the appeal filed by the State. 37. When an issue was not raised before the learned Division Bench, we do not wish to spill much ink on this issue. However, the material placed on record by the counsel for the appellant cannot be ignored. Annexure P8 of the appeal paper book indicates that the Senior Judge heading the Division Bench, while being an advocate, had represented the Andhra Pradesh State Financial Corporation in one of the connected proceedings related to this case. 38. Although we have no doubt in our mind about the absence of bias of any form of the learned senior Judge, we must at the same time also look at the issue of whether right minded persons could consider there exists any real likelihood of bias. In the case of State of West Bengal v. Shivananda Pathak, 1998 5 SCC 513, this Court held as under: 34. In Metropolitan Properties Co. v. Lannon [(1968) 1 WLR 815 : (1968) 1 All ER 354] it was observed whether there was a real likelihood of bias or not has to be ascertained with reference to right-minded persons; whether they would consider that there was a real likelihood of bias. Almost the same test has also been applied here in an old decision, namely, in Manak Lal v. Dr Prem Chand Singhvi [AIR 1957 SC 425 : 1957 SCR 575 ] . In that case, although the Court found that the Chairman of the Bar Council Tribunal appointed by the Chief Justice of the Rajasthan High Court to enquire into the misconduct of Manak Lal, an advocate, on the complaint of one Prem Chand was not biased towards him, it was held that he should not have presided over the proceedings to give effect to the salutary principle that justice should not only be done, it should also be seen to be done in view of the fact that the Chairman, who, undoubtedly, was a Senior Advocate and an ex-Advocate General, had, at one time, represented Prem Chand in some case. These principles have had their evolution in the field of administrative law but the courts performing judicial functions only cannot be excepted from the rule of bias as the Presiding Officers of the court have to hear and decide contentious issues with an unbiased mind. The maxim nemo debet esse judex in propria sua causa and the principle justice should not only be done but should manifestly be seen to be done can be legitimately invoked in their cases. (emphasis supplied) 39. It is a well-established principle, both in our jurisprudence and across the world, that [N]ot only must justice be done; it must also be seen to be done R v. Sussex Justices, ex parte McCarthy, 1924 (1) KB 256. In the present circumstances, it may have been more apposite for the concerned Judge to have recused from this case. The appellant should have brought it to the notice of the learned senior Judge at the very first instance, and not at this belated stage. 40. In the above circumstances, we are of the opinion that the High Court should not have decided the recall application filed by the respondents, let alone pass such extensive orders which has the effect of unsettling proceedings and transactions which have a history of more than 60 years in a proceeding, basing on an application filed under Section 151 of the CPC.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]24. We have heard the learned Senior counsel on either side, perused the entire material on record. Though several grounds have been raised, the first ground taken is that the High Court erred in exercising jurisdiction under Section 151 of the CPC, when alternate remedies exist under the CPC. Second ground is that the Senior Judge on the Bench, who appeared for one of the parties, ought not to have heard the matter.25. In response to the first leg of challenge, i.e., on the procedural aspect, we may note that the recall application was filed under Section 151 of the CPC against the final decree dated 19.09.2013.26. Section 151 of the CPC provides for Civil Courts to invoke their inherent jurisdiction and utilize the same to meet the ends of justice or to prevent abuse of process. Although such a provision is worded broadly, this Court has tempered the provision to limit its ambit to only those circumstances where certain procedural gaps exist, to ensure that substantive justice is not obliterated by hyper technicalities. As far back as in 1961, this Court in Padam Sen v. State of U.P. , AIR 1961 SC 218  ,observed as under:8. …The inherent powers of the Court are in addition to the powers specifically conferred on the Court by the Code. They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature. It is also well recognized that the inherent power is not to be exercised in a manner which will be contrary to or different from the procedure expressly provided in the Code.29. The respondents in the present case had access to recourse under Section 96 of the CPC, which allows for appeals from an original decree. It must be remembered that the present matter was being heard by the High Court exercising its original jurisdiction. The High Court was in effect conducting a trial, and the final decree passed by the High Court on 19.09.2013 was in effect a decree in an original suit. As such, there existed a right of appeal under Section 96 of the CPC, for the respondents. Though they were not parties to the suit, they could have filed an appeal with the leave of the Court as an affected party.30. Sections 96 to 100 of CPC deals with the procedure for filing appeals from original decrees. A perusal of the above provision makes it clear that the provisions are silent about the category of persons who can prefer an appeal. But it is well settled legal position that a person who is affected by a judgment but is not a party to the suit, can prefer an appeal with the leave of the Court. The sine qua non for filing an appeal by a third party is that he must have been affected by reason of the judgment and decree which is sought to be impugned.31. In the light of the above, it can be safely concluded any aggrieved party can prefer an appeal with the leave of the Court.32. The High Court, in the impugned judgment, relied on the judgment of this Court in Indian Bank vs Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550,  wherein this Court acknowledges the possibility of maintaining a recall application against a judgement if it is obtained by fraud on the Court. However, it went on to hold that in cases of fraud, the Court may direct the affected party to file a separate suit for setting aside the decree obtained by fraud. The Court held as follows:22. 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…33. The subsequent judgment of this Court in Ram Prakash Agarwal v. Gopi Krishan, (2013) 11 SCC 296  further clarifies the law on the use of the power under Section 151 of the CPC by the Court in cases of fraud and holds as follows:13. Section 151 CPC is not a substantive provision that confers the right to get any relief of any kind. It is a mere procedural provision which enables a party to have the proceedings of a pending suit conducted in a manner that is consistent with justice and equity. The court can do justice between the parties before it. Similarly, inherent powers cannot be used to re-open settled matters. The inherent powers of the Court must, to that extent, be regarded as abrogated by the legislature. A provision barring the exercise of inherent power need not be express, it may even be implied. Inherent power cannot be used to restrain the execution of a decree at the instance of one who was not a party to suit. Such power is absolutely essential for securing the ends of justice, and to overcome the failure of justice. The Court under Section 151 CPC may adopt any procedure to do justice, unless the same is expressly prohibited.19. In view of the above, the law on this issue stands crystallised to the effect that the inherent powers enshrined under Section 151 CPC can be exercised only where no remedy has been provided for in any other provision of CPC. In the event that a party has obtained a decree or order by playing a fraud upon the court, or where an order has been passed by a mistake of the court, the court may be justified in rectifying such mistake, either by recalling the said order, or by passing any other appropriate order. However, inherent powers cannot be used in conflict of any other existing provision, or in case a remedy has been provided for by any other provision of CPC. Moreover, in the event that a fraud has been played upon a party, the same may not be a case where inherent powers can be exercised. (emphasis supplied)34. The High Court, relying upon the above judgments of this Court which recognizes the power to recall, seems to have lost sight of the restrictions imposed while exercising jurisdiction under Section 151 of the CPC, which were elaborately discussed by this Court in the above referred judgment about exercising of the power under Section 151 of the CPC being only in circumstances where alternate remedies do not exist.35. Therefore, we are of the firm opinion that recalling a final decree in such circumstances cannot be countenanced under Section 151 of the CPC. The High Court erred in exercising its jurisdiction under Section 151 of the CPC, to hear and pass a detailed judgment recalling its earlier final decree dated 19.09.2013, rather than directing the respondents to pursue the effective alternate remedies under law. Having said the above, we must clarify that we are not, in any way, doubting the proposition of law that fraud nullifies all proceedings, or that the Court has power to recall an order which was passed due to a fraud played on the Court. However, while exercising the power under Section 151 CPC for setting aside the final judgment and decree, the Division Bench should have taken into consideration the restriction which was observed by this Court in the captioned judgment. Once we have come to the irresistible conclusion that exercising power under Section 151 CPC in the facts and circumstances of the case is bad, we are not inclined to go into further issues that were extensively argued.36. The other ground that the learned senior judge who passed the present impugned order had represented one of the opposite parties in certain collateral proceedings related to the subject property, merits some discussion. It appears that although the appellant raised this ground before us, it was neither raised before the High Court nor brought to the attention of the learned senior Judge. The party ought to have raised this issue also at the time of arguments, particularly when the issue of recusal of the learned Judge had been specifically raised on the other ground that he had been the presiding member of the Bench which had dismissed the appeal filed by the State.37. When an issue was not raised before the learned Division Bench, we do not wish to spill much ink on this issue. However, the material placed on record by the counsel for the appellant cannot be ignored. Annexure P8 of the appeal paper book indicates that the Senior Judge heading the Division Bench, while being an advocate, had represented the Andhra Pradesh State Financial Corporation in one of the connected proceedings related to this case.38. Although we have no doubt in our mind about the absence of bias of any form of the learned senior Judge, we must at the same time also look at the issue of whether right minded persons could consider there exists any real likelihood of bias. In the case of State of West Bengal v. Shivananda Pathak, 1998 5 SCC 513,  this Court held as under:34. In Metropolitan Properties Co. v. Lannon [(1968) 1 WLR 815 : (1968) 1 All ER 354] it was observed whether there was a real likelihood of bias or not has to be ascertained with reference to right-minded persons; whether they would consider that there was a real likelihood of bias. Almost the same test has also been applied here in an old decision, namely, in Manak Lal v. Dr Prem Chand Singhvi [AIR 1957 SC 425  : 1957 SCR 575 ] . In that case, although the Court found that the Chairman of the Bar Council Tribunal appointed by the Chief Justice of the Rajasthan High Court to enquire into the misconduct of Manak Lal, an advocate, on the complaint of one Prem Chand was not biased towards him, it was held that he should not have presided over the proceedings to give effect to the salutary principle that justice should not only be done, it should also be seen to be done in view of the fact that the Chairman, who, undoubtedly, was a Senior Advocate and an ex-Advocate General, had, at one time, represented Prem Chand in some case. These principles have had their evolution in the field of administrative law but the courts performing judicial functions only cannot be excepted from the rule of bias as the Presiding Officers of the court have to hear and decide contentious issues with an unbiased mind. The maxim nemo debet esse judex in propria sua causa and the principle justice should not only be done but should manifestly be seen to be done can be legitimately invoked in their cases.39. It is a well-established principle, both in our jurisprudence and across the world, that [N]ot only must justice be done; it must also be seen to be done R v. Sussex Justices, ex parte McCarthy, 1924 (1) KB 256. In the present circumstances, it may have been more apposite for the concerned Judge to have recused from this case. The appellant should have brought it to the notice of the learned senior Judge at the very first instance, and not at this belated stage.40. In the above circumstances, we are of the opinion that the High Court should not have decided the recall application filed by the respondents, let alone pass such extensive orders which has the effect of unsettling proceedings and transactions which have a history of more than 60 years in a proceeding, basing on an application filed under Section 151 of the CPC.