SUPREME COURT defined the effects of FRAUD in Govt. action or on/in Court & consequently the Duty of Courts thus

:1) AIR 1994 SUPREME COURT 853

Short Note : Proceedings in court --Fraud by litigant - withholding of vital document relevant to litigation --It is Fraud on court --Guilty party is thrown out of court at any stage -- Litigant obtaining preliminary decree --Decree is vitiated by Fraud .

At paragraph 7: " Finality of litigation " can not be pressed to the extent of such an absurdity that it becomes an Engine of fraud in the hands of dishonest litigants . 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 ……………….. . 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 the litigation.

At para. 8 : " A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another . It is a deception in order to gain by another's loss .It is a cheating intended to get an advantage ".

" Fraud avoids all acts , ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the Court is a nullity and non-est. in the eyes of law. Such a Judgment / decree by the first Court or by the highest Court - has to be treated as a nullity by every Court, whether superior or inferior. It can be challenged in any Court even in collateral proceedings.."


2 ) AIR 1996 Supreme Court 2592

At Para. 20; This plea could not have been legally ignored by the Commission which needs to be reminded that Authorities be they Constitutional , Statutory or Administrative , ( and particularly those who have to decide lis ) possess the power to recall their judgement or Orders if they are obtained by Fraud as Fraud & Justice never dwell together .(Frau's et jus nunquam cohabitant ) . It has been repeatedly said that Fraud and Deceit defend of excuse no man.(Fraus et dolus namino patri cinary debent ).

At Para. 21 :In Smith Vs East Elloe Rural District Council 1956 AC 736 , the House of Lords held that the effect of Fraud would normally be to vitiate any act or order .

In Lazarus Estate Ltd Vs Beasley , ( 1956 ) 1 QB. 702 at 712 , Denning LJ said

" No Judgement of a court , no Order of a Minister , can be allowed to stand if it has been obtained by Fraud . Fraud unravels Everything ."

At Para . 22 : The Judiciary in India also possesses inherent Power , specially under Section 151 CPC to recall its judgement or Order if it is obtained by fraud on court …………… .These powers spring not from legislation but from the nature & ……..or courts themselves so as to enable them to maintain their Dignity ,….. . This power is necessary for the orderly administration of the court's business .

At Para. 23 . : Since Fraud effects Solemnity , Regularity & Orderliness of the Proceedings of the Court and also amounts to an abuse of process of Court , the Courts have been held to have inherent Power to set aside an Order obtained by Fraud practiced upon that Court . Similarly , 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 .

At Para. 26 : In Webster Dictionary , International Education , " Forgery" is defined as :- " The act of falsely making or materially altering ,with intent to defraud ; any writing which , if genuine , might of legal efficacy on the foundation of a legal liability . "


3 ) AIR 2000 SUPREME COURT 1165 .

Short Title ( A ) Civil P.C (5 of 1908 ). Sec.151 :--Power to recall its order --Order obtained by practicing fraud --Every Court / Tribunal has power to recall such order .

No Court or …. can be regarded as powerless to recall its own order if it is convinced that the order was wangled through Fraud or Misrepresentation of such a dimension as would affect the very basis of claim .

Para - 14 :- In S. P. Chengalvaraya Naidu ( dead ) by L Rs. v. Jagnnath ( dead ) by Lrs., ( 1994 ) 2 SCC 1 ( AIR 1994 SC 853 ) the two Judges Bench of this Court held : " Fraud avoids all acts , ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the Court is a nullity and non-est in the eyes of law. Such a Judgment / decree by the first Court or by the highest Court - has to be treated as a nullity by every Court, whether superior or inferior. It can be challenged in any Court even in collateral proceedings.."

Para - 15 :- In Indian Bank v. Satyam Fibres ( India ) Pvt. Ltd.. ( 1996 ) 5 SCC 550: ( 1996 AIR SCW 3281 AIR 1996 SC 2592 ) another two Judges bench, after making reference to a number of earlier decisions rendered by different High Courts in India, stated the legal position thus: "Since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practiced upon that Court. Similarly, 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."

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