Plea of fraud after 16 years delay

Plea of fraud raised at the stage of execution of decree.

The assignment of agreement, which was basis of decree sought to be challenged claiming the signatures on the deed to bea forgery but no explanation offered for delay of 16 years in raising the question.

Kalyani executed an agreement for sale on 27.12.1968 in favour of second plaintiff-Vasudevan Pillai. Second plaintiff assigned the aforesaid agreement on 05.08.1978 in favour of one Rajayyan and the said Rajayyan assigned the agreement in favour of third plaintiff-Selvi on 10.03.1983. As pointed out earlier, all the three plaintiffs filed final decree application in I.A. No.120 of 1985. After the disposal of the matter by the first appellate court and when the second appeal was pending before the High Court, second plaintiff Vasudevan Pillai filed an affidavit on 07.01.2013 before the trial court – District Munsiff Court, Kuzhithurai alleging that a fraud has been played on him and denying the right of third plaintiff-Selvi to pursue the final decree application. Continue reading “Plea of fraud after 16 years delay”

Procedure for disposal of Second Appeal by High Court.

Framing of question of law:

High Court framed 6 questions of law at the time of admission of appeal but delivered no judgement on those questions. However it framed two other questions in the judgement and decided the appeal. Procedure if legal?

First, though it rightly framed six substantial questions of law at the time of admission of the appeal on 30.11.2002 as arising in the case but erred in not answering these questions.

The High Court had the jurisdiction to decide the second appeal only on the six substantial questions of law framed at the time of admitting the appeal. In other words, the jurisdiction of the High Court to decide the second appeal was confined only to six questions framed and not beyond it. Continue reading “Procedure for disposal of Second Appeal by High Court.”

Extinguishment of right, title and interest in property

Effect of Re-grant of Land.

Whatever so-called rights, title and interest which the original holders derived from the orders of re-grant in 1973 in the suit property in their favour, the same stood extinguished by efflux of time.

The reason was that in order to keep such new rights intact and enforceable, the original holders (three PATIL) were under a legal obligation to have filed a suit for claiming a declaration and possession of the suit land and this ought to have been done by them within 12 years from the date of re-grant, i.e., 1973.

They, however, failed to do so within 12 years and when they actually tried to exercise their rights by filing the suit in 2004 (after 31 years from 1973), by then it was too late to exercise such rights in law. By that time, their rights in the suit land stood extinguished. Continue reading “Extinguishment of right, title and interest in property”

Arbitration Clause referring to 1940 Act

Applicability of Arbitration Act, 1996.

What is material for the purposes of the applicability of 1996 Act is the agreement between the parties to refer the disputes to arbitration. If there be such an arbitration agreement which satisfies the requirements of Section 7 of 1996 Act, and if no arbitral proceeding had commenced before 1996 Act came into force, the matter would be completely governed by the provisions of 1996 Act. Any reference to 1940 Act in the arbitration agreement would be of no consequence and the matter would be referred to arbitration only in terms of 1996 Act consistent with the basic intent of the parties as discernible from the arbitration agreement to refer the disputes to arbitration. Continue reading “Arbitration Clause referring to 1940 Act”

Scope of application of principle of res judicata

Resjudicata u/s 11 of CPC:

The law on the subject of Res Judicata may be stated as follows:

(1) The general rule is that all issues that arise directly and substantially in a former suit or proceeding between the same parties are res judicata in a subsequent suit or proceeding between the same parties. These would include issues of fact, mixed questions of fact and law, and issues of law.

(2) To this general proposition of law, there are certain exceptions when it comes to issues of law:

(i) Where an issue of law decided between the same parties in a former suit or proceeding relates to the jurisdiction of the Court, an erroneous decision in the former suit or proceeding is not res judicata in a subsequent suit or proceeding between the same parties, even where the issue raised in the second suit or proceeding is directly and substantially the same as that raised in the former suit or proceeding. This follows from a reading of Section 11 of the Code of Civil Procedure itself, for the Court which decides the suit has to be a Court competent to try such suit. When read with Explanation (I) to Section 11, it is obvious that both the former as well as the subsequent suit need to be decided in Courts competent to try such suits, for the “former suit” can be a suit instituted after the first suit, but which has been decided prior to the suit which was instituted earlier. An erroneous decision as to the jurisdiction of a Court cannot clothe that Court with jurisdiction where it has none. Obviously, a Civil Court cannot send a person to jail for an offence committed under the Indian Penal Code. If it does so, such a judgment would not bind a Magistrate and/or Sessions Court in a subsequent proceeding between the same parties, where the Magistrate sentences the same person for the same offence under the Penal Code. Equally, a Civil Court cannot decide a suit between a landlord and a tenant arising out of the rights claimed under a Rent Act, where the Rent Act clothes a special Court with jurisdiction to decide such suits. As an example, under Section 28 of the Bombay Rent Act, 1947, the Small Causes Court has exclusive jurisdiction to hear and decide proceedings between a landlord and a tenant in respect of rights which arise out of the Bombay Rent Act, and no other Court has jurisdiction to embark upon the same. In this case, even though the Civil Court, in the absence of the statutory bar created by the Rent Act, would have jurisdiction to decide such suits, it is the statutory bar created by the Rent Act that must be given effect to as a matter of public policy. (See, Natraj Studios (P) Ltd. v. Navrang Studios & Anr., (1981) 2 SCR 466 at

482). An erroneous decision clothing the Civil Court with jurisdiction to embark upon a suit filed by a landlord against a tenant, in respect of rights claimed under the Bombay Rent Act, would, therefore, not operate as res judicata in a subsequent suit filed before the Small Causes Court between the same parties in respect of the same matter directly and substantially in issue in the former suit.

(ii) An issue of law which arises between the same parties in a subsequent suit or proceeding is not res judicata if, by an erroneous decision given on a statutory prohibition in the former suit or proceeding, the statutory prohibition is not given effect to. This is despite the fact that the matter in issue between the parties may be the same as that directly and substantially in issue in the previous suit or proceeding. This is for the reason that in such cases, the rights of the parties are not the only matter for consideration (as is the case of an erroneous interpretation of a statute inter parties), as the public policy contained in the statutory prohibition cannot be set at naught. This is for the same reason as that contained in matters which pertain to issues of law that raise jurisdictional questions. We have seen how, in Natraj Studios (supra), it is the public policy of the statutory prohibition contained in Section 28 of the Bombay Rent Act that has to be given effect to. Likewise, the public policy contained in other statutory prohibitions, which need not necessarily go to jurisdiction of a Court, must equally be given effect to, as otherwise special principles of law are fastened upon parties when special considerations relating to public policy mandate that this cannot be done.

(iii) Another exception to this general rule follows from the matter in issue being an issue of law different from that in the previous suit or proceeding. This can happen when the issue of law in the second suit or proceeding is based on different facts from the matter directly and substantially in issue in the first suit or proceeding. Equally, where the law is altered by a competent authority since the earlier decision, the matter in issue in the subsequent suit or proceeding is not the same as in the previous suit or proceeding, because the law to be interpreted is different.

[Source: Canara Bank vs N.G. Subbaraya Setty decided by SC on 20 April, 2018]

Prosecution for perjury

Scheme of Section 195 read with sec. 340 of Cr. P.C.

The prosecution for perjury should be sanctioned by courts only in those cases where the perjury appears to be deliberate and conscious and the conviction is reasonably probable or likely.

No doubt giving of false evidence and filing false affidavits is an evil which must be effectively curbed with a strong hand but to start prosecution for perjury too readily and too frequently without due care and caution and on inconclusive and doubtful material defeats its very purpose. Prosecution should be ordered when it is considered expedient in the interests of justice to punish the delinquent and not merely because there is some inaccuracy in the statement which may be innocent or immaterial. There must be prima facie case of deliberate falsehood on a matter of substance and the court should be satisfied that there is reasonable foundation for the charge.

[Source: Chajoo Ram v. Radhey Shyam, AIR 1971 SC 1367, 1971 SCR 172]

In view of the language used in Section 340 CrPC the court is not bound to make a complaint regarding commission of an offence referred to in Section 195(1)(b), as the section is conditioned by the words “court is of opinion that it is expedient in the interests of justice”.

Continue reading “Prosecution for perjury”

Demand of additional consideration after execution of Sale Deed

Cancellation of sale due to non utilization:

In the first instance, it needs to be emphasised that there is no such condition of completion of construction within a period of two years in the sale deed. Such a condition was only in the allotment letter. However, after the said allotment, the appellant- Corporation not only received entire consideration but executed the sale deeds as well. In the sale deeds no such condition was stipulated. Therefore, the High Court is right in holding that after the sale of the property by the appellant-Corporation to the respondents, whereby the respondents acquired absolute marketable title to the property, the appellant-Corporation had no right to insist on the conditions mentioned in the allotment letter, which cease to have any effect after the execution of the sale deed.

Rights and duties of buyers and sellers:

Section 55 of the Transfer of Property Act deals with rights and liabilities of buyer and seller. As per this provision, when the buyer discharges obligations and seller passes/conveys the ownership of the property, the contract is concluded. Thereafter, the liabilities, obligations and rights, if any, between the buyer and seller would be governed by other provisions of the Contract Act and the Specific Relief Act, on the execution of the sale deed. The seller cannot unilaterally cancel the conveyance or sale. Continue reading “Demand of additional consideration after execution of Sale Deed”

Conditions for stay of trial in Civil and Criminal matters

Effect of stay of trial:

It is well accepted that delay in a criminal trial, particularly in the PC Act cases, has deleterious effect on the administration of justice in which the society has a vital interest. Delay in trials affects the faith in Rule of Law and efficacy of the legal system. It affects social welfare and development. Even in civil or tax cases it has been laid down that power to grant stay has to be exercised with restraint. Mere prima facie case is not enough. Party seeking stay must be put to terms and stay should not be incentive to delay. The order granting stay must show application of mind. The power to grant stay is coupled with accountability.

Stay of trial in Corruption case:

Continue reading “Conditions for stay of trial in Civil and Criminal matters”

Does Arbitration bars remedy under SARAFESI Act

Effect of Arbitration Clause.

Loan agreements contained arbitration clauses which were invoked by the appellant with the filing of cases under Section 9 of the Arbitration and Conciliation Act, 1996. In view thereof, initiation of any other proceedings under the SARFAESI Act if impermissible in law?

Because arbitration is an alternative to the proceedings under the RDB Act, it would not be obligatory on the Bank/Financial Institution to withdraw the proceedings pending before the arbitrator, prior to resorting to secure its interest under the SARFAESI Act. The Bank/financial institution can simultaneously proceed before the Arbitral Tribunal for adjudication of disputes and also take recourse to Section 13 of the SARFAESI Act for enforcement of its security interest. Both the proceedings can continue parallel to each other. Continue reading “Does Arbitration bars remedy under SARAFESI Act”

Dismissal of suit on limitation in second appeal

The substantial question of law which was formulated by the High Court pertains to the limitation in filing the suit which reads as under:

Whether the suit in question was barred by time in as much as prayer sought in the plaint shows that cause of action arose in 1990 though the suit was filed in 2004 and admittedly the period of limitation is only three years.

Dismissal of suit as time barred:

Continue reading “Dismissal of suit on limitation in second appeal”