Arunachellam Chetty vs Sabapathy Chetty

Spencer, J.—The question that has been argued in this Letters Patent Appeal is whether it is competent to a Court of inferior jurisdiction to

entertain a suit to declare a compromise decree obtained in a Court of superior jurisdiction to be not binding on the plaintiff as having been

obtained by fraud. The plaintiff asked in his plaint not only for a declaration that the decree in Original Suit No. 20 of 1914 on the file of the District

Court of Coimbatore was not binding on him but also that it should be set aside and that the said suit should be re-tried and decided on the

evidence. The District Munsif to whom the plaint was presented held that he had no jurisdiction to go into the question whether the former decree

was obtained by fraud and that only an appellate Court or a Court transferring a suit from one Court to another would have the power to direct a

re-trial. The District Judge, who heard an appeal from the District Munsif''s decision, was of opinion that a Court of inferior jurisdiction could not

either set aside or order a re-hearing of a suit tried by a Court of superior jurisdiction.

The learned Judge of this Court, who disposed of a petition to revise the District Judge''s order, gave as his reason for refusing to interfere in the

matter that the suit as originally instituted was not within the pecuniary jurisdiction of the District Munsif, although the amount involved in the

compromise decree was.

There seems to have been a considerable misapprehension as to the course that the Court trying the question of fraud would have to follow if it

decided in the plaintiff''s favour. As observed in Vijaya Ramayya v. Venkata Subba Rao ILR (1916) Mad. 853, it would be sufficient for the

Court to declare that the previous decree was of no effect so far as he was concerned. Their Lordships remarked in that case that the trial of the

suit, which had been improperly compromised, after a declaration to that effect would no doubt proceed if a proper application were made to the

proper Court. They refused in second appeal to make any order as to that. So here, the fact that the plaintiff asked for two reliefs which could not

in the nature of things be granted was no reason for not deciding whether ho was entitled to the declaration which he demanded if he proved that

the compromise was fraudulent.

Next as regards the powers of the District Munsif to try a suit brought for a declaration that a decree obtained in the District Court was obtained

by fraud, Section 9 of the CPC runs thus:

The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their

cognizance is either expressly or impliedly barred.

The respondent has ""not shown that there is any express or implied bar to such a suit as this, u/s 56, Clause (b) of the Specific Relief Act a

Court has no power to stay proceedings in a Court not subordinate to it; but there is no such limit placed by Section 42 on a Court that has

otherwise jurisdiction over the suit making a declaration as to a plaintiff''s title to a legal right and granting a permanent injunction against the

decree-holder executing his fraudulent decree against the plaintiff.

If it were only the Court which possessed the jurisdiction to try the suit in which the fraud was committed that could entertain a question whether

a decree so obtained was vitiated by fraud, there would be no relief by suit under Article 95, Limitation Act, for parties aggrieved by fraud

perpetrated in the trial of small cause suits, or of rent suits in Revenue Courts, of in appeals to the Privy Council, however gross the fraud. In

Nistarini Dassi v. Nando Lall Bose ILR (1899) Calc. 891 Stanley, J., quoting from Sheddess v. Patrick (1854) 1 Macq. H.L.C 607 observed:

It matters not whether the impeached judgment has been pronounced by an inferior tribunal or by the highest Court of judicature in the realm; in all

cases alike it is competent for every Court, whether superior or inferior, to treat as a nullity any judgment which can be clearly shown to have been

obtained by manifest fraud.

His judgment was upheld in appeal by a bench of three Judges in Nistarini Dassi v. Nando Lall Base ILR (1903) Calc. 369 (see observations of

Maclean, C.J., at pages 381--2) and confirmed by the Privy Council in Binode Behary Bose v. Nistarini Dassi (1906) ILR 33 Calc.180 (P.C.).

In .Banke Behari Lal v. Pokhe Ram I.L.R.(1903) All. 48 and Jawahir v. Neki Ram ILR (1915) All 189 it was held that; a Subordinate Judge

and a District Munsif could try suits to declare that decrees passed by the Calcutta High Court and by another Court in Bengal respectively were

void as against the plaintiff, when the cause of action arose within the jurisdiction of the former Courts owing to execution proceedings having been,

taken in that locality.

As regards pecuniary jurisdiction the compromise decree was for Rs. 1,700 and interest, and that is therefore the extent to which the interests of

the plaintiff in this suit have suffered. It is not suggested that there has been any under valuation. The property is situated, and the defendant resides,

within the jurisdiction of the Tiruppur District Munsif''s Court. u/s 12 of the Civil Courts Act the Tiruppur District Munsif''s Court is the proper

Court to try the suit unless it is shown to he ""otherwise exempted from his cognizance."" I am not aware of any provision of law which has the effect

of exempting from the jurisdiction of a Court, otherwise competent to try them, suits brought to avoid decrees obtained in suits when the original

plaintiff claimed in his plaint more than he got by the final decree.

I consider therefore that this appeal should be allowed and that the District Munsif of Tiruppur should be directed to restore Original Suit No.

1631 of 1915 to his file and dispose of it according to law. Costs throughout to abide and follow the result.

Srinivasa Ayyangar, J.

I agree. The question in this appeal is whether one Court has jurisdiction to entertain a suit to set aside the decree of another Court, in this case

a superior Court, on the ground of fraud. The present suit was filed in the Munsif''s Court, Tiruppur, to set aside a mortgage decree passed by

consent by the District Court, Coimbatore, for a sum of Rs. l,700 in favour of the defendant against the plaintiff in a previous suit in that Court by

the former against the latter to recover a sum of money which was beyond the pecuniary jurisdiction of the Munsif. The lands charged are wholly

within the local limits and the value of the relief sought is within the pecuniary limits of the jurisdiction of the Munsif. The plaintiff''s claim is to relieve

himself from the liability to pay Rs. 1,700 under the previous decree and to get rid of the charge on his lands for the same amount. The defendant

also lives within the jurisdiction of the Munsif.

It is now quite settled that the more appropriate mode of setting aside a consent-decree for fraud is by a separate action instituted for that

purpose where charges of fraud can be fully investigated, rather than by a motion in the cause in the nature of a review; but such, a suit is not, I

think, the same as an action of review or the old bill of review: Mussummut Gulal Koer v. Badshah Bahadur (1909) 10 C.L.J. 420. Legislative

recognition of this mode of procedure is afforded by Article 95 of the Limitation Act. A suit instituted for that purpose is an ordinary civil suit and

the jurisdiction of the Court to entertain such a suit must depend on the provisions of the Civil Courts Act and the Code of Civil Procedure. It was

not said that suits to set aside decrees were exempted from the cognizance of Munsifs and u/s 12 of the Civil Courts Act therefore Munsifs have

jurisdiction to try suits of this class. If the suit is considered to be one for the determination of a right to, or interest in, Immovable property, the

District Munsif''s Court, Tiruppur, was the proper Court to try it (section 16 of the Code); otherwise the same Court will have jurisdiction to try it

as the defendant actually and voluntarily resides within the local limits of its jurisdiction (section 20 of the Code). If for instance the plaintiff in the

present suit had executed a mortgage deed in favour of the defendant for Rs. 1,700 and interest on the security of the property charged by the

decree in satisfaction of his claim in. the previous suit and if that suit had been withdrawn or dismissed as adjusted without there being a decree and

if the present suit was to set aside the mortgage on the ground of fraud, there can scarcely be any doubt that the District Munsif of Tiruppur would

have jurisdiction to entertain it. For the purpose of determining the Court in which the suit should be filed I do not see any difference between the

two suits. The District Judge may also have concurrent jurisdiction, but the suit must be instituted in the District Munsif''s Court as that is the Court

of the lowest grade competent to try it. That is how the matter stands on the construction of the relevant portions of the statutes which prescribe or

limit the jurisdiction of Courts.

A certain amount of confusion has however arisen, by not keeping quite distinct the question of the appropriate relief or reliefs which a Court

can grant in a suit to set aside a decree or the consequences which follow the setting aside of a decree, from the question of competency of the

Court to try the suit. In this very suit the plaintiff after praying that the consent decree should be set aside, farther prayed that the Court should

direct the previous suit in the District Court to be re-tried and decided on the evidence; this latter relief he was not entitled to in the suit and the

District Munsif was not competent to grant it. If the plaintiff succeeds in the suit, and gets the consent-decree set aside, any application in the

previous suit, either to revive it or proceed with it, can only be made to the Court in which that suit was pending and it is only that Court that can

make any order in respect of that suit; but that in no way affects the jurisdiction of the Munsif to try the suit to set aside the decree. What exactly

are the forms of relief which a Court can grant when a party establishes his right to set aside a decree for fraud need not be considered or specified

now as they may. conceivably depend on the nature of the decree sought to be set aside and other circumstances of the case. Ordinarily a

declaration that the decree is not binding on the plaintiff and an injunction restraining the other party from executing it, would be sufficient and

proper.

The learned District Judge in his judgment in appeal in this case draws a distinction between the jurisdiction of the Court to treat a decree

obtained by fraud as a nullity when the impeachment of the decree arises incidentally or is only one of the reliefs prayed, and the jurisdiction of the

Court where the impeachment of the decree is the sole object of the suit. It is quite possible that a Court which has jurisdiction over a cause, may

have jurisdiction to decide on the validity of a decree though if the suit was wholly to set aside that decree it may have no jurisdiction on the ground

that no part of the cause of action arose within its local limits or the defendant did not reside there. That difference arises, not out of any distinction

between a direct and collateral impeachment of the decree, not out of any difference in the nature of the suits, but arises solely out of the difference

in the place of suing as determined by the provisions of the Code or any other law determining the venue. I do not understand how a Court which

is not competent to adjudicate directly on the validity or the invalidity of a decree can do so indirectly. If a decree obtained by fraud is a nullity and

is wholly void (which I think it is not in spite of some expressions to the contrary in the reported judgments), the Court may ignore it; but if it is

binding till set aside, the face that it is impeached in a suit in which other or substantial reliefs are asked which depend or are consequential on the

setting aside of the decree cannot confer a jurisdiction which otherwise the Court did not possess. The recent decisions of the Calcutta and

Allahabad High Courts, some of which were confirmed by the Privy Council, support the view taken above. In an early case in Calcutta, Pontifex,

J., in connection with an application to take the plaint off the file on the ground that leave to sue was not obtained is reported to have said, that:

where the principal part of the prayer of the suit was to set aside a consent-decree of the High Court in a previous suit., that Court and that Court

alone had jurisdiction.

Bibee Soloman v. Abdool Aziz (1879) 4 C.L.R., 366. In that case the whole cause of action appears to have arisen within the local limits of the

original jurisdiction of the High Court as the fraud which gave rise to the action was committed within the local limits. The suit itself appears to be

one in which substantial relief for the recovery of property appears to have been claimed and the previous decree which limited the right of the

plaintiff was sought to be set aside as a preliminary to obtain such relief. If that be so, the later decision of the same Court on the original side in

Nistarini Dassi v. Nundo Lall Bose I.L.R.(1899) Calc. 891 which was confirmed in appeal, which again was confirmed by the Privy Council, is

conclusive authority for the position that a Court which has jurisdiction over the cause has jurisdiction to set aside the decree of another Court on

the ground of fraud as an auxiliary to the granting of the other reliefs: Benode Behari Bose v. Nistarini Daasi I.L.R.(1906) Calc. 180. I would draw

particular attention to the judgment of Chief Justice Maclean in appeal at pages 380 and 381 in Nistarini Dassi v. Nundo Lal Bose ILR (1903)

Calc. 369 where the question of jurisdiction of one Court to set aside the decree of another Court for fraud is discussed with reference to the

Indian statutes. In Kedar Nath Mukherjee v. Prosonna Kumar Chatterjee 5 C.W.N. 559 the suit was to set aside On the ground of fraud a decree

of a Small Cause Court at Krishnagar and sale of Immovable properties in execution of that decree on transfer by a Munsif''s Court. The plaintiff

also claimed to recover possession of the property sold in execution and instituted the suit in the Munsif''s Court. On objection taken, the

jurisdiction of the Munsif to entertain the suit was sustained, but the learned Judges were disposed to hold that if the action was brought simply to

set aside the decree, the suit should have been instituted in the Krishnagar Civil Court. It is important to note that the learned Judges say that the

suit to set aside the decree of the Small Cause Court would not lie in that Court, but would have to be brought in the ordinary Civil Court, and it

may be that Krishnagar Civil Court was the only Court which could take cognizance of a suit under the Code of Civil Procedure, if it was simply to

set aside the decree.

The precise question now raised came up for decision in Sarthakram Maiti v. Nundo Ram Maiti 11 C.W.N. 579 and the Calcutta High Court

decided that a Munsif''s Court had jurisdiction to declare that a decree obtained by fraud in a Subordinate Court was not binding on the plaintiff

and to grant an injunction restraining the defendant from executing the decree. There also the decree in the previous suit was for a sum winch was

within the pecuniary jurisdiction of the Munsif, though apparently the claim was for an amount above it. In this judgment the learned Judges appear

to draw a distinction between ""setting aside a decree"" and declaring it to be a nullity; but what exactly is the difference is not explained. No doubt

one Court has no control over the record of another Court, and one Court setting aside the decree of another Court on the ground of fraud in an

action brought for that purpose, does not do so in the sense in which a judgment is vacated in appeal or on review. The consequences are, or may

be, different; further in the latter case directions may be given as to revivor, new trial or continuance of the proceedings and the Court may even

enter a fresh judgment in the old suit. Again there may be matters over which particular Courts have exclusive jurisdiction as for instance Probate

Courts. If an order or decree is passed by such Courts in matters within, their exclusive jurisdiction, such order or decree cannot be set aside by

another Court, though the latter Court may be able to make a declaration, that a party was guilty of fraud in obtaining that order see Priestman v.

Thomas (1884) L.R. 9 P.D. 210. In Earl of Baudon v. Becher (1835) 3 Cl.& Fin. 479, Lord Brougham said:

it is undeniably true that the Court of Chancery has no right to review a decree of the Court of Exchequer; that nothing but a Court of Appeal can

give redress if such decree is erroneous is clear, and indeed nothing can be more true than such a proposition; but it is equally true that if the decree

has been obtained by fraud it shall avail nothing for or against the parties affected by it, to the prosecution of a claim, or to the defence of a right.

How far such a distinction applies to Courts exercising the same or similar jurisdiction as the ordinary Civil Courts in British India may be a

question. If however that was the distinction made by the learned Judges in Sarthakram Maiti v. Maiti 11 C.W.N. 679, as probably it was, that

does not affect the present question. In a later case in the same Court, Abdul Huq Chowdhry v. Abdul Hafez 14 C.W.N. 695, the suit was

instituted in a Munsif''s Court to set aside a decree of the Presidency Small Cause Court. The jurisdiction of the Munsif was upheld and the learned

Judges pointed out that where a decree is set aside on the ground of fraud an injunction restraining execution is necessarily consequential thereon,

even where no other relief is sought and that such a decree is more than a mere declaratory decree. They followed their previous decision in

Sarthakram Maiti v. Nundo Ram Maiti 11 C.W.N. 679, and also another decision in Pramnath Roy v. Monesh Chandra Moitra ILR (1897) Calc.

546 which was confirmed by the Privy Council. Radha Raman Shaha v. Pram Nath Roy ILR (1901) Calc 475, and (1902) L.R. 29 I.A. 99 (Privy

Council) . In these cases the main question in dispute was whether a party who had applied to the Court which passed the decree, under Sections

108 and 311 of the old Code, to set aside an ex parte decree and a sale in execution of it, can sue to set them aside on the ground of fraud in a

fresh suit. Their Lordships in the Privy Council confirming the Judgment of the High Court held that he can; but these cases are important for the

present purpose for two reasons. In the first place though relief by way of recovery of possession of Immovable property sold in execution of the

fraudulent decree was asked, their Lordships do not appear to think that this made any difference, for they describe the suit as one ""for setting

aside a decree and auction sale on finding them to be illegal, fraudulent and collusive""; in the next place though the previous decree was passed and

the auction held by the Munsif, the suit to set them aside was instituted in a different Court, the Court of the Subordinate Judge. These two

decisions of the Privy Council appear to me to conclude the question in the present appeal.

The latest case in Allahabad is Jawahir v. Neki Ram ILR (1915) All. 189. There a suit was instituted in the Munsif''s Court, Fatehabad (Agra),

to set aside a decree of a Court in Silguri in Bengal. The learned Judges held that the Munsif had jurisdiction. They based their judgment on the

ground that a portion of the cause of action at least arose within the jurisdiction of the Fatehabad Munsif as the fraudulent decree was sought to be

executed by attaching properties situate within his local jurisdiction and they followed an earlier case in the same Court where it was held that it

was competent for the Cawnpore Court to set aside a decree of the Calcutta High Court: Banke Behari Lal v. Pokke Ram ILR (1903) All 45.

The decision in Banke Behari Lal v. Pokke Ram ILR (1903) All 45 was followed in this Court in Arunachallam Chetti v. Vellappa Tambiran

(1914) 28 M.L.J. 410, by the Chief Justice and Hannay, J.

There was a reference made to Section 56 of the Specific Relief Act, but that section has no application to the present case, for the Court is

not asked to stay any proceedings in a superior Court.

The respondent broadly contended that there was some principle of law which obliged a party desirous of setting aside a decree obtained by

fraud, to seek relief in the Court which passed the decree; but except the dictum of Pontifex, J., he did not refer to any other authority. If that

contention is correct, a Court of Appeal which has no original jurisdiction and a Small Cause Court or a Revenue Court which has only a limited

jurisdiction cannot entertain an original suit to set aside its decree, and no other Court can. This, however, does not appear to be the law. In

Flower v. Lloyd (1877) 6 Ch.D. 297, the Court of Appeal in England held that that Court had no original jurisdiction to hear an application to set

aside their decree passed in appeal on the ground of fraud but that a fresh action should be brought in a Court having original jurisdiction to set

aside the decree. In the same case, Baggallay, L.J., no doubt said that under the old practice when a decree has been obtained by fraud a bill was

filed in the Original Court in which suit had been brought for the purpose of setting the decree aside and the same may be done even after the

Judicature Acts came into force. I doubt however whether the Lord Justice was thinking of Courts of different grades exercising similar jurisdiction.

I therefore think that the District Munsif of Tiruppur had jurisdiction to entertain the suit, though he had no power to grant the second prayer of the

plaint which however did not affect the jurisdiction of the Court. It may be mentioned that the plaintiff agreed to withdraw this prayer in the first

Court.