GUNINDER PUSHP JAIN vs ARIHANT JAIN AND ANOTHER

Impugned in this revision petition is order dated 01.6.2015 passed by the learned Additional District Judge, Jammu ( The Trial Court for

short ) in File No. 196/Misc. titled Mahimawati Jain Vs Guninder Pushp Jain  whereby  the Trial Court has recalled its order dated

15.9.2006 whereby the suit filed by the respondents had been dismissed as withdrawn. Â

The facts giving rise to the filing of this petition, briefly stated, are that the petitioner filed a suit for declaration that she is owner in

possession of House No. 74- A/D Gandhi Nagar, Jammu to the exclusion of respondents and also for permanent prohibitory

injunction. The suit was based on an oral will. The suit aforesaid was not contested and the same was therefore, decreed  onÂ

10-01- 1998. One  Mahimawati Jain was one of the defendants in the aforesaid suit. On 4.1.1999, aforesaid Mahimawati Jain, filed a

suit for declaration to the fact that the decree passed on 10.01.1998Â by the Sub Judge( CJM), Jammu against her was null and void, inoperativeÂ

and not binding upon her.  Relief of permanent prohibitory injunction was also sought. She also claimed partition of the property by meets and

bounds. Mahimawati Jain, however, died during the pendency of the suit and the respondents herein were brought on record.  The

issues were framed in the suit and the evidence was led by the respondents herein. However, before the petitioner/defendant could enter in the

witness box, the respondents stated at bar before the Trial Court that the parties had settled their disputes and therefore, they did not want to proceed

further with the case. Statements of respondents and their counsel were recorded and accordingly the suit was dismissed as withdrawn vide order

dated 15.9.2006.Â

Respondents filed application for recalling of order dated 15.9.2006 and restoration of the suit titled Mahimawati Jain Vs Guninder to its

original number. The aforesaid application of the respondents was dismissed by the Trial Court vide its order dated 19.10.2010. The respondents

assailed the aforesaid order before this Court by way of revision petition which was allowed by this Court vide order dated 13.3.2015. Order dated

19.10.2010 passed by the Trial Court was set aside and direction was given to the Trial Court to dispose of the petition afresh. The matter was

again considered by the Trial Court and vide order impugned , application of the respondents was allowed and the order dated 15.9.2006Â

passed by the Trial Court dismissing the suit as withdrawn was recalled and the suit was restored to its original number.Â

In the aforesaid backdrop of facts, the petitioner is before this Court in this revision petition.Â

Heard learned counsel for the parties and perused the record.

Learned counsel for the petitioner assails the order impugned inter alia on the ground that the Trial Court while considering the application of the

respondents afresh, ignored the observations made by this court on 13.3.2015 while disposing of revision petition No. 11/2011. It is contended that

the Trial Court was obliged to consider the two issues, one regarding admitted compromise and the other, as to whether there was any fraud

played by the petitioner to induce the respondents to withdraw their suit .  Learned senior counsel appearing for the petitioner submits that

the Trial Court without returning any finding and without being satisfied that there was any fraud played by the petitioner so as to induce the

respondents to withdraw their suit, has erroneously allowed the application and has recalled its earlier order . Mr. Raina further submits that the

plea of the respondents that there was a compromise entered into between the petitioner and the respondents which persuaded the respondents to

withdraw their suit, cannot be accepted for the simple reason that in terms of Order 23 Rule 3 of the Code of Civil Procedure , a suit can be

adjusted wholly or in part by a lawful agreement upon compromise in writing and signed by the parties. He, therefore, submits that an

oral compromise propounded by the respondents should not have been taken note of by the Trial Court. He further elaborates by submitting that if the

plea of the petitioner that the respondents were misled in withdrawing the suit was based on compromise, then the same could have been relied upon

only if it was in writing and signed by the parties.  Therefore, the learned Trial Court erred in taking into consideration the oral compromiseÂ

propounded by the respondents . He has taken this court to the provision of Rule 3 of Order 23 of the Code of Civil Procedure to substantiate

his submission.Â

Per Contra, learned counsel for the respondents submits that his case is not one referable to Order 23 Rule 3. He submits that the case of the

petitioner does not fall within the ambit of Order 23 Rule 3 of the Code of Civil Procedure as there was no compromise decree passed by the

Trial Court on the basis of understanding arrived at between the respondents and the petitioner . He argues that they had withdrawn their suit

on being persuaded by the petitioner for amicable settlement of the issues outside the court. His case was, therefore, covered under Order 23 Rule 1

of the Code of Civil Procedure. Since the suit was abandoned by the respondents on being assured by the petitioner the he would retain

moveable property in the locker and  Plot No. 74 A/D Gandhi Nagar  Jammu would be partitioned in two equal parts, one part was to

be taken by the petitioner and other part by the respondents. The respondents have further contended that they were to relinquish their share in the

second floor of the building of Shri Yash Pal Jain at City Chowk, Jammu in lieu of sum of Rs. 10.00 lacs to be given to the respondents

 by the petitioner. He further elaborates that the above said settlement had been agreed to be reduced in writing by the parties. The respondents

claim that they did not doubt the bona fide of the petitioner and withdrew their suit on 15.9.2006. His further contention is that though the agreement

embodying terms and conditions aforesaid was to be drawn between the parties on the same  day and a sum of Rs. 10.00 lacs was to be given

to the respondents but the petitioner did not turn for executing the agreement and therefore, started dilly dallying the matter on one pretext

or the other. The respondents waited for the petitioner to fulfill his promise but in vain. After availing extension of time to do the needful, the petitioner

finally refused to put in writing the terms and conditions of the agreement what had been orally arrived at between the parties. It is thus contended

that the respondents were misled by the petitioner and persuaded to withdraw their suit . The withdrawal of the suit was, therefore, on account of

misrepresentation and a constructive fraud played by the petitioner.  Learned counsel for the respondents concludes his arguments by

submitting that in such circumstances, the Trial Court had ample powers vested in it by virtue of Section 151 of the Code of Civil Procedure to

recall the order and it has rightly exercised such powers taking into consideration the facts and circumstances of the case and,

therefore, the order impugned does not call for any interference. He has relied upon the Single Bench Judgment of Allahabad High CourtÂ

passed in State Bank of India Vs Firm Jamuna Prasad Jaiswal and sons and another , AIR 2003 Allahabad 337  and the Judgment of the

Supreme Court in case  Jet Ply Wood Private Limited and Another Vs Madhukar Nowlakha and Ors , 2006(2) Supreme 380.    Â

There could be no dispute with regard to the proposition that in absence of specific provision in the Code of Civil Procedure providing for

recalling of order permitting withdrawal of suit, the provision of section 151 of the Code of Civil Procedure can be resorted to in the interest of

justice . As observed by the Supreme Court in the case of Manohar Lal Chopra Vs Raj Bhadur Rao Raja Seth Hiralal, AIR 1962 SC 527,

provisions of Code of Civil Procedure are not exhaustive, contemplating all the possible circumstances which may arise in future litigationÂ

and consequently providing the procedure for them. It is in these circumstances, while dealing with similar matter, the Supreme Court in the case

of Jet Ply Wood Private Limited and Another Vs Madhukar Nowlakha and Ors( Supra ) . In paragraph Nos. 25 and 26 held thus:Â

‘‘25.The aforesaid position was reiterated by the learned Single Judge of the High Court in his order dated 4th February, 2005, though the

language used by him is not entirely convincing. However, the position was clarified by the learned Judge in his subsequent order dated 14th March,

2005, in which reference has been made to a bench decision of the Calcutta High Court in the case of Rameswar Sarkar (supra) which, in our view,

correctly explains the law with regard to the inherent powers of the Court to do justice between the parties. There is no doubt in our minds that in the

absence of a specific provision in the Code of Civil Procedure providing for the filing of an application for recalling of an order permitting withdrawal

of a suit, the provisions of Section 151 of the Civil Procedure Code can be resorted to in the interest of justice. The principle is well established that

when the Code of Civil Procedure is silent regarding a procedural aspect, the inherent power of the court can come to its aid to act ex debito justitiae

for doing real and substantial justice between the parties. This Court had occasion to observe in the case of Manohar Lal Chopra vs. Rai Bahadur Rao

Raja Seth Hiralal, AIR 1962 SC 527, as follows:Â

It is well settled that the provisions of the Code are not  exhaustive, for the simple reason that the Legislature is incapable of contemplating all the

possible circumstances which may arise in future litigation and consequently for providing the procedure for them.""Â

Based on the aforesaid principle, the Division Bench of the Calcutta High Court, in almost identical circumstances in Rameswar Sarkar's case,

allowed the application for withdrawal of the suit in exercise of inherent powers under Section 151 of the Code of Civil Procedure, upon holding that

when through mistake the plaintiff had withdrawn the suit, the Court would not be powerless to set aside the order permitting withdrawal of the

suit.’’Â

9. Referring to the Division Bench Judgment of Calcutta High Court in rendered in the case of Rameshwar Sarkar Vs State of West Bengal ,

AIR 1986 Calcutta 19,  the Supreme Court in the aforesaid judgment held that if the suit has been withdrawn through mistake, the court

would not be powerless to set aside the order permitting the withdrawal of the suit and this can be so done in exercise of inherent powers

under section 151 of the Code of Civil Procedure .  Similarly in the case of State Bank of India  Vs Firm Jamuna Prasad Jaiswal (

supra) , Allahabad High Court held that the application to withdraw the application for dismissing the suit as withdrawn would be maintainable , if the

fraud is played upon the plaintiff. It further went on to say that the fraud as defined in the Contract Act means actual fraud. But in equity the

courts have also developed the doctrine of ‘constructive fraud’. Observations of the Allahabad High Court in paragraph No. 12 are note worthy

and the same are reproduced hereunder:Â

‘12. It is to be noted that even under this definition of fraud a promise made by a party without any intention of performing it, or any other act fitted

to deceive are acts covered under this definition of fraud. If, therefore, the Bank's case that a settlement was entered into in which it was agreed that

the respondent would not execute the decree in its favour but would rest content with the sum of Rs. 1 lakh the principal amount of the Bank draft--a

promise which the respondent never intended to keep, is accepted the act of the respondent in processing to execute the decree for Rs. 45 lakhs and

odd would be a 'fraud'. The definition of fraud under Section 17 of the Contract Act is, however, far narrower than the concept of fraud in equity. In

AIR 1914 Sindh 28, Schehnomal Jealdas v. Manager, Encumbered Estates this distinction has been taken note of and it has been held as follows:Â

Mr. Wadhumal has argued that a decree can be set aside only on the ground of fraud, as defined in Section 17, Contract Act. This argument was

raised in a previous case that came before this Court for disposal (first Appeal No. 39 of 1906) and was disposed of by the judgment in the following

terms--Mr. Dipchand has ingeniously endeavoured to persuaded the Court that in dealing with his case we must hold that the decree can be set aside

only on the ground of fraud, within the very narrow meaning of the word given to 'fraud' by the definition in Section 17, Contract Act. But we are not

dealing with a common law case of contract; we are called on to exercise our equitable jurisdiction and apply the equitable principles which have by

force of Regulation 4 of 1927 been made part of the law of this country. The ruling case on the point is the Duchess of Kingston's case, in which it

was held that the effect of a judgment may be avoided by proving the same to have been obtained by fraud or collusion. As fraud is infinite in its

varieties, the Courts have always refused to define it (Snell, P. 519); nor is the word defined for the purposes of the Evidence Act; See Amir Ali and

Woodnoffe, Notes to Section 41. But a reference to any standard texts book on equity will make it obvious that ""fraud"" has a wide meaning, far wider

than the definition in the Contract Act. It is necessary to investigate into the full meaning of the word for the purposes of the case, for we have it

declared by Lord Cairns that a decree can be set aside if there be 'fraud' such that there is in the person chargeable with it the malus animous putting

itself in motion and acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him;"" Patch

v. Ward cited in Mahomed Golab v. Mahomed Sulliman.""Â

Fraud as defined in the Contract Act means actual fraud. But in equity the Courts have also developed the doctrine of 'constructive fraud.' The

following extract from Snell's Principles of Equity, Chapter 6, Part II, pages 545 on the concept of 'constructive fraud' is being quoted: . .Â

In equity, the term 'fraud' embraces not only actual fraud, in the sense just defined, but also certain other conduct which falls below the standards

demanded by equity. Courts of equity did not even stop at 'moral fraud in the ordinary sense' but took account of any 'breach of the sort of obligation

which is enforced by a Court that from the beginning regarded itself as a Court of conscience' (Nocton v. Lord Ashburton 1914 A.C. 932 at 954, per

Viscount Haldane L.C.). the Courts have refused to define this extended, or constructive, fraud; for, in the words of Lord Hardwicke, 'Fraud' is

infinite, and were a Court of equity once to lay down rules, how far they' would go, and no farther, in extending their relief against it, or to define

strictly the species of evidence of it, the jurisdiction would be cramped, and perpetually eluded by new schemes which the fertility of men's invention

would contrive.""Â

While examining the question whether a fraud had been played upon the Bank in making the application for withdrawal it is fraud the Bank in making

the application for withdrawal it is fraud in this wider sense of 'constructive fraud', which defines definition which has to be taken into account. If the

result dismissing the Bank's application would be to close an unconscionable transaction in favour of the respondent wrested by it unscrupulously the

Court would be slow in dismissing the application. While it can be contended that in the case of compromise decree, the narrower concept of fraud

defined in Section 17 of the Contract Act be applied because it is after all a compromise which is in the nature of contract which is assailed the same

cannot be said in respect of unilateral transaction of withdrawal. In the latter case the doctrine of 'constructive fraud' has to be applied.’Â

In the context of case law aforementioned when the order impugned is examined, it is apparent from the pleadings of the parties that

while the suit between the parties was pending , there was settlement, whether we call it an oral agreement or compromise, to settle the

dispute subject matter of adjudication in the suit. While filing their response to the application moved by the respondents for recalling of the

order, the petitioner has not denied the agreement. That being so,  the learned Trial Court was right in inferring that the

respondents were persuaded to withdraw their suit on being induced by sheer misrepresentation which was not intended to be acted

upon by the petitioner. Needless to say that for making false representation or inducing somebody to do a particular thing in a particular manner, one

does not need a written instrument. Such representation or inducement can be oral or even inferable from conduct of a person making it. In the

instant case, the Trial Court had not passed a compromise decree but had dismissed the suit as not pressed. The plea of learned counsel for petitioner

based on the provisions of Order 23 Rule 3 is not legally tenable.    It is, thus, apparent that the respondents believed the petitioner and

abandoned their suit. It is not correct to say that the order of dismissal of suit as withdrawn can be recalled only in case of a proved

fraud but the same can be recalled by the court, ex- debit justicia , if it is satisfied that the withdrawal of the suit was engineered  by

the defendants by deceit which would include constructive fraud, inducement and misrepresentation. The learned Trial Court has taken into

consideration the aforesaid aspects and has correctly recalled the order of withdrawal by passing the impugned order. The impugned order

therefore, does not suffer from any material irregularity nor can the same be said to have caused failure of justice. The Trial Court has exercised

the jurisdiction vested in it within four corners of law.Â

The revision petition is, thus, found to be without any merit and the same is accordingly dismissed alongwith connected MP(s).