Sardar Harjit Singh Kochhar Vs Sardar Manjit Singh Kochhar

For the Appellant: Mr. Abhimanyu Rathore and Ms.Poonam Gehlot, Advocates. For the Respondent: Mr. Y.P. Sood, Advocate for respondent No.1. Mr. B.R. Verma, Advocate, for respondent No.2.

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Vivek Singh Thakur, Judge

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This appeal has been preferred by the appellant Sardar Harjit Singh against order dated 31^st May, 2024, passed in OMP No. 220 of 2023 filed in Civil Suit No 24 of 2018, whereby an application under Order 23 Rule 3 of Code of Civil Procedure (in short “CPC”), preferred by respondent No.2 Sardar Guljit Singh Kochhar for setting aside judgment and decree dated 27^th June, 2019 passed on the basis of compromise between appellant Sardar Harjit Singh Kochhar and respondent No.1 Sardar Manjeet Singh Kochhar in Civil Suit No. 24 of

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2018, has been allowed by recalling the said judgment and decree by holding that the same has been obtained by concealing the material facts with regard to pendency of civil suit in Delhi High court.

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2 It is also apt to record that after recalling the judgment and order, for the assessed value of suit as Rs.95 lacs on account of increase of pecuniary jurisdiction of the District Judge, vide order dated 11^th September, 2024, the suit has been directed to be sent to the District Judge, Shimla for its disposal as per law with direction to the parties, through their respective counsel, to appear before the Court of District Judge Shimla on 26^th September, 2024.

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3 Admittedly, parties in this appeal i.e. Sardar Harjit Singh Kochhar (plaintiff), Sardar Manjeet Singh Kochhar (defendant) and Sardar Guljit Singh Kochhar (third party to the suit) are real brothers being sons of late Sardar Manohar Singh Kochhar.

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4 Defendant Manjeet Singh Kochhar has also filed a Civil Suit (OS) No. 2552 of 2014 titled as Manjeet Singh Kochhar vs. Harjit Singh Kochhar and another in the High Court of Delhi wherein Guljit Singh Kochhar is also party as defendant No.5. The said suit has been filed for partition of estate of late Manohar Singh Kochhar and his HUF property. Guljit Singh Kochhar has filed a Counter Claim No. 32 of 2015 in the said suit. Vide order dated 18^th May, 2015, Delhi High Court has directed the parties not to create any third party right over the suit property.

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5 After having knowledge about Gift Deed dated 19^th March, 1986, alleged to have been executed by late Manohar Singh Kochhar in favour of plaintiff Harjit Singh Kochhar and defendant Manjeet Singh Kochhar, Guljit Singh Kochhar filed an application under Order 6 Rule 17 CPC bearing I.A. No. 21879 of 2015 for amendment of Counter Claim No. 32 of 2015 to challenge the purported Gift Deed dated 19^th March, 1986 being null, void, nonest and not binding on him. It has been informed that the said application for amendment has been allowed by Delhi High Court.

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6 In the year 2018, Civil Suit No. 24 of 2018 was filed in this High Court by Harjit Singh Kochhar against Manjeet Singh Kochhar for partition, separate possession and permanent prohibitory injunction with respect to the property at Shimla with claim that their father late Manohar Singh Kochhar had executed a Gift Deed dated 19^th March, 1986 duly registered with Sub Registrar, Shimla in favour of Harjit Singh and Manjeet Singh and thus both of them were owners in possession in equal shares of the suit property at Shimla. Despite the fact that Guljit Singh Kochhar is also son of Manohar Singh Kochhar, he was not arrayed as party. Plea of execution of Gift Deed in favour of Harjit Singh Kochhar and Manjeet Singh Kochhar was admitted in written statement but with denial of exclusive possession of plaintiff Harjit Singh upon the suit property.

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7 During pendency of suit, on 14^th August, 2018 a compromise was effected between the parties to the suit in Shimla

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i.e. Harjit Singh and Manjeet Singh, and preliminary decree for partition was passed on 31^st August, 2018. Thereafter, on filing an application under Order 23 Rule 3 CPC by Harjit Singh Kochhar and Manjeet Singh Kochhar, suit was decided in terms of compromise on 27^th June, 2019.

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8 In aforesaid background, Guljit Singh filed OMP No 220 of 2023 for setting aside the judgment and decree dated 27^th June, 2019 on the ground that the said judgment and decree is vitiated by fraud and concealment of material facts.

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9 Present appeal has been preferred on the ground that an application for recalling the judgment and decree dated 27^th June, 2019 was not maintainable under provisions of Order 23 Rule 3 CPC and learned Single Judge has no jurisdiction to recall the decree which was passed considering all material and aspects placed on record and provisions of Order 23 Rule 3 and Rule 3A CPC are explicitly applicable only to the parties to the compromise decree. As Guljit Singh Kochhar was not party to original decree, he has no locus to challenge the decree under these provisions. Further that ingredients of fraud were neither pleaded nor established as per requirement of law for allowing the application filed by Guljit Singh, and judgment and decree dated 27^th June, 2019, for absence of such ingredients, was not liable to be recalled particularly when Harjit Singh Kochhar and Manjeet Singh Kochhar are owners of suit property in Shimla and applicant Guljit Singh has no right, title or interest in the suit property.

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Further that as no right to property has devolved upon applicant Guljit Singh in Gift Deed, therefore, the applicant was not required to be impleaded in the suit and, thus, it cannot be said that suit was collusive and there was suppression of material facts. It has been further argued that application under Order 6 Rule 17 CPC is still pending and factum of pendency of Civil Suit in the Delhi High Court was disclosed in the written statement of Manjeet Singh Kochhar filed in suit at Shimla and thus, parties have not concealed any material fact rather pendency of suit at Delhi is disclosed. Therefore, it has been alleged that because judgment and decree was passed on valid agreement/compromise between Harjit Singh Kochhar and Manjeet Singh Kochhar and thus learned Single Judge has committed a significant legal error, irregularity and illegality and has failed to recognize the established principles.

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10 Order dated 31^st May 2024 passed in OMP No. 220 of 2023, impugned in this appeal, was also assailed by Manjeet Singh Kochhar by filing FAO(OS) No. 13 of 2024.

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11 On 20^th March, 2025, the Principal Division Bench, in these appeals, had observed as under:-

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“In view of the earlier order, the proceedings in Civil Suit No.24 of 2018, pending before the Additional District Judge-I, Shimla, District Shimla, have been stayed on account of Section 10 of the Code of Civil Procedure and since the Civil Suit No.2552 of 2014, titled as Manjeet Singh vs. Harjit Singh Anr. is pending inter se the parties before the Delhi High Court.

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2. It is brought to our notice that initially the Civil Suit was pending consideration before this Court, when the initial judgment and decree dated 27.06.2019, was passed on the basis of compromise. The said judgment and decree has been recalled, vide OMP No.220 of 2023, on 21.05.2024, at the behest of applicant (Sardar Guljit Singh Kochhar).

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3. On account of pecuniary jurisdiction, the suit is now pending before the Additional District Judge-I, Shimla, District Shimla and not before this Court.

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4. Learned counsel for the parties to have necessary instructions and that appropriate application(s) be filed before the court concerned within two weeks for the stay of proceedings. In view of above, we are of the considered opinion that nothing survives in the present appeals.

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5. To come up on 03.04.2025 , for further order.”

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12 The appellant has not sought review of order dated 20^th March, 2025 wherein the Principal Division Bench of this High Court has concluded that Bench was of the considered opinion that nothing survives in these appeals. Therefore, in absence of such prayer, appeals preferred by Harjit Singh Kochhar and Manjeet Singh Kochhar deserve to be disposed of in terms of order 20^th March, 2025.

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13 In aforesaid background, vide even dated order, the appeal FAO(OS) No. 13 of 2024 stands dismissed as withdrawn.

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14 However, in present appeal, appellant has invited a detailed order claiming that application under Order 23 Rule 3 of CPC

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was not maintainable and being a stranger Guljit Singh was not entitled to invoke provisions of Order 23 Rule 3/Rule 3A CPC. According to him, he should have either filed an independent suit assailing/setting aside the judgment and decree dated 27^th June, 2019 or should have challenged the said judgment and decree by filing appeal under Order 43 Rule 1(A) CPC.

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15 Order 23 Rule 3/Rule 3A CPC reads as under:-

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“3. Compromise of suit

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Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties], or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so for as it related to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the suit:

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Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.

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Explanation : An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule.

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3A. Bar to suit

No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.”

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16 Rule 1A of Order 43 of CPC reads as under:

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“1A. Right to challenge non-appealable orders in appeal against decrees.-

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(1) Where any order is made under this Code against a party and there upon any judgment is pronounced against such party and a decree is drawn up, such party may, in an appeal against the decree, contend that such order should not have been made and the judgment should not have been pronounced.

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(2) In an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not, have been recorded.”

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17 In Rule 3A of Order 23 CPC, there is specific bar on filing of suit to set aside a decree on the ground that compromise, on which decree is based, was not lawful. In this Rule, the bar does not operate to the parties to the lis only but also to others because it states unambiguously that no suit shall lie, but without restricting such bar to the parties only. Whereas, in other Rules, where some right or bar has been created in favour or against the party only, there is specific

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reference of party. Therefore, the bar for filing suit under Rule 3A of Order 23 CPC is applicable to the stranger also.

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18 Order 43 Rule 1(A) provides right to the party to the lis for filing the appeal. Therefore, right to appeal is not available to stranger under Order 43 Rule 1(A) of CPC to challenge the nonappealable order including the judgment and decree passed under Order 23 Rule 3 CPC on the basis of compromise.

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19 In A.R. Antulay v. R.S. Nayak and antoher, (1988) 2 SCC 602, the Supreme Court has held that the basic fundamentals of the administration of justice are that no man should suffer because of the mistake of the court. No man should suffer a wrong by technical procedure of irregularities. Rules or procedures are the handmaids of justice and not the mistress of the justice. Ex Debito justitiae, the court must do justice to him. If a man has been wronged, so long as it lies within the human machinery of administration of justice, that wrong must be remedied. An irregular order of a Court of unlimited jurisdiction can be set aside by it on application being made to that Court either under rules of court dealing expressly with setting aside orders for irregularity or ex debito justitiae if the circumstances warrant.

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20 In Indian Bank vs. Satyam Fibres (India) Pvt Ltd. reported in (1996)5 SCC 550 the Supreme Court has held as under:-

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“20. By filing letter No.2775 of 26.8.91 along with the Review Petition and contending that the other letter, namely, letter No.2776 of the even date, was never

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written or issued by the respondent, the appellant, in fact, raised the plea before the Commission that its judgment dated 16.11.93, which was based on letter No. 2776, was obtained by the respondent by practising fraud not only on the appellant but on the Commission too as letter No.2776 dated 26.8.91 was forged by the respondent for the purpose of this case. This plea could not have been legally ignored by the Commission which needs to be reminded that the Authorities, be they Constitutional, Statutory or Administrative, (and particularly those who have to decide a lis) possess the power to recall their judgments or orders if they are obtained by fraud as Fraud and Justice never dwell together (Fraus et jus nunquam cohabitant) . It has been repeatedly said that Fraud and deceit defend or excuse no man (Fraus et dolus nemini patrocinari debent).

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21. In Smith v. East Elloe Rural Distt. Council; 1956 AC 736 the House of Lords held that the effect of fraud would normally be to vitiate any act or order. In another case, Lazarus Estates Ltd. v. Beasley (1956)1 QB 702 (QB at p.712), Denning, L.J. said:

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“No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything.”

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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. Inherent powers are powers which are resident in all courts, especially of superior jurisdiction. These powers

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spring not from legislation but from the nature and the constitution of the tribunals or courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rules, protect its officers from indignity and wrong and to punish unseemly behaviour. This power is necessary for the orderly administration of the court’s business.

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23. 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 practized 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 (See. Benoy Krishna Mukerjee v. Mohanlal Goenka; AIR 1950 Cal.287; Gajanand Sha v. Dayanand Thakur AIR 1943 Pat.127; Krishnakumar v. Jawand Singh AIR 1947 Nagpur 236; Devendra Nath Sarkar v. Ram Rachpal Singh AIR 1926 Oudh 315; Saiyed Mohd. Raza v. Ram Saroop ILR (1929) 4 Lucknow 562; Bankey Behari Lal v. Abdul Rahman ILR (1932) 7 Lucknow 350; Lekshmi Amma Chack Amma v. Mammen Mammen 1955 Kerla LT 459.) The court has also the inherent power to set aise a sale brought about by fraud practised upon the court ( Ishwar Mahton v. Sitaram Kumar AIR 1954 Patna 450) or to set aside the order recording compromise obtained by fraud (Bindeshwar Pd. Chaudhary v. Debendra Pd. Singh AIR 1958 Patna 618; Tara Bai v. V.S. Krishnaswamy Rao AIR 1985 Kant 270.”

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21 In Budhia Swain and others v. Gopinath Deb and

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others, (1999) 4 SCC 396, the Supreme Court has held as under:

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“8. In our opinion a tribunal or a court may recall an order earlier made by it if

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(i) the proceedings culminating into an order suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent,

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(ii) there exists fraud or collusion in obtaining the judgment,

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(iii) there has been a mistake of the court prejudicing a party, or

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(iv) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented.

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The power to recall a judgment will not be exercised when the ground for re-opening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence.”

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22 The Supreme Court in United India Insurance Co. Ltd.

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v. Rajendra Singh and others, (2000) 3 SCC 581, has held as

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under:

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“16. Therefore, we have no doubt that the remedy to move for recalling the order on the basis of the newlydiscovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation. No court or

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tribunal 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 the claim.”

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23 In A.V. Papayya Sastry and others v. Govt. Of A.P. and others, (2007) 4 SCC 221, the Supreme Court held as under:

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“46. Keeping in view totality of facts and attending circumstances including serious allegations of fraud said to have been committed by the landowners in collusion with officers of the respondent Port Trust and Government, report submitted by the Central Bureau of Investigation (CBI), prima facie showing commission of fraud and initiation of criminal proceedings, etc. if the High Court was pleased to recall the earlier order by issuing directions to the authorities to pass an appropriate order afresh in accordance with law, it cannot be said that there is miscarriage of justice which calls for interference in exercise of discretionary and equitable jurisdiction of this Court. We, therefore, hold that this is not a fit case which calls for our intervention under Article 136 of the Constitution. We, therefore, decline to do so.”

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24 The Supreme Court in Deepa Gourang Murdeshwar Katre v. Principal, V.A.V. College of Arts and others, (2007) 14 SCC 108, has held as under:

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“33. It is well settled by catena of decisions of this Court that if a case of fraud or misrepresentation of such a dimension is discovered that the very basis of the order passed by a Court of law is affected, the Court can recall its order. The power to recall an order founded upon

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fraud and misrepresentation is an inherent power of the Court.”

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25 In similar situation, judgment of the Supreme Court in Triloki Nath Singh vs. Anirudh Singh (dead) through Legal Representatives and others reported in (2020)6 SCC 629 deals with same situation wherein it was observed and held as under:-

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“1. The question arises in the appeal for our consideration is as to whether the decree passed on a compromise can be challenged by the stranger to the proceedings in a separate suit.

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In other words, the appellant can only claim through his predecessor-Sampatiya, to the extent of rights and remedies available to Sampatiya in reference to the compromise decree. Merely because the appellant was not party to the compromise decree in the facts of the present case, will be of no avail to the appellant, much less give him a cause of action to question the validity of the compromise decree passed by the High Court by way of a substantive suit before the civil Court to declare it as fraudulent, illegal and not binding on him. Assuming, he could agitate about the validity of the compromise entered into by the parties to the partition suit, it is only the High Court, who had accepted the compromise and passed decree on that basis, could examine the same and no other Court under proviso to Rule 3 of Order 23 CPC. It must, therefore, follow that the suit instituted before the civil Court by the appellant was not maintainable in view of specific bar under Rule 3A of Order 23 CPC as held in the impugned judgment.”

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26 In aforesaid case also, compromise decree was passed by the High Court, and stranger/third party to compromise had assailed the compromise decree by filing the suit before the Sub Judge seeking declaration that compromise decree passed by the High Court was illegal, inoperative being obtained by fraud and misrepresentation. By referring provisions of Order 23 Rule 3(A) CPC and various judgments it was concluded that the only remedy available to a party, to a consent decree to avoid such consent decree, is to approach the Court which recorded the compromise and made a decree in terms of it. The suit filed by stranger, challenging the compromise decree passed by the High Court, was held not maintainable in view of specific bar under Rule 3A of Order 23 CPC.

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27 The Court, which passed the judgment and decree or an order, has inherent powers to recall the said order in case the Court is satisfied that the said judgment and decree or order has been obtained by fraud and concealment of material facts. Therefore, even if application is considered to be not maintainable under Order 23 Rule 3 CPC then also, for specific bar under Rule 3-A of Order 23 CPC for filing a suit coupled with the ratio of judgment passed in Triloki Nath Singh’s case, the application was to be filed before learned Single Judge for recalling the impugned judgment and decree, and in case there is no specific provision for that, the power of the Court under Section 151 CPC is not inhibited by any other provision if there

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is no such specific provision for filing application for recalling/setting aside the impugned judgment and decree.

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28 Mention of wrong provisions cannot be a valid ground for rejecting the application, particularly when Court has inherent power to recall the order.

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29 In view of above exposition of law and material and facts before us, we are of considered opinion that appeal is devoid of merit and accordingly dismissed. Needless to say that in civil suit, parties have every right to put-forth their claim and to rebut the claim of opposite party in accordance with law and suit is to be decided on its own merits by Trial Court.

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30 Observations made in appeal shall not have any bearing on merits of claim of parties.

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Pending miscellaneous application(s), if any, also stand disposed of accordingly.

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(Vivek Singh Thakur), Judge.

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3^rd April, 2025 (Ranjan Sharma, Judge.

Sardar Harjit Singh Kochhar v. Sardar Manjit Singh Kochhar

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Sardar Harjit Singh Kochhar v. Sardar Manjit Singh Kochhar

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