📖 S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1

A decree had been obtained by a party who suppressed a release deed by which he had given up his claim to the very property in suit. The Supreme Court set the decree aside and stated the principle without qualification. Fraud avoids all judicial acts, ecclesiastical or temporal. A judgment or decree obtained by playing a fraud on the court is a nullity and non est in the eyes of law, and such a judgment or 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, at any stage, even in collateral proceedings. A litigant who approaches the court must come with clean hands, and the non-disclosure of a relevant and material document with a view to obtaining an advantage amounts to fraud on the court.

Rule: the leading Indian authority. It establishes both the consequence, that the decree is a nullity, and the definition, that suppression of a material document to gain an advantage is itself fraud on the court.

§ Why the principle is stated so absolutely

Finality protects a decision, not a deception. The rules of res judicata, appeal and limitation exist so that a genuine adjudication is not endlessly reopened. They were never intended to protect a party who obtained the adjudication by misleading the court.

The court itself is the victim. Fraud on the court is not merely a wrong to the opposing party; it is an interference with the administration of justice, which is why the court may act even where the other party is content.

A nullity binds nobody. Because such a decree is treated as non est, it does not need to be set aside before it can be disregarded; its invalidity may be set up whenever it is sought to be enforced or relied upon.

Suppressing a material document with a view to obtaining an advantage

Leading evidence the other side says is untrue, on an issue the trial was there to decide

Misleading the court about a fact on which it acted, such as the existence of a prior order

A witness whose account the court preferred but which the losing party disputes

Fabricating or manipulating service, so that the other party never knew of the proceeding

A party's failure to produce a document he had, where the other side could have called for it and did not

Obtaining an ex parte order by concealing that a caveat was on record, or that an earlier application had been dismissed

An error of judgment by the court on the material before it

Impersonation, or a compromise recorded on behalf of a party by someone without authority

A decision that is merely wrong in law, however clearly

§ The distinction that decides most cases

Fraud on the court is not the same as perjury on a contested issue. A trial exists precisely to resolve conflicting accounts, and a party who loses on the evidence cannot reopen the matter by calling the other side's case false.

The line falls where the fraud prevented the court from adjudicating properly at all: where a material document was withheld so that the issue never arose, where service was faked so that one side never appeared, where the court was told something it had no means of testing and acted on it.

A useful test: did the fraud operate on the court's process, or merely within a contest the court conducted? The first vitiates; the second is what the trial was for.

§ Each layer of finality yields

• A decree or judgment. It is a nullity and may be disregarded by every court, superior or inferior.

• Res judicata. A decision obtained by fraud does not operate as res judicata, because the conditions of Section 11 presuppose a genuine adjudication, heard and finally decided.

• A compromise decree. Order XXIII Rule 3A bars a suit to set aside a decree on the ground that the compromise was not lawful, but it does not protect a decree procured by fraud on the court, which remains challengeable.

• An execution sale. Order XXI Rule 90 allows a sale to be set aside for fraud in publishing or conducting it, subject to proof of substantial injury; and a confirmed sale obtained by fraud on the court stands on the general principle.

• A foreign judgment. Section 13(e) expressly provides that a foreign judgment shall not be conclusive where it has been obtained by fraud.

• Limitation. Section 17 of the Limitation Act, 1963 postpones the running of time where the suit or application is based upon the fraud of the defendant, or where knowledge of the right was concealed by fraud, until the plaintiff has discovered it or could with reasonable diligence have discovered it.

An application to the same court to recall the decree, invoking Section 151

The usual course where the fraud appears on the record or can be shown without a trial, and the court that was deceived can act at once

A review under Section 114 with Order XLVII Rule 1

Where the fraud amounts to the discovery of new and important matter, or falls within any other sufficient reason, and the application is within thirty days under Article 124

A separate suit to set aside the decree

Where the fraud requires evidence to establish and cannot be shown summarily; Order XXIII Rule 3A does not bar a suit founded on fraud on the court

Resisting execution

Where the decree is set up in execution, its invalidity may be raised, since a nullity may be disregarded whenever it is sought to be enforced

In appeal or revision

As a ground of challenge to the decree, where the proceeding is otherwise available

Collateral proceedings

Chengalvaraya Naidu expressly permits the challenge even in collateral proceedings, because the decree is non est