2017 (1) TMI 1736 - SC - Indian Laws

Supreme Court affirms lower court rulings on Power of Attorney validity & fraud allegations

Harjas Rai Makhija (D) thr. L. Rs. Versus Pushparani Jain and Ors.

The Supreme Court upheld the lower courts' decisions in a case involving the validity of a Power of Attorney dated 30th April, 1983. The appellant failed ... Reopening of proceedings pertaining to the dismissal of his suit for specific performance - allotment of the suit property - prayer made in the plaint filed by Makhija was for a declaration that the decree dated 4th October, 1999 passed in favour of Pushparani was obtained in a fraudulent manner and is void and not worthy of being executed - HELD THAT:- When there is an allegation of fraud by non-disclosure of necessary and relevant facts or concealment of material facts, it must be inquired into. It is only after evidence is led coupled with intent to deceive that a conclusion of fraud could be arrived at. A mere concealment or non-disclosure without intent to deceive or a bald allegation of fraud without proof and intent to deceive would not render a decree obtained by a party as fraudulent. To conclude in a blanket manner that in every case where relevant facts are not disclosed, the decree obtained would be fraudulent, is stretching the principle to a vanishing point. What is fraud has been adequately discussed in MEGHMALA & ORS. VERSUS G. NARASIMHA REDDY & ORS. [2010 (8) TMI 922 - SUPREME COURT] - Unfortunately, this decision does not refer to earlier decisions where also there is an equally elaborate discussion on fraud. These two decisions are BHAURAO DAGDU PARALKAR VERSUS STATE OF MAHARASHTRA & ORS. [2005 (8) TMI 661 - SUPREME COURT] and STATE OF ORISSA AND ORS. VERSUS HARAPRIYA BISOI [2009 (4) TMI 1006 - SUPREME COURT]. There is no doubt that Makhija had an opportunity to prove the allegation of fraud when he filed an application under Order XLI Rule 27 of the Code of Civil Procedure. However, he missed that opportunity right up to this Court. Makhija took a second shot at alleging fraud and filing another suit against Pushparani. However, the evidence that he relied upon was very thin and could not even be considered as secondary evidence. Accordingly both the Trial Court as well as the High Court rejected the allegation of fraud by not accepting the evidence put forward by Makhija to allege that fraud had been committed by Pushparani when she obtained the decree dated 4th October, 1999. Fraud not having been proved but merely alleged, there are no reason to differ with the judgment and order passed by the High Court and the Trial Court. The appeal is dismissed with costs quantified at ₹ 50,000/-. Issues:1. Validity of Power of Attorney dated 30th April, 1983.2. Allegation of fraud in obtaining the decree dated 4th October, 1999.3. Admissibility of additional evidence under Order XLI Rule 27 of the Code of Civil Procedure.Validity of Power of Attorney dated 30th April, 1983:The case involved a dispute regarding the validity of a Power of Attorney dated 30th April, 1983, allegedly executed by the respondent in favor of her attorney. The appellant claimed that based on this Power of Attorney, an agreement for sale was entered into between the attorney and the appellant. However, the High Court found that the evidence presented, including a certified copy of the Power of Attorney, was not sufficient to establish the authenticity of the document. The High Court concluded that the appellant failed to prove that the attorney was authorized to enter into the agreement for sale on behalf of the respondent. The Supreme Court upheld this finding, emphasizing the importance of proving the authenticity of legal documents, especially in property transactions.Allegation of fraud in obtaining the decree dated 4th October, 1999:The appellant alleged fraud on the part of the respondent in obtaining the decree dated 4th October, 1999. The appellant contended that the respondent concealed the Power of Attorney executed in 1983, leading to a fraudulent decree. However, the courts noted that the appellant did not specifically allege fraud in the original suit and failed to provide sufficient evidence to support the fraud claim. The Supreme Court highlighted that mere concealment or non-disclosure without intent to deceive does not constitute fraud. The Court emphasized the need for clear evidence and intent to deceive to establish fraud in legal proceedings.Admissibility of additional evidence under Order XLI Rule 27 of the Code of Civil Procedure:The appellant sought to introduce additional evidence under Order XLI Rule 27 of the Code of Civil Procedure to support the authenticity of the Power of Attorney and allege fraud. However, the High Court dismissed the application, stating that the evidence presented was insufficient and did not establish fraud. The Supreme Court upheld this decision, emphasizing that the appellant had multiple opportunities to prove fraud but failed to provide compelling evidence. The Court reiterated the importance of proving fraud with clear intent and evidence, rather than mere allegations.In conclusion, the Supreme Court dismissed the appeal, affirming the lower courts' decisions. The Court emphasized the need for clear evidence and intent to deceive to establish fraud in legal proceedings. The appellant's failure to prove the authenticity of the Power of Attorney and establish fraud led to the dismissal of the appeal.