AI Drafter 
TaxTMI 
TaxTMI 
2009 (7) TMI 796
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.... which the petitioner was beneficially entitled. The petitioner claimed that the petitioner had caused certain shares in the relevant company to be purchased through respondent No. 5 broker company which was run and controlled by respondent No. 6 individual. The petition spoke of a purchase of 400 shares in the company from the NSE with which the broker was registered, against full payment of the market price thereof which had been tendered by the broker to the second respondent clearing house of the NSE. The petition proceeded to narrate that upon such 400 shares being sent to the company for registration of the transfer, 100 shares were returned on account of the transferor's signature not tallying. These 100 shares, according to the petition, were returned to the broker for replacement and were lodged with the applicants herein in October, 1997. The petitioner said that a further 300 shares in the same company were purchased by him through the broker and returned by the company on account of bad delivery, whereupon the petitioner sought replacement thereof from the NSE through the registered broker. The grievance in the petition was that such 400 shares in ITC Ltd., that had bee....
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....t is evident that the principal ground canvassed in the affidavit to deal with the petitioner's grievance was that despite request, the petitioner had not furnished the delivery number in respect of the transactions. The categorical assertion at both paragraph 10 and paragraph 18 of the applicants' affidavit was that the delivery number in the relevant document was not legible. The implication was that in the absence of the delivery number relating to the transactions, the faulty shares could not be located. The affidavit stand merely parroted the assertion made by the investor grievances cell of the NSE in its letter of October 13, 1998. The relevant paragraph from such letter recorded as follows : "However, we are in receipt of the copies of BDCIA, and Form No. 6B enclosed with your above said letter, but we regret to state that the delivery number is not legible on the photocopy of Form No. 6B, without which we are unable to locate the shares. You are therefore requested to either forward us fresh copies of Form No. 6B or let us know the delivery number in respect of 300 shares of ITC Ltd., which were lodged as bad delivery." 6. Upon the petition being taken up for hearing....
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....nsactions and to the proceedings was calculated to obtain an undue benefit for a declared defaulter and otherwise fitted to deceive. The applicants cry foul and say that fraud has been perpetrated on the court and on them by concealing the relevant data in the illegible copies of the documents that had been furnished prior to the order dated July 5, 1999, being made. The applicants insist that since fraud unravels everything, the conduct of the petitioner would warrant the order dated July 5, 1999, being recalled and strict measures being taken against the petitioner. 9. The applicants say that at the very least the consent or concession recorded in the order was given under a bona fide mistake that the transactions were entered into by the petitioner and the subsequent discovery, following the deposit of legible copies of the documents as required by the order, of the heinous conduct of the petitioner-or, more appropriately, through the instrumentality of the name-lender petitioner-would unbind the applicants from the consequence of the order. They say that a mistake of such nature is good ground for rescinding an agreement or avoiding the obligations under a concluded contract....
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....cation. 11. A judgment reported at [1897] 2 Ch. D 534 (Wilding v. Sanderson), is next placed by the applicants in their attempt to dislodge the order made at the suggestion of the parties to the writ petition. The principle enunciated by the Court of Appeal in such case was that an order made in an action by consent and based upon, and intended to carry out, an agreement arrived at between the parties, can be set aside on any ground on which an agreement in the terms of the order could be set aside; mistake being one of the available grounds. The relevant passage appears at pages 543-544 of the report : "A consent judgment or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the court. The fact of its being so expressed puts the parties in a different position from the position of those who have simply entered into an ordinary agreement. It is, of course, enforceable while it stands, and a party affected by it cannot, if he conceives he is entitled to relief from its operation, simply wait until it is sought to be enforced against him, and then raise by way of defence the matters....
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....lish Chief Justice were quoted in the opening sentence, "fraud avoids all judicial acts, ecclesiastical or temporal". The predecessor-in-interest of the respondent plaintiffs filed an application for final decree for partition and mesne profits. The appellant defendants contended that the preliminary decree had been obtained by fraud. The trial judge dismissed the application for grant of final decree. The plaintiffs successfully carried an appeal to the High Court where the principle of 'finality of litigation' weighed in the plaintiffs' favour. The High Court held that the conduct of the plaintiff, a benamidar, did not amount to collateral or extrinsic fraud as it was up to the defendants to plead and establish at the earlier stage that the plaintiff had no title to the suit properties ; that the plaintiff did not prevent the defendants by any contrivance or trick or deceit from raising the appropriate plea and adducing the requisite evidence ; and, that the parties were fighting at arm's length and it was the duty of each to traverse and question the allegations made by the other and discredit the claim or defence. In the appeal by certificate of the High Court, its judgment was....
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....entitled to had not been rectified or replaced by the stock exchange. The petitioner emphasises on the assertion in the letter of October 13, 1998, that the delivery number relating to one transaction was illegible in the document supplied and contends that the implication thereof was that the relevant shares could not be identified in the absence of the appropriate delivery number. 16. The petitioner relies on a judgment reported at [2001] 6 SCC 688 (Salkia Businessmen's Association v. Howrah Municipal Corporation) where it was held that the disposal of a petition in pursuance of a compromise memorandum made the terms of the memorandum binding even though such terms may not have been reproduced verbatim in the order of the High Court. It was observed that the terms of a compromise memorandum upon which a petition under article 226 of the Constitution is disposed of are not a mere matter of contract between the parties. In effect, the Supreme Court held that a writ petition disposed of on compromise could not be reopened for the purpose of going behind the order. Paragraph 8 of the report is apposite (page 691) : "8. We have carefully considered the submissions of learned sen....
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....eing received an order was made on July 30, 1999, the material portion whereof reads as follows : "In the meantime, operation of the order dated July 5, 1999, shall remain stayed. The petitioner, however, shall make over on or before Monday (August 2, 1999) within 4 p.m., the shares to the Registrar, original side of this court, and the Registrar, original side upon verification shall keep the same in a sealed cover. The petitioner shall make the shares to the Registrar, original side upon notice to the advocates for the respondent and advocates for the respondent shall be at liberty to be present at the time of such making over of the shares to the Registrar, original side, of this court. The Registrar, original side of this court shall make the sealed cover along with the shares available to this court, as and when so directed." 18. Whether the order was at the suggestion of the parties or it did not expressly refer to any consent, the hair-splitting exercise is an attempt at making a distinction without a difference. If the court accepts a suggestion from a party before it to make an order, the concession or consent embodied in the suggestion becomes binding on such party;....
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....otherwise follow the nature of the transactions. It is also significant that though their earlier affidavit referred to the alleged default committed by the broker (at paragraph 21 of their affidavit), the applicants did not harbour any doubt that the broker may have set up the petitioner to institute the proceedings. All the other details of the transactions were available with the applicants, or could have been available if they had been diligent. If, despite noticing that the transactions had been carried out through the alleged defaulting broker, the applicants did not question the bona fides of the transactions at the earlier stage and voluntarily conceded or consented to the order of July 5, 1999, being made, the subsequent receipt of the same documents that had been furnished earlier cannot be cited to undo the consequence of the consent order. The delivery numbers that the applicants could not gauge earlier and could only discern after legible copies of the documents had been furnished pursuant to the order, could not have directed the applicants to the alleged complicity between the petitioner and the broker. The other material already available prior to the order would ha....