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CASE NO.: Appeal (civil)  5097-5099 of 2004

PETITIONER: A.V. PAPAYYA SASTRY & ORS

RESPONDENT: GOVERNMENT OF A.P. & ORS

DATE OF JUDGMENT: 07/03/2007

BENCH: C.K. THAKKER & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T

C.K. THAKKER, J.

       All these appeals have been preferred by the  appellants against common judgment and order passed  in WAMP No. 1879 of 2001 in W.A. No. 109 of 1997,  WAMP No. 1880 of 2001 in W.A. No. 292 of 1998 and  Contempt Case No. 1008 of 2001. By the said order, the  High Court recalled common judgment and order passed  on April 27, 2000 in Writ Appeal Nos. 109 of 1997 and  292 of 1998. A direction was also issued to the  authorities under the Urban Land (Ceiling and  Regulation) Act, 1976 (hereinafter referred to as ’the  Ceiling Act’) to complete proceedings within the  stipulated period.         The case has a long and checkered history starting  from early seventies of the last century.  Appellants  herein are the owners of land bearing Survey Nos. 3/1,  3/2 and 4 admeasuring 18 acres, 39 cents of Village  Kancharapalem, District Visakhapatnam. It was their  case that Visakhapatnam Port Trust (’Port Trust’ for  short) wanted to acquire land for public purpose,  namely, for construction of quarters for its employees.  The Chairman of the Port Trust, therefore, sent a  requisition letter to the District Collector,  Visakhapatnam for acquiring land admeasuring 45  acres, 33 cents of Survey Nos. 1, 2, 3 and 4 of  Kancharapalem Village. Advance possession of the land  of the appellants, bearing Survey Nos. 3/1, 3/2 and 4  admeasuring 18 acres, 39 cents was taken over by the  Estate Manager of the Port Trust on August 29, 1972 by  private negotiations. The State Authorities, thereafter,  were requested by the Port Trust Authorities to take  appropriate proceedings for acquisition of land under the  Land Acquisition Act, 1894. According to the appellants,  in the statement recorded on August 29, 1972, Akella  Suryanarayana Rao stated that he had handed onver  possession of the land to the Estate Manager of the Port  Trust.  Mr. Akella also stated that there was a dispute  regarding land with tenant Koyya Gurumurthy Reddy  under Andhra Pradesh Lands Tenancy Act. It was also  the case of the appellants that the Port Trust deposited  with the Government the amount of compensation  payable to the owners of the land. The land acquisition  proposals were approved by the Port Trust as also by the  Government of India.         It was further case of the appellants that a  preliminary notification under sub-section (1) of Section

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4 of the Land Acquisition Act was for the first time  issued on August 10, 1973 but nothing further was done  in the matter.  The Ceiling Act came into force in the  State of Andhra Pradesh on February 17, 1976. It, inter  alia, covered the Visakhapatnam Urban Agglomeration.  The appellants filed their declarations taking the stand  that possession of land had already been handed over to  Port Trust Authorities even before the Act came into  force and the provisions of the Ceiling Act, therefore,  would not apply to such land. In the light of the above  factual position and the case of the appellants, the  Special Officer and Competent Authority, Urban Land  Ceiling, Visakhapatnam vide his order dated May 25,  1981 in C.C. No. 6143 of 1976 declared that the land- owners of Survey Nos. 3/1, 3/2 and 4 were ’non-surplus  land holders’. Then the Government again issued  notification under sub-section (1) of Section 4 of the Act  on August 29, 1981. Urgency clause under Section 17(4)  was not invoked since the possession of land was already  with the Port Trust Authorities.  A declaration under  Section 6 was issued on October 12, 1982.  No award,  however, was passed.         According to the appellants, the Chief Engineer of  Port Trust in reply to a query by the Land Acquisition  Officer, clarified vide his letter dated December 19, 1985  that actual and physical possession of the land was not  taken by Port Trust as the tenant did not vacate  possession of the land. It appears that in view of the  above letter that physical possession of land was not  with the Port Trust Authorities, the Special Officer and  Competent Authority, Urban Land Ceiling,  Visakhapatnam referred the matter to the  Commissioner, Land Reforms and Urban Land Ceiling,  Government of Andhra Pradesh, Hyderabad in February,  1987 to take up the matter under Section 34 of the  Ceiling Act in suo motu revision. The Collector,  Visakhapatnam also vide his D.O. letter No. 433/78,  dated June 27, 1987 requested the Commissioner to  reopen the case and start enquiry. On August 21, 1989,  Chairman, Visakhapatnam Port Trust addressed a letter  to the Commissioner, Land Reforms & Urban Land  Ceiling, Government of A.P. categorically stating that  land admeasuring 18 acres, 39 cents of Survey Nos. 3/1,  3/2 and 4 of Kancherapalem village had already been  taken over by the Port Trust and there was no cause to  reopen the case under Section 34 of the Ceiling Act.   Once again, the Government approved the proposal for  acquisition of land and notification under Section 4(1) of  the Land Acquisition Act was issued on May 17, 1991.         It appears that the proceedings for reopening of the  case by invoking Section 34 of the Ceiling Act were  initiated. On July 20, 1994, notice was issued to the  owners to show cause as to why revisional powers  should not be exercised and the order passed by the  Special Officer and Competent Authority under the  Ceiling Act should not be set aside. It was also stated in  the notice that it was brought to the notice of the  Government that title to the land was undisputedly with  the declarants on the appointed day under the Ceiling  Act as the Land Acquisition Proceedings were not  concluded by that date.  As such land was required to be  computed in the holdings of the declarants even if it was  admitted by the Port Trust Authorities that they were in  possession of the land in 1972.  The land-owners  submitted the reply to the notice.

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       Meanwhile, however, the land-owners filed a  petition being Writ Petition No. 11754 of 1994 praying  therein that the High Court may direct the State  Authorities to complete proceedings under the Land  Acquisition Act and pass an award. During the pendency  of the writ petition the revision was allowed by the State  Government under Section 34 of the Ceiling Act on  January 20, 1995 and the order passed by the Special  Officer and Competent Authority, Urban Land Ceiling,  Visakhapatnam declaring that the appellants had no  surplus land had been set aside. The appellants,  therefore, filed another petition, being Writ Petition No.  3102 of 1995 questioning the legality of the order passed  in revision. The learned single Judge allowed both the  petitions i.e. Writ Petition Nos. 11754 of 1994 and 3102  of 1995 and by order dated June 4, 1996 directed the  authorities to complete Land Acquisition Proceedings  and pass award within three months. The learned single  Judge also held that the order under the Ceiling Act was  passed by the Special Officer and Competent Authority,  Urban Land Ceiling, Visakhapatnam in 1981 while suo  motu revisional powers were exercised in 1994-95 i.e.  after thirteen years. Such action was, therefore, illegal,  unlawful and unwarranted. Accordingly, the order  passed in revision was set aside. Writ appeals filed by  the State were dismissed. A direction was issued by the  Division Bench to fix market value on the basis of  notification under Section 4(1) issued on May 17, 1991.  Special Leave Petition (Civil) Nos. 14860-14861 of 2000  filed by the State Authorities were dismissed by this  Court on October 20, 2000.          The State Authorities, thereafter, filed recall- applications on June 13, 2001. In the recall applications,  it was stated inter alia that fraud was committed by the  land-owners and material facts were suppressed by  them. It was alleged that possession of land was never  handed over to Port Trust Authorities, nor Port Trust  Authorities received such possession of land and yet it  was asserted by the owners that possession of land was  given to Port Trust Authorities in 1972 which was not  correct. It was only in December, 1985 that the correct  fact came to the knowledge of the State Authorities from  a letter by the Chief Engineer of Port Trust. Hence, the  order was taken in suo motu revision under Section 34 of  the Ceiling Act. It was further stated that even if the Port  Trust Authorities would be deemed to be in possession of  land on the day the Ceiling Act came into force, Land  Acquisition Proceedings were not concluded and no  award was passed. The Port Trust Authorities, in the  circumstances, would be in possession of the land for  and on behalf of the land-owners and the land was  required to be declared surplus and vacant under the  Ceiling Act.         It was further averred that the High Court ordered  inquiry by the Central Bureau of Investigation (CBI) and  Mr. Y. Anil Kumar, IPS, Superintendent of Police, CBI,  Visakhapatnam submitted a detailed report in the High  Court when the Writ Appeals were placed for hearing.   Unfortunately, however, the attention of the Court was  never invited to the said report which clearly revealed  that there was total fraud on the part of the land-owners  in collusion with Port Trust Officers as also Officers  acting under the Ceiling Act. It was, therefore, submitted  that the orders passed by the Division Bench on April  27, 2000 was required to be recalled by directing the

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authorities under the Ceiling Act to conclude  proceedings.         The High Court, after hearing the learned counsel  for the parties and considering the records and  proceedings including the report submitted by CBI, held  that the case was of a fraud and by suppressing material  facts, several orders were passed and actions were  taken. In view of correct and true facts and reports  which clearly established that the authorities were  misled, that proceedings were initiated to revise the  order, dated May 25, 1981. The Court, therefore, held  that the order dated April 27, 2004 passed by the  Division Bench was required to be recalled and recall  applications were allowed.          The Court therefore passed the following order;         "Considering all the aspects as stated  above, we are of the considered view that the  recall petitions have to be allowed.  Accordingly we allow the recall petitions by  setting aside the common judgment passed in  the aforesaid writ appeals.

       We further direct that the proceedings  under ULC Act have to be completed within a  period of one month from the date of receipt  of this order by the concerned authorities by  giving opportunity to the petitioners and  respondents herein to put forward their cases  and after final decision is taken by the  authorities under ULC Act, the further  proceedings have to be initiated under Land  Acquisition Act depending upon the result  under the ULC Act.  The proceedings under  the Land Acquisition Act if initiated,  compensation to be awarded to the  respondents herein within a period of three  months from the date of order of the  authorities under the ULC Act. The Land  Acquisition Officer is also directed to consider  the legal date of possession of the land taken  by the VPT Authorities after conclusion of the  enquiry under the ULC Act".

       The appellants have challenged the aforesaid order  of the High Court. On August 5, 2002, notice was issued  by this Court. Affidavits and counter affidavits were filed.  On August 6, 2004, leave was granted and hearing was  expedited and the matters were placed before us for final  hearing.         We have heard learned counsel for the parties.         Mr. K.K. Venugopal, Senior Advocate, appearing for  the appellants contended that the High Court committed  an error in law in passing the impugned order. It was  clear from the evidence on record and various  communications that before the proposal was submitted  by the Port Trust Authorities for acquisition of land for a  public purpose (construction of quarters for its  employees), advance possession of land had been taken  over by Port Trust Authorities and land-owners were not  in possession of the property. The said fact was noted by  the Special Officer and Competent Authority, Urband  Land Ceiling, Visakhapatnam and an order was passed  in May, 1981 that the appellants were ’not surplus land  owners’. In or about 1985, however, there appeared to be  encroachment over the land and some officers of the Port

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Trust, with a view to save their skin, wrote a letter on  December 19, 1985 that the possession of land had not  been handed over to Port Trust Authorities since tenants  were occupying the land. The said statement was not  correct and could not have been considered for initiating  proceedings under the Ceiling Act. It was also submitted  by the counsel that suo motu power was sought to be  exercised after a decade. As per settled law, revisional  powers should be exercised within ’reasonable time’. By  no stretch of imagination, more than ten years can be  said to be ’reasonable time’. According to the learned  counsel, learned single Judge was wholly justified in  allowing both the writ petitions filed by the land-owners  and in issuing directions, namely, (i) to complete land  acquisition proceedings and pass award; and (ii) exercise  of revisional powers after about thirteen years was  wholly unwarranted. The said order was confirmed by  the Division Bench in Writ Appeals. Special Leave  Petitions were also dismissed by this Court. After  dismissal of Special Leave Petitions, neither it was open  to the authorities to make an application for recalling  earlier orders as has been done in June, 2001, nor it was  permissible for the Court to grant such relief. It was also  submitted that the Division Bench, while dealing with  Writ Appeals took note of the fact that the land was  ’agricultural land’ and was having fruit bearing trees i.e.  a garden land. The said finding had not been disturbed  even by this Court in SLPs. The Division Bench ought to  have taken into account that fact as well.  By not doing  so, an illegality had been committed and the order  deserves to be set aside.         The learned counsel for the State Authorities as  also Port Trust Authorities supported the order passed  by the High Court and action of recalling of the order  dated April 27, 2000. It was submitted that the  authorities proceeded on the basis that advance  possession of the land was given by land-owners to Port  Trust Authorities in August, 1972. But the statement  was not correct and the authorities were misled. The  order passed by the Special Officer and Competent  Authority under the Ceiling Act declaring that the  owners did not possess surplus land was founded on the  above statement that the land-owners were not in  possession of land, which was false. But even otherwise,  the order passed by the Special Officer and Competent  Authority was not in consonance with law inasmuch as  even if the owners were not in possession of land,  proceedings under the Land Acquisition Act were not  finalized. The legal position is that the ownership of the  land-owners continued and in the eye of law, Port Trust  Authorities remained in possession for and on behalf of  the land-owners. It was, therefore, incumbent on Special  Officer and Competent Authority under the Ceiling Act to  declare land to be excess and surplus under the Ceiling  Act so that appropriate consequential action could be  taken. No such action, however, was taken. Moreover, it  was made clear by the Chief Engineer, Port Trust vide  his letter dated December 19, 1985 that actual and  physical possession of land was never taken by Port  Trust Authorities as it remained with tenants and  disputes were going on. The matter, therefore, required  detailed investigation.         The CBI made an enquiry and the report was  submitted by the Police Inspector which revealed  startling facts. From the report, it is clear that fraud was

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committed by the land owners in collusion with officers  of the respondents. Criminal proceedings were also  initiated and they are pending. It was, therefore,  submitted that the High Court was right in recalling its  earlier order.         Regarding non-applicability of the provisions of the  Ceiling Act as the land being garden land and hence  agricultural land under the Ceiling Act, it was submitted  that it was never the case of the land-owners when  proceedings under the Ceiling Act had been initiated that  the Act would not apply because the land was used for  agriculture. The sole ground put forward by the land-  owners was that possession of land had already been  given to Port Trust Authorities and hence the Ceiling Act  had no application. It was, therefore, submitted that the  appeals deserve to be dismissed and the impugned order  calls for no interference.         Having given anxious consideration to the rival  contentions of the parties, in our opinion, no case has  been made out by the appellants for interference with  the order passed by the High Court allowing the  applications and recalling earlier order. The High Court  has considered the matter in detail. The case of land-  owners was that advance possession was taken over by  Port Trust Authorities in August, 1972. The subsequent  facts and letter by Chief Engineer of Port Trust in 1985  clearly revealed that it was not so. Possession of land  was never with the land owners and was not given to  Port Trust Authorities. From the record it is clear that  neither the land-owners nor the Port Trust Authorities  were in actual or physical possession of land, but it was  occupied by tenants and disputes were also going on  between the tenants and land owners. Therefore, the  basis on which the Special Officer and Competent  Authority, Urban Land Ceiling proceeded to decide the  matter was non-existent and non est.         In our opinion, the learned counsel for the  respondents are also right in submitting that even if the  statement of land-owners and Port Trust Authorities is  believed and it is held that actual and physical  possession of land was handed over by land-owners and  taken over by Port Trust Authorities, it does not change  the legal position. It was not the case of land-owners  themselves that proceedings under the Land Acquisition  Act were finalized and award was passed. From the  record, it is clear that no notification under the Land  Acquisition Act was issued in 1972. Such notifications  were issued subsequently in the years 1973, 1981, 1991  and 1996. At more than one occasion, notifications were  issued only because the proceedings were not finalized  and award was not passed. It is also clear that in the  writ petitions filed by the land-owners in 1994-95, a  single Judge of the High Court directed the authorities to  complete land acquisition proceedings by initiating fresh  action commencing from issuance of notification under  Section 4(1) of the Act and to complete them within a  period of three months. In our opinion, therefore, the  High Court was right in holding that the provisions of  the Act would apply to the land and Special Officer and  Competent Authority, Urban Land Ceiling was wholly  wrong in excluding the land said to have been in  possession of the Port Trust Authorities.         We are further of the view that the State  Government, in the facts and circumstances of the case,  was right in exercising revisional jurisdiction under

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Section 34 of the Act. Mr. Venugopal is indeed right in  submitting that even though no period of limitation is  prescribed for exercise of revisional jurisdiction by the  State Government suo motu, such power must be  exercised within a reasonable time [vide State of Gujarat  v. Patel Raghav Natha, (1969) 2 SCC 187]. But taking  into account the facts and circumstances in their  entirety and in particular, a letter of Chief Engineer,  Visakhapatnam Port Trust of December 19, 1985, it  cannot be said that the power had not been exercised  within a reasonable period. It is also pertinent to note  that the subsequent development shows as to how some  of the Officers of the Port Trust were parties to fraud said  to have been committed by land-owners. In this  connection, the respondents are right in inviting our  attention to a letter dated August 21, 1989 by the Port  Trust Authorities to the Commissioner of Land Reforms  stating therein that the Government intended to exercise  suo motu power under Section 34 of the Act but there  was no necessity to reopen proceedings and suitable  directions were required to be issued to District  Collector, Visakhapatnam to pass an award in respect of  land sought to be acquired under the Land Acquisition  Act. In view of these developments, in our opinion, the  High Court was fully justified in recalling the earlier  order.         The High Court has dealt with the contention  regarding fraud said to have been committed by land-  owners in collusion with officers of the respondents.  It is  stated as to how the High Court ordered CBI enquiry on  prima facie satisfaction that there was a fraud and report  was submitted by Mr. Y. Anil Kumar, IPS,  Superintendent of Police, CBI, Visakhapatnam. In the  said report, CBI had stated that possession was never  taken over by the Port Trust Authorities and tenancy  cases were pending. Even if there was transfer of  possession, it was in violation of the Andhra Pradesh  Vacant Lands in Urban Areas (Prohibition of Alienation)  Act, 1972 which came into force on June 5, 1972. (It  may be recalled that according to the land owners as  well as Port Trust Authorities, possession was taken over  by the Port Trust by private negotiations on August 29,  1972). CBI, therefore, observed that transfer of  possession in favour of Port Trust did not constitute legal  transfer under 1972 Act. CBI also noted that  proceedings under the Andhra Pradesh Tenancy Act  were pending.         Now, it is well settled principle of law that if any  judgment or order is obtained by fraud, it cannot be said  to be a judgment or order in law. Before three centuries,  Chief Justice Edward Coke proclaimed;          "Fraud avoids all judicial acts,  ecclesiastical or temporal".

It is thus settled proposition of law that a  judgment, decree or order obtained by playing fraud on  the Court, Tribunal or Authority is a nullity and non est  in the eye of law. Such a judgment, decree or order \027by  the first Court or by the final Court\027 has to be treated  as nullity by every Court, superior or inferior. It can be  challenged in any Court, at any time, in appeal, revision,  writ or even in collateral proceedings.          In the leading case of Lazarus Estates Ltd. v.  Beasley, (1956) 1 All ER 341 : (1956) 1 QB 702 : (1956) 2  WLR 502, Lord Denning observed:

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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."  

       In Duchess of Kingstone, Smith’s Leading Cases,  13th Edn., p.644, explaining the nature of fraud, de Grey,  C.J. stated that though a judgment would be res judicata  and not impeachable from within, it might be  impeachable from without. In other words, though it is  not permissible to show that the court was ’mistaken’, it  might be shown that it was ’misled’. There is an essential  distinction between mistake and trickery. The clear  implication of the distinction is that an action to set  aside a judgment cannot be brought on the ground that  it has been decided wrongly, namely, that on the merits,  the decision was one which should not have been  rendered, but it can be set aside, if the court was  imposed upon or tricked into giving the judgment.         It has been said; Fraud and justice never dwell  together (fraus et jus nunquam cohabitant); or fraud and  deceit ought to benefit none (fraus et dolus nemini  patrocinari debent).         Fraud may be defined as an act of deliberate  deception with the design of securing some unfair or  undeserved benefit by taking undue advantage of  another.  In fraud one gains at the loss of another.  Even  most solemn proceedings stand vitiated if they are  actuated by fraud.  Fraud is thus an extrinsic collateral  act which vitiates all judicial acts, whether in rem or in  personam.  The principle of ’finality of litigation’ cannot  be stretched to the extent of an absurdity that it can be  utilized as an engine of oppression by dishonest and  fraudulent litigants.         In S.P. Chengalvaraya Naidu (dead) by LRs. V.  Jagannath (dead) by LRs. & Ors. (1994) 1 SCC 1 : JT  1994 (6) SC 331, this Court had an occasion to consider  the doctrine of fraud and the effect thereof on the  judgment obtained by a party. In that case, one A by a  registered deed, relinquished all his rights in the suit  property in favour of C who sold the property to B.  Without disclosing that fact, A filed a suit for possession  against B and obtained preliminary decree. During the  pendency of an application for final decree, B came to  know about the fact of release deed by A in favour of C.  He, therefore, contended that the decree was obtained by  playing fraud on the court and was a nullity. The trial  court upheld the contention and dismissed the  application. The High Court, however, set aside the order  of the trial court, observing that "there was no legal duty  cast upon the plaintiff to come to court with a true case  and prove it by true evidence". B approached this Court.          Allowing the appeal, setting aside the judgment of  the High Court and describing the observations of the  High Court as ’wholly perverse’, Kuldip Singh, J. stated: "The courts of law are meant for imparting  justice between the parties. One who comes to  the court, must come with clean-hands. We  are constrained to say that more often than  not, process of the court is being abused.  Property-grabbers, tax- evaders, bank-loan- dodgers and other unscrupulous persons  from all walks of life find the court - process a  convenient lever to retain the illegal-gains  indefinitely. We have no hesitation to say  that a person, who’s case is based on

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falsehood, has no right to approach the  court. He can be summarily thrown out at  any stage of the litigation".                    (emphasis supplied)

The Court proceeded to state: "A litigant, who  approaches the court, is bound to produce all the  documents executed by him which are relevant to the  litigation. If he withholds a vital document in order to  gain advantage on the other side then he would he guilty  of playing fraud on the court as well as on the opposite  party". The Court concluded: "The principle of ’finality of  litigation’ cannot be pressed to the extent of such an  absurdity that it becomes an engine of fraud in the  hands of dishonest litigants". In Indian Bank v. Satyam Fibres (India) Pvt. Ltd.,  (1996) 5 SCC 550 : JT 1996 (7) SC 135, referring to  Lazarus Estates and Smith v. East Elloe Rural District  Council, 1956 AC 336 : (1956) 1 All ER 855 : (1956) 2  WLR 888, this Court stated; "The judiciary in India also possesses  inherent power, specially under Section 151  C.P.C., 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 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". (emphasis supplied)

In United India Insurance Co. Ltd. v. Rajendra Singh  & Ors., (2000) 3 SCC 581 : JT 2000 (3) SC 151, by  practising fraud upon the Insurance Company, the  claimant obtained an award of compensation from the  Motor Accident Claims Tribunal.  On coming to know of  fraud, the Insurance Company applied for recalling of  the award.  The Tribunal, however, dismissed the  petition on the ground that it had no power to review its  own award.  The High Court confirmed the order.  The  Company approached this Court. Allowing the appeal and setting aside the orders,  this Court stated; "It is unrealistic to expect the appellant  company to resist a claim at the first instance  on the basis of the fraud because appellant  company had at that stage no knowledge  about the fraud allegedly played by the  claimants. If the Insurance Company comes  to know of any dubious concoction having  been made with the sinister object of  extracting a claim for compensation, and if by  that time the award was already passed, it  would not be possible for the company to file

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a statutory appeal against the award. Not only  because of bar of limitation to file the appeal  but the consideration of the appeal even if the  delay could be condoned, would be limited to  the issues formulated from the pleadings  made till then. Therefore, we have no doubt that the  remedy to move for recalling the order on the  basis of the newly discovered facts amounting  to fraud of high degree, cannot be foreclosed  in such a situation. No Court or 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. The allegation made by the appellant  Insurance Company, that claimants were not  involved in the accident which they described  in the claim petitions, cannot be brushed  aside without further probe into the matter,  for, the said allegation has not been  specifically denied by the claimants when  they were called upon to file objections to the  applications for recalling of the awards.  Claimants then confined their resistance to  the plea that the application for recall is not  legally maintainable. Therefore, we strongly  feel that the claim must be allowed to be  resisted, on the ground of fraud now  alleged by the Insurance Company. If we  fail to afford to the Insurance Company  an opportunity to substantiate their  contentions it might certainly lead to  serious miscarriage of justice".  (emphasis supplied) Mr. Venugopal, no doubt, contended that when the  order passed by the earlier Division Bench was not  interfered with by this Court and SLPs were dismissed, it  was not open to the High Court thereafter to entertain  recall-applications and grant the relief of recalling of  earlier orders. According to him, such an exercise of  power was unlawful and abuse of process of law.  In this connection, our attention has been invited  by the learned counsel to a decision of this Court in  Abbai Maligai Partnership Firm & Anr. v. K.  Santhakumaran & Ors., (1998) 7 SCC 386 : JT 1998 (6)  SC 396. In that case, after dismissal of Special Leave  Petition by this Court, review petition was entertained by  the High Court and earlier judgment was recalled. When  the matter reached this Court, setting aside the order  passed by the High Court, the Court observed: "The manner in which the learned Single  Judge of the High Court exercised the review  jurisdiction, after the special leave petitions  against the self-same order had been  dismissed by this court after hearing learned  counsel for the parties, to say the least, was  not proper. Interference by the learned single  Judge at that stage is subversive of judicial  discipline. The High Court was aware that  SLPs against the orders dated 7.1.87 had  already been dismissed by this court. This  High Court, therefore, had no power or  jurisdiction to review the self same order,

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which was the subject matter of challenge in  the SLPs in this court after the challenge had  failed. By passing the impugned order on  7.4.1994, judicial propriety has been  sacrificed. After the dismissal of the special  leave petitions by this court, on contest, no  review petitions could be entertained by the  High Court against the same order. The very  entertainment of the review petitions, in the  facts and circumstances of the case was an  affront to the order of this Court. We express  our strong disapproval and hope there would  be no occasion in the future when we may  have to say so. The jurisdiction exercised by  the High Court, under the circumstances, was  palpably erroneous. The respondents who  approached the High Court after the dismissal  of their SLPs by this court, abused the  process of the court and indulged in vexatious  litigation. We strongly depricate the  manner in which the review petitions were  filed and heard in the High Court after  the dismissal of the SLPs by this court."  (emphasis supplied)

The respondents, on the other hand, placed  reliance upon Kunhayammed & Ors. v. State of Kerala &  Anr., (2000) 6 SCC 359 : JT 2000 (9) SC 110, wherein  this Court had an occasion to consider the application of  the doctrine of merger to orders passed by this Court  while exercising jurisdiction under Article 136 of the  Constitution. The Court there observed that exercise of  jurisdiction by this Court under Article 136 is in two  stages; (i) granting of a special leave to appeal; and (ii)  hearing of appeal. The Court went on to observe that the  doctrine of merger does not apply to first stage i.e. at the  stage of granting of special leave to appeal. It applies  only at the second stage of hearing of appeals. The Court  in the light of above position, laid down the following  principles: (i) Where an appeal or revision is provided  against an order passed by a court, tribunal  or any other authority before superior forum  and such superior forum modifies, reverses or  affirms the decision put in issue before it, the  decision by the subordinate forum merges in  the decision by the superior forum and it is  the latter which subsists, remains operative  and is capable of enforcement in the eye of  law. (ii) The jurisdiction conferred by Article 136 of  the Constitution is divisible into two stages.  First stage is upto the disposal of prayer for  special leave to file an appeal. The second  stage commences if and when the leave to  appeal is granted and special leave petition is  converted into an appeal. (iii) Doctrine of merger is not a doctrine of  universal or unlimited application. It will  depend on the nature of jurisdiction exercised  by the superior forum and the content or  subject-matter of challenge laid or capable of  being laid shall be determinative of the  applicability of merger. The superior  jurisdiction should be capable of reversing,

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modifying or affirming the order put in issue  before it. Under Article 136 of the  Constitution the Supreme Court may reverse,  modify or affirm the judgment-decree or order  appealed against while exercising its appellate  jurisdiction and not while exercising the  discretionary jurisdiction disposing of petition  for special leave to appeal. The doctrine of  merger can therefore be applied to the former  and not to the latter. (iv) An order refusing special leave to appeal  may be a non-speaking order or a speaking  one. In either case it does not attract the  doctrine of merger. An order refusing special  leave to appeal does not stand substituted in  place of the order under challenge. All that it  means is that the Court was not inclined to  exercise its discretion so as to allow the  appeal being filed. (v) If the order refusing leave to appeal is a  speaking order, i.e. gives reasons for refusing  the grant of leave, then the order has two  implications. Firstly, the statement of law  contained in the order is a declaration of law  by the Supreme Court within the meaning of  Article 141 of the Constitution. Secondly,  other than the declaration of law, whatever is  stated in the order are the findings recorded  by the Supreme Court which would bind the  parties thereto and also the court, tribunal or  authority in any proceedings subsequent  thereto by way of judicial discipline, the  Supreme Court being the apex court of the  country. But, this does not amount to saying  that the order of the court, tribunal or  authority below has stood merged in the order  of the Supreme Court rejecting special leave  petition or that the order of the Supreme  Court is the only order binding as res judicata  in subsequent proceedings between the  parties, (vi) Once leave to appeal has been granted  and appellate jurisdiction of Supreme Court  has been invoked the order passed in appeal  would attract the doctrine of merger; the  order may be of reversal, modification or  merely affirmation. (vii) On an appeal having been preferred or a  petition seeking leave to appeal having been  converted into an appeal before Supreme  Court the jurisdiction of High Court to  entertain a review petition is lost thereafter as  provided by Sub-rule (1) of Rule (1) of Order  47 of the C.P.C. In Kunhayammed, Abbai Maligai was considered  and it was observed that in the facts and circumstances  of that case, this Court did not approve the order passed  by the High Court. The Court noted that in Abbai  Maligai, this Court did not consider the doctrine of  merger. According to the Court, a careful reading of  Abbai Maligai "brings out the correct statement of law  and fortifies us in taking the view" as taken. [see also S.  Shanmugavel Nadar v. State of T.N. & Anr., (2002) 8 SCC  361 : JT 2002 (7) SCC 568]. The matter can be looked at from a different angle

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as well.  Suppose, a case is decided by a competent  Court of Law after hearing the parties and an order is  passed in favour of the applicant/plaintiff which is  upheld by all the courts including the final Court.  Let us  also think of a case where this Court does not dismiss  Special Leave Petition but after granting leave decides  the appeal finally by recording reasons.  Such order can  truly be said to be a judgment to which Article 141 of the  Constitution applies.  Likewise, the doctrine of merger  also gets attracted.  All orders passed by the  courts/authorities below, therefore, merge in the  judgment of this Court and after such judgment, it is not  open to any party to the judgment to approach any court  or authority to review, recall or reconsider the order. The above principle, however, is subject to  exception of fraud.  Once it is established that the order  was obtained by a successful party by practising or  playing fraud, it is vitiated.  Such order cannot be held  legal, valid or in consonance with law.  It is non-existent  and non est and cannot be allowed to stand.  This is the  fundamental principle of law and needs no further  elaboration.  Therefore, it has been said that a judgment,  decree or order obtained by fraud has to be treated as  nullity, whether by the court of first instance or by the  final court.  And it has to be treated as non est by every  Court, superior or inferior. Hence, the argument of Mr. Venugopal cannot be  upheld.  Even if he is right in submitting that after  dismissal of SLPs, the respondent herein could not have  approached the High Court for recalling its earlier order  passed in April, 2000 and the High Court could not have  entertained such applications, nor the recalling could  have been done, in the facts and circumstances of the  case and in the light of the finding by the High Court  that fraud was committed by the land-owners in  collusion with the officers of the Port Trust Authorities  and Government, in our considered view, no fault can be  found against the approach adopted by the High Court  and the decision taken.  The High Court, in our opinion,  rightly recalled the order, dated April 27, 2000 and  remanded the case to the authorities to decide the same  afresh in accordance with law. Mr. Venugopal also submitted that the Division  Bench of the High Court in an order dated April 27, 2000  observed that the land being a garden land having fruit  bearing trees which had been cultivated by a tenant, it  did not fall within the description of ’urban land’ or  ’vacant land’ within the meaning of Section 2(o) or 2(q) of  the Ceiling Act and the said aspect had not been gone  into at all by the State Government. The High Court  thereafter considered the provisions of the Ceiling Act  and held that the land was agricultural land and  required to be excluded from the operation of the Ceiling  Act. As to the above, we may only observe that it was  never the case of land-owners while filling a form under  Section 6 of the Act that the provisions of the Act were  not applicable to the land in question because the land  was used for agriculture or horticulture purposes or that  it was having fruit bearing trees. The exclusion or non- operation of the Act was sought only on the ground that  the possession of the land had already been handed over  to Port Trust Authorities in 1972 and hence the land  cannot become subject matter of the Ceiling Act. In view  of the above fact, in our opinion, the High Court was

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right in passing the impugned order directing the  authorities to consider all aspects and pass an  appropriate order in accordance with law. Last but not the least. We are exercising  jurisdiction under Article 136 of the Constitution. It is  discretionary and equitable in nature.? Clause (1) of the  said Article confers very wide and extensive powers on  this Court to grant special leave to appeal against any  judgment, decree, determination, sentence or order in  any cause or matter passed or made by any Court or  Tribunal in India. The Article commences with a non- obstante clause, "Notwithstanding anything in this  Chapter" (i.e. Chapter IV of Part V). These words are of  overriding effect and clearly indicate the intention of the  Framers of the Constitution that it is a special  jurisdiction and a residuary power unfettered by any  statute or other provisions of Chapter IV of Part V of the  Constitution. It is extraordinary in its amplitude. Its  limit, when it chases injustice, is the sky. Such power,  therefore, may be exercised by this Court whenever and  wherever justice demands intervention by the highest  Court of the country. Article 136, however, does not confer a right of  appeal on any party. It confers discretion on this Court  to grant leave to appeal in appropriate cases. In other  words, the Constitution has not made the Supreme  Court a regular Court of Appeal or a Court of Error. This  Court only intervenes where justice, equity and good  conscience require such intervention. In Baiganna v. Deputy Collector of Consolidation,  (1978) 2 SCR 509 : (1978) 2 SCC 461; Krishna Iyer, J.  pithily stated;         "The Supreme Court is more than a Court  of appeal. It exercises power only when there is  supreme need. It is not the fifth court of appeal  but the final court of the nation. Therefore,  even if legal flaws may be electronically  detected, we cannot interfere sans manifest  injustice or substantial question of public  importance".               (emphasis supplied) [see also V.G. Ramachandran, ’Law of Writs’; Revised  by Justice C.K. Thakker & Mrs. M.C. Thakker; Sixth  Edn; Vol.2; pp.1440-1528]

Keeping in view totality of facts and attending  circumstances including serious allegations of fraud said  to have been committed by the land-owners 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. Before parting with the matter, we may state that  all the observations made by us hereinabove have been  made only for the purpose of deciding the legality and  validity of the order passed by the High Court. We may

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clarify that we may not be understood to have expressed  any opinion on merits of the matter one way or the other.  Therefore, as and when the matter will be considered by  the authorities in pursuance of the directions of the High  Court, it will be decided on its own merits without being  inhibited by the observations made by us in this  judgment.  For the foregoing reasons, the appeals deserve to be  dismissed and are accordingly dismissed with costs.