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CASE NO.: Appeal (civil)  5162-5167 of 2005

PETITIONER: Bhaurao Dagdu Paralkar                                   

RESPONDENT: State of Maharashtra and Ors.                            

DATE OF JUDGMENT: 22/08/2005

BENCH: ARIJIT PASAYAT & B.N. SRIKRISHNA

JUDGMENT: J U D G M E N T (Arising out of SLP ) Nos. 11344-11349/2004)

ARIJIT PASAYAT, J.

       Leave granted.

       When one talks of freedom fighters’ the normal image  that comes to one’s mind is a person who had suffered  physically and mentally for unshackling chains of foreign  rule in our country. The normal reaction when one sees such  person is one of reverence, regard and respect. The brave  courageous deeds of these persons is a distinctive part of  India’s fight for freedom. Many persons lost their lives,  many were injured and large number of such persons had  languished in jails for various periods. The common thread  which must have passed through the minds of these people is  their sole objective to see that their motherland has a  government of its own, free from foreign rule. But these  images get shattered when one hears that with a view to gain  financially, vague documents have been produced, false  claims of participation in the freedom movement have been  made. It is a sad reflection on the moral values of the  citizens of our country that a large number of cases have  surfaced where it has been established that people who were  not even born when the freedom fight was on or the country  got independence or were toddlers when the country got  independence have applied for and managed to get  "Sammanpatra", pensionary and other allied benefits. The  appeals at hand deal with such allegations.  This is  "Asanman" (disrespect) to the whole country and such  dishonourable ventures have to be dealt with sternness to  send out a message that they are not freedom fighters, but  are traitors sullying the name of freedom fight.      

       In these appeals challenge is to the judgment delivered  by a Division Bench of the Bombay High Court at Aurangabad  Bench by which several writ petitions were disposed of.

       Writ petitions came to be filed before the High Court  challenging the grant of benefits to such phantoms  masquerading to be freedom fighters. The basic allegation in  the writ petitions was that in the Beed District of  Maharashtra, there were large number of persons who had been

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granted pensionary benefits under the Freedom Fighters’  Pension Scheme (in short the ’Scheme’). Such writ petitions  were purported to have been filed by persons in public  interest.   In one case the petition was filed by a freedom  fighter who claimed that he was surprised to see the number  of persons falsely claiming to be freedom fighters. The  prayer essentially was to hold detailed enquiry and to  cancel the pensionary benefits and for a direction to  recover the amounts which had already been paid along with  the prayer for initiation of criminal proceedings against  the bogus claimants. It was pointed out that in as many as  354 bogus claims have been allowed in the concerned  district. Such persons were availing pensionary and other  benefits which are to be availed only by genuine freedom  fighters.  It was highlighted in the petitions that some of  the so called freedom fighters were all of tender age and/or  were not born when freedom struggle was fought. In respect  of others it was alleged that they managed to get freedom  fighters’ pension by submitting forged, false and fabricated  documents. A Division Bench of the High Court taking  cognizance of the petitions and the serious allegations made  therein constituted a three-member Enquiry Committee headed  by a retired Judge of the Maharashtra Administrative  Tribunal and two other members who were practising advocates  from the Beed District. They were required to enquire into  the claims of so called freedom fighters. The Committee was  constituted by order dated 3.12.2002. Allegations were made  that out of 3000 applications filed, 354 were ineligible and  the High Power Committee of the State had wrongly  recommended payment of pension holding them to be freedom  fighters. It is stated that there are two Committees i.e.  District Level Committee (District Gaurav Committee) and  State Level High Power Committee which are required to  examine the claims. The High Court after perusing the 3000  applications retained the files of these suspected 354  cases. Order passed prior to the appointment of the Enquiry  Committee revealed that the Court prima facie was of the  view that in 26 cases the persons were less than 10 years of  age when the freedom struggle was fought. The Enquiry  Committee submitted its report. After the enquiry report was  submitted, the High Court passed orders at various stages.  It appears that some of the persons whose names were  included in the list of 354 suspected beneficiaries filed  the writ petitions. While the High Court directed the  Collector, Beed District not to release pension to these  freedom fighters whose cases were covered by the Enquiry  Committee until further orders. The said order of the High  Court was also made applicable to the freedom fighters whose  civil writ applications were already rejected. Aggrieved by  the order, Special Leave Petition was filed before this  Court which was disposed of by the following order:

       "Heard the learned counsel for the  petitioners.

       We decline to grant permission to file  the Special Leave petitions but give liberty  to the petitioners to file independent writ  petitions, challenging the order of the  Enquiry Committee, if so desired.

       At this stage, the learned counsel for  the petitioners states that certain  observations made in the impugned order will  come in their way and/or affect the case of

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the petitioners on merits. We make it clear  that the observations made in the impugned  order shall not affect the merits of the case  of the petitioners in the writ petitions that  may be filed."        

After hearing the cases, the High Court by the impugned  judgment held that the foundation on which the allegations  were made was really factually incorrect. The High Court  took five sample cases and came to hold that the report of  the Enquiry Committee was not to be accepted and  accordingly dismissed the writ petitions.  It was of the  view that the documents produced were sufficient to  substantiate the claims. It found that the parameters  fixed by this Court for dealing with the applications for  freedom fighters’ pension were fulfilled and therefore no  interference was called for. It also held that the  petitions filed as ’Public Interest Litigation’ were not  really so. It was observed that the enquiries conducted  before grant of pension cannot be upset by contrary  findings recorded by the Enquiry Committee and, therefore,  the petitions challenging grant of freedom fighters’  pension were dismissed while the petitions questioning  correctness of the Enquiry Committee appointed by the High  Court were allowed.  

       In support of the appeals, Mr. A.V. Savant, learned  senior counsel submitted that the approach of the High  Court is clearly erroneous. The fact that it took up 5  sample cases itself shows that the High Court was not  adopting the proper course. Even if it is accepted for the  sake of argument that the persons covered by the five  sample cases were genuine freedom fighters that does not  necessarily lead to an inference that all others were also  genuine freedom fighters. After elaborate analysis of the  materials the Committee came to hold that the claims were  bogus and tainted with fraud.  The High Court should not  have lightly interfered with the findings on suppositions  and presumptions.  

       Per contra,  learned counsel for the beneficiaries  whose eligibility was questioned submitted that all  relevant documents had been submitted, were scrutinized  and thereafter pension was granted and, therefore, the  Committee appointed by the High Court was not justified in  lightly brushing aside the intrinsic value of the  documents produced to hold otherwise.  

       The object of the scheme was highlighted by this Court  in Mukundlal Bhandari v. Union of India and Ors. (AIR 1993  SC 2127)

       "The object was to honour and where it  was necessary also to mitigate the sufferings  of those who had given their all for the  country in the hour of its need. In fact,  many of those who do not have sufficient  income to maintain themselves refuse to take  benefit of it since they consider it as an  affront to the sense of patriotism with which  they plunged in the freedom struggle. The  spirit of the scheme being both to assist and  honour the needy and acknowledge the valuable

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sacrifices made, it would be contrary to its  spirit to convert it into some kind of a  programme of compensation. Yet that may be  the result if the benefit is directed to be  given retrospectively whatever the date the  application is made. The Scheme should retain  its high objective with which it was  motivated..."

       Again in Gurdial Singh v. Union of India (2001 AIR SCW  3843) this Court observed:

       "It should not be forgotten that the  persons intended to be covered by the scheme  have suffered for the country about half a  century back and had not expected to be  rewarded for the imprisonment suffered by  them. Once the country has decided to honour  such freedom fighters, the bureaucrats  entrusted with the job of examining the cases  of such freedom fighters are expected to keep  in mind the purpose and object of the  scheme...."

       We are in respectful agreement with the view expressed  in Mukundlal’s and Gurdial Singh’s cases (supra). As noted  at the threshold, the genuine freedom fighters deserve to  be treated with reverence, respect and honour. But at the  same time it cannot be lost sight of that people who had  no role to play in the freedom struggle should not be  permitted to benefit from the liberal approach required to  be adopted in the case of the freedom fighters, most of  whom in the normal course are septuagenarians and  octogenarians. It baffles one, beyond comprehension, when  claim is made by a person who was not even born during the  freedom struggle to be a freedom fighter. Learned counsel  for the appellant has submitted a list which makes an  interesting reading. Some of the beneficiaries were born  in 1951 and some in 1955. Accepting claims of such persons  to be freedom fighters would be making a mockery of the  scheme which is intended for genuine freedom fighter. The  approach of the High Court is clearly untenable. Sampling  cannot be the method for determining the truth or  otherwise of the allegations or claims made. Each case was  required to be individually examined. On that score alone,  the High Court’s judgment is vulnerable. Allegations made  were to the effect that fraud has been practiced.

       By "fraud" is meant an intention to deceive; whether  it is from any expectation of advantage to the party  himself or from the ill will towards the other is  immaterial.  The expression "fraud" involves two elements,  deceit and injury to the person deceived.  Injury is  something other than economic loss, that is, deprivation of  property, whether movable or immovable or of money and it  will include and any harm whatever caused to any person in  body, mind, reputation or such others. In short, it is a  non-economic or non-pecuniary loss.  A benefit or advantage  to the deceiver, will almost always call loss or detriment  to the deceived. Even in those rare cases where there is a  benefit or advantage to the deceiver, but no corresponding  loss to the deceived, the second condition is satisfied.   (See Dr. Vimla v. Delhi Administration (1963 Supp. 2 SCR  585) and Indian Bank v. Satyam Febres (India) Pvt. Ltd.

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(1996 (5) SCC 550).           A "fraud" is an act of deliberate deception with the  design of securing something by taking unfair advantage of  another.  It is a deception in order to gain by another’s  loss. It is a cheating intended to get an advantage.  (See  S.P. Changalvaraya Naidu v. Jagannath (1994 (1) SCC 1).         "Fraud" as is well known vitiates every solemn act.   Fraud and justice never dwell together.  Fraud is a conduct  either by letter or words, which includes the other person  or authority to take a definite determinative stand as a  response to the conduct of the former either by words or  letter.  It is also well settled that misrepresentation  itself amounts to fraud. Indeed, innocent misrepresentation  may also give reason to claim relief against fraud.  A  fraudulent misrepresentation is called deceit and consists  in leading a man into damage by willfully or recklessly  causing him to believe and act on falsehood. It is a fraud  in law if a party makes representations, which he knows to  be false, and injury enures therefrom although the motive  from which the representations proceeded may not have been  bad.  An act of fraud on court is always viewed seriously.   A collusion or conspiracy with a view to deprive the rights  of the others in relation to a property would render the  transaction void ab initio. Fraud and deception are  synonymous.  Although in a given case a deception may not  amount to fraud, fraud is anathema to all equitable  principles and any affair tainted with fraud cannot be  perpetuated or saved by the application of any equitable  doctrine including res judicata.  (See Ram Chandra Singh v.  Savitri Devi and Ors. (2003 (8) SCC 319). "Fraud" and collusion vitiate even the most solemn  proceedings in any civilized system of jurisprudence.  It  is a concept descriptive of human conduct.  Michael Levi  likens a fraudster to Milton’s sorcerer, Comus, who exulted  in his ability to, ’wing me into the easy hearted man and  trap him into snares’. It has been defined as an act of  trickery or deceit. In Webster’s Third New International  Dictionary "fraud" in equity has been defined as an act or  omission to act or concealment by which one person obtains  an advantage against conscience over another or which  equity or public policy forbids as being prejudicial to  another.  In Black’s Legal Dictionary, "fraud" is defined  as an intentional perversion of truth for the purpose of  inducing another in reliance upon it to part with some  valuable thing belonging to him or surrender a legal right;  a false representation of a matter of fact whether by words  or by conduct, by false or misleading allegations, or by  concealment of that which should have been disclosed, which  deceives and is intended to deceive another so that he  shall act upon it to his legal injury.  In Concise Oxford  Dictionary, it has been defined as criminal deception, use  of false representation to gain unjust advantage; dishonest  artifice or trick. According to Halsbury’s Laws of England,  a representation is deemed to have been false, and  therefore a misrepresentation, if it was at the material  date false in substance and in fact.  Section 17 of the  Indian Contract Act, 1872 defines "fraud" as act committed  by a party to a contract with intent to deceive another.   From dictionary meaning or even otherwise fraud arises out  of deliberate active role of representator about a fact,  which he knows to be untrue yet he succeeds in misleading  the representee by making him believe it to be true.  The  representation to become fraudulent must be of fact with  knowledge that it was false. In a leading English case i.e.  Derry and Ors. v. Peek (1886-90) All ER 1 what constitutes

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"fraud" was described thus: (All ER p. 22 B-C) "fraud"  is proved when it is shown that a false representation has  been made (i) knowingly, or (ii) without belief in its  truth, or (iii) recklessly, careless whether it be true or  false".  But "fraud" in public law is not the same as  "fraud" in private law.  Nor can the ingredients, which  establish "fraud" in commercial transaction, be of  assistance in determining fraud in Administrative Law.  It  has been aptly observed by Lord Bridge in Khawaja v.  Secretary of State for Home Deptt. (1983) 1 All ER 765,  that it is dangerous to introduce maxims of common law as  to effect of fraud while determining fraud in relation of  statutory law.  "Fraud" in relation to statute must be a  colourable transaction to evade the provisions of a  statute. "If a statute has been passed for some one  particular purpose, a court of law will not countenance any  attempt which may be made to extend the operation of the  Act to something else which is quite foreign to its object  and beyond its scope. Present day concept of fraud on  statute has veered round abuse of power or mala fide  exercise of power. It may arise due to overstepping the  limits of power or defeating the provision of statute by  adopting subterfuge or the power may be exercised for  extraneous or irrelevant considerations.  The colour of  fraud in public law or administration law, as it is  developing, is assuming different shades.  It arises from a  deception committed by disclosure of incorrect facts  knowingly and deliberately to invoke exercise of power and  procure an order from an authority or tribunal.  It must  result in exercise of jurisdiction which otherwise would  not have been exercised. The misrepresentation must be in  relation to the conditions provided in a section on  existence or non-existence of which the power can be  exercised.  But non-disclosure of a fact not required by a  statute to be disclosed may not amount to fraud.  Even in  commercial transactions non-disclosure of every fact does  not vitiate the agreement. "In a contract every person  must look for himself and ensures that he acquires the  information necessary to avoid bad bargain. In public law  the duty is not to deceive. (See Shrisht Dhawan (Smt.) v.  M/s. Shaw Brothers, (1992 (1) SCC 534).         In that case it was observed as follows:

"Fraud and collusion vitiate even the most solemn  proceedings in any civilized system of jurisprudence.  It is  a concept descriptive of human conduct. Michael levi likens  a fraudster to Milton’s sorcerer, Comus, who exulted in his  ability to, ’wing me into the easy-hearted man and trap him  into snares’. It has been defined as an act of trickery or  deceit.  In Webster’s Third New International Dictionary  fraud in equity has been defined as an act or omission to  act or concealment by which one person obtains an advantage  against conscience over another or which equity or public  policy forbids as being prejudicial to another.  In Black’s  Legal Dictionary, fraud is defined as an intentional  perversion of truth for the purpose of inducing another in  reliance upon it to part with some valuable thing belonging  to him or surrender a legal right; a false representation of  a matter of fact whether by words or by conduct, by false or  misleading allegations, or by concealment of that which  should have been disclosed, which deceives and is intended  to deceive another so that he shall act upon it to his legal  injury.  In Concise Oxford Dictionary, it has been defined  as criminal deception, use of false representation to gain

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unjust advantage; dishonest artifice or trick.  According to  Halsbury’s Laws of England, a representation is deemed to  have been false, and therefore a misrepresentation, if it  was at the material date false in substance and in fact.   Section 17 of the Contract Act defines fraud as act  committed by a party to a contract with intent to deceive  another.  From dictionary meaning or even otherwise fraud  arises out of deliberate active role of representator about  a fact which he knows to be untrue yet he succeeds in  misleading the representee by making him believe it to be  true.  The representation to become fraudulent must be of  the fact with knowledge that it was false.  In a leading  English case Derry v. Peek [(1886-90) ALL ER Rep 1: (1889)  14 AC 337 (HL)] what constitutes fraud was described thus:  (All Er p. 22 B-C)

       ’Fraud is proved when it is shown that a false  representation has been made (i) knowingly, or (ii) without  belief in its truth, or (iii) recklessly, careless whether  it be true or false’."

       This aspect of the matter has been considered recently  by this Court in Roshan Deen v. Preeti Lal (2002 (1) SCC  100) Ram Preeti Yadav v. U.P. Board of High School and  Intermediate Education (2003 (8) SCC 311), Ram Chandra  Singh’s case (supra) and Ashok Leyland Ltd. v. State of T.N.  and Another (2004 (3) SCC 1).

       Suppression of a material document would also amount to  a fraud on the court. (see Gowrishankar v. Joshi Amba  Shankar Family Trust (1996 (3) SCC 310) and S.P.  Chengalvaraya Naidu’s case (supra).         "Fraud" is a conduct either by letter or words, which  induces the other person or authority to take a definite  determinative stand as a response to the conduct of the  former either by words or letter.  Although negligence is  not fraud but it can be evidence on fraud; as observed in    Ram Preeti Yadav’s case (supra).         In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702,  Lord Denning observed at pages 712 & 713, "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."   In the same judgment Lord Parker LJ observed that fraud  vitiates all transactions known to the law of however high  a degree of solemnity. (page 722)         These aspects were recently highlighted in the State of  Andhra Pradesh and Anr. v. T. Suryachandr Rao (2005 (5)  SCALE 621)

       To give finality to the controversy, we appoint Mr.  Justice A.B. Palkar, a retired Judge of the Bombay High  Court to examine the 354 cases. The relevant files shall  be handed over to the Commission immediately. The  Commission is requested to complete the verification  within four months and submit its report to the State  Government for necessary action. The claimants whose cases  are to be examined shall be given opportunity to have  their say before the Commission. The records of the Zilla  Gaurav Samittee, High Power Committee and the Committee  appointed by the High Court shall be examined by the  Commission before issuing notice to he individual  applicants to decide the acceptability or otherwise of the  claims for freedom fighters’ pension. On getting report of  the Commission, the State Government shall take necessary  action. We make it clear that we have not expressed any

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opinion on the acceptability or otherwise of the claims as  the Commission appointed by this Court shall examine those  aspects.  

       The Commission appointed by this Court shall be paid  the same emoluments as are admissible to a sitting Judge  of the High Court for the duration of its work, which we  expect will be finished within a period of 4 months.  The  emoluments admissible to the Commission shall be paid by  the State Government, apart from other expenses that may  be incurred for functioning of the Commission.             The appeals are allowed with no order as to costs.