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PETITIONER: SRI DADU DAYAL MAHASABHA

       Vs.

RESPONDENT: SUKHDEV ARYA AND ANOTHER

DATE OF JUDGMENT17/11/1989

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) RAMASWAMI, V. (J) II

CITATION:  1989 SCR  Supl. (2) 233  1990 SCC  (1) 189  JT 1989 (4)   382        1989 SCALE  (2)1193

ACT:       Civil   Procedure   Code,  1908:  Sections   115   and 15I--Civil  Court-Invoking of inherent power to correct  its own   proceedings--When   it  is  misled  by  any   of   the parties--Revision--High  Court  could intervene  when  trial court failed to exercise jurisdiction under Section 151       Practice and Procedure.’ Courts--When misled by any of the parties--Could invoke inherent power to correct its  own proceedings.

HEADNOTE:       The appellant, a registered society, instituted a suit through  its Secretary in respect of an immovable  property. Afterwards,  the  election  of the office  bearers  for  the Society  was held and one ’X’ claiming  to be the  Secretary of the Society filed an application for withdrawing the suit and the trial court allowed the same.      In  the  subsequent election, one ’Y’  was  elected  as Secretary  and  he filed an application  for  recalling  the order of withdrawal and for restoring the suit. The applica- tion was contested and the trial court rejected the applica- tion.  The  appellant challenged the order before  the  High Court  by way of a petition under section 115 CPC. The  High Court  observed that the trial court had  committed  several serious  errors in deciding the question as to who  was  the elected  Secretary  of the Society on the relevant  date  in favour of the respondent but held that the mistake could not be corrected.      This  appeal  by  special leave, is  against  the  High Court’s judgment.      On  behalf  of the appellant, it was  argued  that  the trial court failed to appreciate that ’X’ was not the elect- ed Secretary of the Society, as was held by the Registrar of Cooperative  Societies,  and that ’X’ did not  also  succeed before the High Court in this regard. And hence, he was  not competent  to withdraw the suit. It has been contended  that the  error committed by the trial court ought to  have  been rectified by the High Court. 234     The respondents argued that the only remedy available to the  appellant  was to file a fresh suit. It  was  contended that  the  High  court rightly did not  decide  the  dispute

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finally regarding election of ’X’ and left it to be  settled by the Civil Court.     Allowing  the  appeal and remitting the  matter  to  the trial court, this Court,     HELD: 1.1 The position is well established that a  court has inherent power to correct its own proceedings when it is satisfied  that in passing a particular order it was  misled by one of the parties. [237D]     1.2 If a party makes an application before the Court for setting aside the decree on the ground that he did not  give his consent, the court has the power and duty to investigate the  matter and to set aside the decree if it  is  satisfied that  the  consent as a fact was lacking and the  court  was induced  to  pass the decree on a  fradulent  representation made  to  it that the party had actually  consented  to  it. However, if the case of the party challenging the decree  is that he was in fact a party to the compromise petition filed in the case but his consent had been procured by fraud,  the court  cannot investigate the matter in the exercise of  its inherent  power,  and  the only remedy to the  party  is  to institute a suit. 1237F-G]     1.3 So far as the finding of the trial court that X  was the elected Secretary of the appellant Society with authori- ty to withdraw the suit is concerned, the same suffers  from several  errors  and requires reconsideration. Even  in  the view of the High Court that is the position, but it declined to  exercise its revisional power on the assumption that  it had no jurisdiction to do so. The courts below were,  there- fore,  not  right  in holding that the  application  of  the appellant  invoking the inherent jurisdiction of  the  court was  not maintainable. If the appellant’s case is  factually correct that X was not its elected Secretary and was, there- fore,  not authorised to withdraw the suit, the  prayer  for withdrawing the suit was not made on behalf of the appellant at all and the impugned order was passed as a result of  the court being misled. Such an order cannot bind the  appellant and has to be vacated. High Court should have intervened  in its revisional power on the ground that the trial court  had failed  to  exercise  ajurisdiction vested  in  it  by  law. [238F-G; D-E]     Sadho Saran Rai and Ors. v. Anant Rai and Ors., AIR 1923 Patna 483; Vilakathala Raman v. Vayalil Pachu, 27 Madras Law Journal  Reports 172 and Basangowda Hanmantgowda  Patil  and Anr. v. 235 Churchugirigowda  Yogangowda and Anr., I.LR 34  Bombay  408, approved.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3901  of 1981.     From  the  Judgment  and Order dated  22.1.1987  of  the Rajasthan High Court in S.B. Civil Revision No. 672 of 1983. V.M. Tarkunde and L.K. Pandey for the Appellant.     J.P.  Goyal,  R.K. Gupta, K.K. Gupta, (NP)  and  Rajesh, (NP) for the Respondents. The Judgment of the Court was delivered by     SHARMA,  J.  This appeal by special  leave  is  directed against  the judgment of Rajasthan High Court  dismissing  a civil  revision  application filed by the appellant  in  the following circumstances.     2.  The appellant, a registered Society, filed the  suit out of which this appeal arises in the court of the District

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Judge,  Jaipur  City  in respect of  an  immovable  property through  its the then Secretary which was numbered  as  Suit No.  11 of 1973. The counsel engaged by the  appellant  were Sri  Satya Narain Sharma and Sri Shyam Bihari  Agarwal.  The suit  was later transferred to the court of Additional  Dis- trict  Judge No. 1, Jaipur City where it was  renumbered  as Suit No. 116 of 1974. After the institution of the suit,  an election  of the office bearers of the Society was  held  on 1.6.1973  and  according  to the appellant’s  case  one  Sri Laxman  Das Swami was elected as the Secretary. On 4.9.74  a prayer for withdrawing the suit was made by one Hari  Narain Swami  through another lawyer claiming to have been  elected as the Secretary of the Society. In support of his claim  of having  been  elected as the Secretary of the  Society  Hari Narain  Swami  produced certain documents on  the  basis  of which  the  Trial Court allowed the suit  to  be  withdrawn. According  to the case of the appellant, Hari  Narain  Swami was not elected as the Secretary and had no locus standi  to withdraw the suit. Since no notice was given of his applica- tion for withdrawal of the suit either to the then Secretary Laxman  Das  Swami  or to the learned  advocates  Sri  Satya Narain Sharma or Sri Shyam Bihari Agarwal, through whom  the suit had been instituted, none of them had any knowledge  of the order passed by the court. Later, in the next  election, another  Secretary named Jeeva Nand Swami was  elected,  and when he 236 learnt about the fate of the suit, an application was  filed for recalling the order of withdrawal and restoring the suit to  its file. The prayer was contested and the  trial  court rejected  the application. The appellant Society  challenged the order before the High Court by a petition under s. 1  15 of  the Code of Civil Procedure which was also dismissed  by the impugned judgment.     3.  The trial court after holding that  the  appellant’s application filed under s. 15 1 of the Code of Civil  Proce- dure,  was not maintainable, proceeded further  to  consider the question as to who was the duly elected Secretary of the Society,  entitled  to prosecute or withdraw  the  suit  and accepted  the case of Hari Narain Swami. The High Court  has agreed with the trial court that the application under s. 15 1 of the Code of Civil Procedure was not maintainable. While agreeingwith  the argument of the appellant that  the  trial court  had committed several serious errors in deciding  the question as to who was the elected Secretary of the  Society on  the relevant date in favour of the respondent  the  High Court  observed that the mistake could not be  corrected  in the present situation.     4.  It has been contended by Mr. Tarkunde,  the  learned counsel for the appellant, that the application under s.  15 1  of  the Code of Civil Procedure, for restoration  of  the suit  was maintainable and the error committed by the  trial court while recording the finding on the merits of the  case was  such which the High Court ought to have rectified.  The learned advocate representing the respondents has strenuous- ly argued that the trial court has no jurisdiction to recall its  order permitting the withdrawal of the suit  under  its inherent power and the High Court has rightly held that  the only  remedy of the appellant is to file a fresh  suit.  The finding  recorded  by the trial court on the merits  of  the case has also been relied upon.     5. The learned counsel for the appellant has  challenged the  correctness of the trial court’s finding in  favour  of the  respondent’s case that Hari Narain Swami had been  duly elected  as the Secretary of the appellant Society and  had,

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therefore,  full authority to withdraw the suit, on  several grounds.  Since we are of the view that the case has  to  go back to the trial court for reconsideration of the  evidence on  this point, we do not propose to deal with the  argument on behalf of the appellant in detail, except mentioning  one of them. It has been stated that a dispute, relating to  the election of the Secretary of the Society, had arisen between the  parties which ultimately went before the  Registrar  of the Cooperative Societies, who decided the matter in 237 favour of Laxman Das Swami and against Hari Narain Swami.  A writ  petition filed thereafter by Hari Narain Swami  before the  High Court (registered as C.W.P. No. 1406 of 1975)  was dismissed. It is said that the trial court failed to  appre- ciate  the impact of the judgments of the Registrar and  the High  Court  which has vitiated’ the impugned  decision.  In reply,  it  has been argued by the learned counsel  for  the respondents  that the High Court in C.W.P. No. 1406 of  1975 did not decide the dispute finally and left it to be settled by the civil court. Beyond pointing out that even  according to the impugned judgment of the High Court the errors in the judgment of the trial court are serious, we do not  consider it  appropriate to deal in detail with the arguments of  the learned counsel, as the disputed question has to go back for reconsideration.     6.  The  main  question  which  requires  consideration, however,  is  whether the trial court  has  jurisdiction  to cancel the order permitting the withdrawal of the suit under its inherent power, if it is ultimately satisfied that  Hari Narain Swami was not the Secretary of the appellant  Society and  was, therefore, not entitled to withdraw the suit.  The position is well established that a court has inherent power to correct its own proceedings when it is satisfied that  in passing  a  particular  order it was misled by  one  of  the parties. The principle was correctly discussed in the  judg- ment in Sadho Saran Rai and Others v. Anant Rai and  Others, AIR  1923 Patna 483, pointing out the distinction  in  cases between  fraud practised upon the court and fraud  practised upon a party.     7.  Let us consider the cases in which  consent  decrees are  challenged. If a party makes an application before  the Court for setting aside the decree on the ground that he did not  give his consent, the court has the power and  duty  to investigate the matter and to set aside the decree if it  is satisfied  that  the consent as a fact was lacking  and  the court was induced to pass the decree on a fraudulent  repre- sentation  made to it that the party had actually  consented to  it.  However, if the case of the party  challenging  the decree  is  that he was in fact a party  to  the  compromise petition filed in the case but his consent has been procured by  fraud,  the court cannot investigate the matter  in  the exercise  of its inherent power, and the only remedy to  the party is to institute a suit. It was succinctly summed up in the  aforementioned case that the factum of the consent  can be  investigated in summary proceedings, but the reality  of the  consent  cannot be so investigated. The  principle  has been  followed in this country for more than a  century.  In Vilakathala Raman v. Vayalil Pachu, 27 Madras Law Jour- 238 nal  Reports 172, the trial court had vacated  its  previous order  regarding satisfaction of decree on the  ground  that the same was obtained by the judgment debtor’s fraud on  the court. The High Court, while confirming the order, said that in the exercise of inherent power under s. 15 1 of the  Code of  Civil Procedure a court can vacate an order obtained  by

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fraud on it. Reliance had been placed on an old decision  of Bombay High Court of 1882 and a Madras decision of 1880.  In Basangowda Hanmantgowda Patil and Others v. Churchigirigowda Yogangowda and Another, I.L.R. 34 Bombay 408, the  defendant applied to the court to set aside a compromise decree on the ground  that  he had not engaged the lawyer claiming  to  be representing  him and had not authorised him  to  compromise the  suit. The court accepted his plea and ruled that it  is the  inherent power of every court to correct its  own  pro- ceedings  when it has been misled. Similar was the  view  of the  Calcutta High Court in several decisions  mentioned  in Sadho  Saran’s case (supra). The ratio has been  later  fol- lowed  in a string of decisions of several High Courts.  The same  principle  applies  where a suit is  permitted  to  be withdrawn  on the basis of a prayer purported to  have  been made  on  behalf of the plaintiff. The  courts  below  were, therefore, not right in holding that the application of  the appellant  invoking the inherent jurisdiction of  the  court was  not maintainable. If the appellant’s case is  factually correct that Hari Narain Swami was not its elected secretary and was, therefore, not authorised to withdraw the suit, the prayer  for withdrawing the suit was not made on  behalf  of the appellant at all and the impugned order was passed as  a result of the court being misled. Such an order cannot  bind the  appellant  and has to be vacated. The trial  court  was thus clearly wrong in dismissing the appellant’s application as  not maintainable, and the High Court should have  inter- vened  in its revisional power on the ground that the  trial court had failed to exercise a jurisdiction vested in it  by law.     8.  So  far  the finding of the trial  court  that  Hari Narain Swami was not the elected Secretary of the  appellant Society  with authority to withdraw the suit  is  concerned, the  same suffers from several errors and requires a  recon- sideration.  Even in the view of the High Court that is  the position, but it declind to exercise its revisional power on the  assumption  that it had no jurisdiction to do  so.  We, therefore,  allow the appeal, set aside the  impugned  judg- ments of the trial court and the High Court and r. emit  the matter to the trial court for reconsideration of the case on merits.  The parties shall be allowed to lead  further  evi- dence  in support of their cases. The costs will  abide  the final result in the litigation. G.N.                                                  Appeal allowed. 239