P L D 1973 Lahore 652 (PLP)

Grindlays Bank Limited v. Murree Brewery Company Ltd. and another P L D 1954 Lah. 745 rel. Ch. Mahmood ul Hassan for Petitioner. This order will also dispose of F. A. Os. Nos. 17 to 23 of 1973, as the point involved in all these cases is the same and the learned District Judge has also disposed them of by one judgment.

2. A suit for declaration was filed against the appellants seeking relief to the effect; that the plaintiff‑respondent was owner in possession of the suit property and the decree dated 30‑4‑1968 obtained by the appellants in Suit No. 388 from the civil Court at Mianwali was obtained by fraud and collusion and that the order dated 10‑5‑1973 was also obtained by fraud and collusion. This suit was vehemently contested by the appellants and on the basis of the pleadings of the parties, the following preliminary issue was framed:‑ "Whether the suit is barred under section 11 of the C. P. C.? (O. P. D.). This issue was found by the learned trial Court in favour of the appellants and the suit instituted by the plaintiff‑respondent was dismissed with costs. Appeal against that was accepted by the learned District Judge, Mianwali by the impugned order dated 26‑10‑1972. Tue case was remanded to the trial Court for decision on merits.

3. It is admitted that the parties have been litigating previously for a long time and the plaintiff‑respondent has not been able to succeed up to the Supreme Court level. The main contention of the appellants is that if there was any fraud or collusion committed by them, then the same should have been brought to the notice of the Court when the previous litigation was pending between the parties They have relied upon Explanation IV of section 11 of the C. P. C., which reads as follows t‑ "Any matter which might and ought to have been made ground of defence or attack in such former suit shell 1,e doomed to have been a matter directly and substantially in Issue in such suit." The argument as put forth by the learned counsel is that if there wars any fraud or collusion on the basis of which the previous decree was obtained by the appellant, then the same should have been made ground of defence or attack in the former suit and since this was not done, therefore, according to him, the present suit was hit by the principle of res-judi cata.

4. The record in this case was summond by me in order to properly appreciate the allegations with regard to fraud and collusion as made in the plaint. It has been clearly alleged therein that false representation was deliberately made by the appellants in order to obtain the decree in their favour. According to law, every representation made to a Court, which is deliberately false, amounts to a fraud and would vitiate a decree subject to the exception that a mere falsity of a claim to the knowledge of the person putting forward the claim would not be ground for setting aside the decree on the ground of fraud. The main question to be seen in such a case is as to whether the representation made to a Court was deliberately false or not. If such allegation has been made and proved then the decree would be found to have been obtained by fraud. However, the principle of res judicata will not be applicable in a case where the validity of the decree has been challenged on account of fraud. In the absence of any allegation with regard to fraud, the principle of res judicata may, of course, be applicable. This aspect has been discussed in Mst. Izat end another v. Kadir Bux (P L D 1959 Kar. 221). In this case a similar objection was taken. It was argued before the learned Judge by the party concerned that since the allegation of fraud and collusion had not been made in the previous suit between the parties, therefore, the previous decree would operate as res judicata against the subsequent proceedings. This argument was repelled by the learned Judge of the High Court. The relevant para of the judgment is re produced below:‑ "To me it seems strange contention to put forward in a case where the decree is being challenged on account of fraud that the matter is res judicata. If that was so no suit for setting aside a decree on the ground of fraud could ever lie. If the decree in fact was obtained by fraud the decree is no decree at all in the eye of law. Under section 44 of the Evidence Act any person who is sought to be bound by a decree is entitled to show that the decree was obtained by fraud. Even if this section did not exist I do not see how the plaintiffs could have been prevented from leading evidence to establish that it was obtained by fraud. Fraud vitiates all proceedings and nothing that is product of fraud is of any validity."

5. It makes clear that the plea of res judicata will not b available in a case where fraud has been pleaded as basis for obtaining the previous decree. It is, however, open to the Court to see on the basis of the evidence of the parties as to whether any fraud or collusion is made out against the party concerned or not. If no such allegation is proved then question of setting aside the previous decree does not arise. It is, established principle of law that a judgment or order, however high or independent the tribunal delivering or making it and however exclusive its jurisdictions is a nullity if it be proved that it was obtained by Fraud. This fraud may be proved not only in the proceedings in which it was committed but also in a suit to set aside that judgment or order, the only limitation on the Court's power to avoid such adjudication being that the fraud should have been set up under section 40, 41, 42 or 43 of the Evidence Act by the party relying on it. In appropriate cases it is the duty of the Court that has seisin of the case to re‑call suo motu an order procured by fraud. Reliance in this respect can be placed upon Grind`ay's Bank Limited v. Murree Brewery Company Limited and anther (P L D 1954 Lah. 745). In the light of the above discussion. It is held that the plea of res judicata will not he available to the appellants in the present case.

6. However, it may be observed that since the parties have been litigating against each other for a long time, therefore, it would be quite desirable that the present proceedings pending in the trial Court should be decided as early as possible. The learned trial Court is, therefore, directed to decide the present case at the earliest possible time. No unnecessary adjournment should be given to any of the parties.

7. In view of the above discussion, there is no merit in the appeal, which is hereby dismissed in limine. S. A. H. Appeal dismissed.