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Fraud vitiates all acts

Fraud Vitiates All Acts

Case Name: Hitender Shokeen v. Rajan Kumar Shokeen:

2023 SCC OnLine Del 2774

Bench:    Justice Jyoti Singh

Facts:

  • The case arises out of a dispute within a Hindu Undivided Family (HUF) over properties.
  • Plaintiff, Rajan Kumar Shokeen filed CS(OS) No. 947/2007 seeking partition of ancestral properties and  declaration that earlier consent decrees (1972) and preliminary/final partition decrees (2005/2008) were obtained by fraud.
  • Defendant, Hitender Shokeen filed an application under Order VII Rule 11 CPC to reject the plaint, citing limitation and lack of cause of action.

Issues:

  • Whether the plaint disclosed a valid cause of action.
  • Whether the suit was barred by limitation (Article 59, Limitation Act).
  • Whether allegations of fraud warranted a full trial.
  • Whether omission of possession relief attracted Order II Rule 2 CPC.

Arguments:

Defendant: Suit is time-barred; prior decrees were not challenged; plaintiff is bound by mother’s admissions; no claim for possession.

Plaintiff: Properties are ancestral; fraud alleged in decrees obtained 1972; fraud vitiates decrees; limitation and fraud require trial.

Holding:

The Delhi High Court dismissed the revision petition, affirming the Trial Court’s refusal to reject the plaint. The Court held:

  • Limitation is a mixed question of law and fact and must be tried.
  • Allegations of fraud require evidence; fraud, if proved, renders a decree a nullity.
  • Rejection under Order VII Rule 11 CPC is not warranted when complex legal and factual issues exist.
  • Delay in seeking rejection and progress in trial militated against dismissal at this stage.

Key Precedents referred:

A.V. Papayya Sastry v. Govt. of A.P., (2007) 4 SCC 221

Nusli Neville Wadia v. Ivory Properties, (2020) 6 SCC 557

Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557

Significance:

This judgment reinforces that Order VII Rule 11 CPC should be sparingly invoked, especially in cases involving fraud, ancestral property rights, and limitation issues requiring trial. It upholds a party’s right to contest decrees allegedly obtained through fraud and collusion, even if belated.