Supreme Court sets aside own judgment in property case, says it was ‘tainted by fraud’

Vardhan alleged that Veerana made several attempts to assert his exclusive ownership in proceedings, without making him and Sudhakar parties, and succeeded in one such proceeding before the Allahabad High Court, which declared him the sole owner by order dated October 28, 2021, but directed deduction of development charges from the compensation payable.

Both Noida and Reddy challenged this before the Supreme Court, which on May 5, 2022, dismissed the civil appeal filed by Noida, and partly allowed the civil appeal filed by Veerana, setting aside the deduction of the development charges ordered by the high court.

Deciding Vardhan’s appeal against its own order, a bench of Justices Surya Kant, Dipankar Datta and Ujjal Bhuyan said that “considering Reddy’s consistent stance in earlier proceedings that the property was jointly owned with Vishnu and Sudhakar, his failure to implead them in the writ petition is appalling, if not more. This, in our view, was a calculated attempt by Reddy to wrongfully appropriate the entire property keeping the other two – Vishnu and Sudhakar – in the dark”.

Writing for the bench, Justice Datta said, “An attempt by Reddy to steal a march over Vishnu is clearly discernible which, without reference to anything more, does border on fraud…suppression of material facts before the High Court by Reddy is writ large….”.

The Supreme Court said that “obtaining of the impugned order by Reddy in his favour by playing fraud on the High Court is conspicuous by its presence” and that “judicial orders procured by Reddy by subverting the judicial process through fraud and concealment of material facts cannot be permitted to stand.”

The court recalled earlier rulings which said “fraud unravels everything” and “stated simply, nothing … nothing … and nothing, obtained by fraud, can be sustained, as fraud unravels everything” and held that “in light of the…discussion, we feel no hesitation to hold that given the deception involved, the impugned order and the decision of this Court dated 5th May, 2022 in Reddy Veerana…procured by Reddy are tainted by fraud and, thus, lack legal sanctity and validity.”

Invoking the doctrine of merger, Veerana argued that the court cannot entertain a civil appeal against its own order into which the high court order had merged. The Supreme Court, however, rejected the argument, saying “that fraud is an exception to the doctrine of merger”.

The top court recalled the high court order of May 5, 2022 and asked it to decide it afresh, making Vardhan and Sudhakar additional respondents.

“Having regard to the magnitude of fraud”, it also requested the Chief Justice of the high court to preside over the division bench for finally deciding the matter as early as possible, preferably by the year-end.