Raheem Khan v. Deendayal & Ors.

Shri R avindra Kumar Agrawal , Judge 16/07/2026 Order on Board

1. The present petition under Article 227 of the Constitution of India has been filed by the petitioner against the award dated 12.03.2022, passed by Bench No.2, National Lok Adalat, Mungeli (C.G.) in Civil Suit No. 31-A/2018, whereby a compromise award has been passed in the suit.

2. Learned counsel for the petitioner would submit that the respondents No. 1 to 5 have initiated a civil suit against the respondents No. 6 to 9 and petitioner for declaration of title and permanent injunction with respect to the suit property of land bearing khasra No. 89, 208/2 and 209, total area 8.67 acres situated at Village Barduli, P.H. No. 46/29, Tehsil Pathariya, District Mungeli. The said Civil Suit No. 85-A/2015 was dismissed vide judgment and decree dated 04.05.2018 against which first appeal was preferred before the Appellate Court, which was registered as Civil Appeal No. 31-A/2018. During the pendency of the first appeal, the parties have entered into compromise with the condition that the respondents No. 1 to 5 may be declared as title holder of the suit property and the respondents No. 6 to 8 and the petitioner may be restrained from alienating the suit property and 3 restrained from interfering over the same. He would further submit that though the land of khasra No. 208/1 and 208/2 are different, but in condition No. (c) of the compromise, the respondents No. 1 to 5 shown that both these lands of khasra No. 208/1 and 208/2 are one and the same and it was not divided and the petitioner will not claim in any other property, except the suit land. He would further submit that the petitioner was pressurized by the other parties and their counsel to sign the compromise deed and get the compromise executed between the parties and presented the same before the National Lok Adalat, Bench No.2 on 12.03.2022 for compromise in the case. The learned Lok Adalat without verifying the facts and claim of the parties accepted the compromise and passed an award on

12.03.2022.

3. He would further submit that immediately after the compromise dated

12.03.2022, when the petitioner came to know about the discrepancies, as the land of khasra No. 208/1 and 208/2 are separate lands and he was being pressurized by the other parties to sign the compromise deed and get an award passed by the National Lok Adalat. He challenged the award dated 12.03.2022 by filing M.A. No. 34/2022, which has been withdrawn on 12.04.2022 with liberty to take appropriate remedy and then he preferred a WP (227) No. 409/2022. The said writ petition was inadvertently withdrawn on

01.08.2022 with the impression that the petitioner has to approach before the same Lok Adalat, who passed the award. Thereafter the petitioner made an application before the permanent Lok Adalat bearing prelitigation case No. 1227/2022 for setting aside the award 4 dated 12.03.2022 on the ground of fraud and coercion. Subsequently, in view of the judgment of ‘State of Punjab v. Jalour Singh and others’ 2008 (2) SCC 660 and ‘Bhargavi Constructions another v. Kothakapu Muthyam Reddy and others’ 2018 (13) SCC

480. The prelitigation case has been withdrawn on 02.09.2023 and then the present writ petition has been filed. He would further submit that the respondents, by suppressing the fact that the lands of khasra No. 208/1 and 208/2 are different lands, as it mentioned in the compromise deed that both the lands are one and same having area of 3.53 acres and by pressurizing the petitioner to sign the compromise deed obtained an order in their favour from the National Lok Adalat. The contents of the said compromise deed was not shown to him and even it was not read over to him. The terms and conditions of the compromise deed was not on his free will, but under the coercion. He would also submit that in the revenue records produced by the petitioner, the land of khasra No. 208/1 and 208/2 clearly appears to be different land. The land of khasra No. 208/2, area 2.00 acres is the only source of livelihood of the petitioner, but by the fraud and coercion by the respondents, it goes in their favour and the petitioner is being deprived by his livelihood, therefore, the impugned award dated 12.03.2022 passed by the National Lok Adalat, Bench No.2, Mungeli in Civil Suit No. 31-A/2018 may be set aside and the matter may be remitted back to the learned trial Court for adjudication on merits.

4. Per contra, learned counsel appearing for the respondents No. 1 to 5 opposes the submissions made by learned counsel for the petitioner 5 and would submit that the petitioner was the party in the suit and he was well aware of the description of the suit property and its location. After considering the entire facts and circumstances of the case, the terms and conditions of the compromise and also after read over the conditions mentioned in the said compromise entered between the parties signed the compromise deed and even he appeared before the learned National Lok Adalat on 12.03.2022 and signed the award and accepted the terms of compromise. Till that time, he never raised any objection regarding fraud or coercion. The terms of compromise was reduced in clarity and the petitioner signed the compromise on his free will without any coercion. He would further submit that the terms of compromise have also been verified by the learned National Lok Adalat at the time of passing of the award on 12.03.2022. It is an afterthought dispute raised by the petitioner and challenged the award dated 12.03.2022. He would further submit that merely by saying that the land of khasra No. 208/1 and 208/2 are different land, does not by itself established the allegation of fraud or coercion. Therefore, the petitioner fails to make out any case for interference in the impugned award dated 12.03.2022 and the writ petition is liable to be dismissed.

5. I have heard learned counsel for the parties and perused the material annexed with the writ petition.

6. The main question which arises for consideration is whether an award passed by the National Lok Adalat on the basis of an alleged compromise can be sustained when the compromise itself is alleged to have been obtained by fraud, misrepresentation and coercion. 6

7. There can be no quarrel with the settled proposition that an award passed by a Lok Adalat under Section 21 of the Legal Services Authorities Act, 1987 is deemed to be a decree of a Civil Court and ordinarily attains finality. However, such finality is not absolute. The finality attached to a Lok Adalat award is founded upon the existence of a lawful and voluntary compromise. If the very foundation of the award, namely the compromise, is shown to be vitiated by fraud, misrepresentation or coercion, the award itself cannot be permitted to stand.

8. In the present case, the petitioner has specifically pleaded that the respondents deliberately represented Khasra No.208/1 and Khasra No.208/2 as one and the same parcel of land although both are distinct khasra numbers separately recorded in the revenue records. The petitioner has further pleaded that the compromise petition was never read over or explained to him and that his signatures were obtained under pressure exerted by the contesting respondents and their counsel.

9. Significantly, the revenue documents filed by the petitioner prima facie disclose that Khasra No.208/1 and Khasra No.208/2 are separately existing khasra numbers with distinct areas and separate identity. If that be so, the recital incorporated in clause (c) of the compromise treating both khasra numbers as one property assumes considerable significance. Such recital is not a mere clerical mistake but goes to the root of the rights of the petitioner in immovable property. 7

10. Fraud is not confined merely to making a false statement. Suppression of a material fact, concealment of the true nature of the transaction or inducing a person to execute a document by misrepresenting its contents equally constitutes fraud. Once the Court finds that consent was obtained by deception, the compromise ceases to be a voluntary settlement in the eye of law.

11. In the case of A.V. Papayya Sastry and others v. Government of Andhra Pradesh and others, (2007) 4 SCC 221, the Hon'ble Supreme Court held that: “21. Now, it is well-settled principle of law that if any judgment or order is obtained by fraud, it cannot be said to be a judgment or order in law. Before three centuries, Chief Justice Edward Coke proclaimed: "Fraud avoids all judicial acts, ecclesiastical or temporal."

22. It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the court, tribunal or authority is a nullity and non est in the eye of the law. Such a judgment, decree or order-by the first court or by the final court-has to be treated as nullity by every court, superior or inferior. It can be challenged in any court, at any time, in appeal, revision, writ or even in collateral proceedings.

23. In the leading case of Lazarus Estates Ltd. v. Beasley 2 Lord Denning observed: (All ER p. 345 C) 8 "No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud."

24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p. 644, explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was "mistaken", it might be shown that it was "misled". There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside, if the court was imposed upon or tricked into giving the judgment.

25. It has been said: fraud and justice never dwell together (fraus et jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari debent).

26. Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the loss of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of "finality of litigation" cannot be stretched to the extent of an absurdity that it can 9 be utilised as an engine of oppression by dishonest and fraudulent litigants.

27. In S.P. Chengalvaraya Naidu v. Jagannath this Court had an occasion to consider the doctrine of fraud and the effect thereof on the judgment obtained by a party. In that case, one A by a registered deed, relinquished all his rights in the suit property in favour of C who sold the property to B. Without disclosing that fact, A filed a suit for possession against B and obtained preliminary decree. During the pendency of an application for final decree, B came to know about the fact of release deed by A in favour of C. He, therefore, contended that the decree was obtained by playing fraud on the court and was a nullity. The trial court upheld the contention and dismissed the application. The High Court, however, set aside the order of the trial court, observing that "there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence". B approached this Court.

28. Allowing the appeal, setting aside the judgment of the High Court and describing the observations of the High Court as "wholly perverse", Kuldip Singh, J. stated: (SCC p. 5, para 5) "The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property grabbers, tax- evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find 10 the court process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, whose case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation." (emphasis supplied)

9. The Court proceeded to state: (SCC p. 5, para 6) "A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party."

30. The Court concluded: (SCC p. 5, para 5) "The principle of 'finality of litigation' cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants."

12. In United India Insurance Co. Ltd. v. Rajendra Singh and others, (2000) 3 SCC 581, the Hon’ble Supreme Court reiterated that: “13. In S.P. Chengalvaraya Naiduv. Jagannath 2 the two-Judge Bench of this Court held: (SCC p. 2, para 1) 'Fraud avoids all judicial acts, ecclesiastical or temporal' observed Chief Justice Edward Coke of England about three centuries ago. It is the 11 settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings."

13. In State of Punjab v. Jalour Singh and others, (2008) 2 SCC 660, the Hon'ble Supreme Court explained that the Lok Adalat performs only a conciliatory function. It has no adjudicatory role. The Court observed that an award of the Lok Adalat is based exclusively upon the settlement voluntarily arrived at by the parties. Consequently, where the compromise itself is disputed as not being voluntary, the foundation of the award disappears. Likewise, in Bhargavi Constructions and another v. Kothakapu Muthyam Reddy and others, (2018) 13 SCC 480, the Hon'ble Supreme Court held that although a Lok Adalat award is final, the validity of such award can always be examined by the High Court under Articles 226/227 where the compromise is alleged to have been vitiated by fraud, coercion, misrepresentation or want of free consent.

14. In the present case, the pleadings of the petitioner are not vague or bald. The allegation of fraud is founded upon a specific assertion that two independent khasra numbers have deliberately been shown as one property in the compromise deed, thereby depriving the petitioner of his independent land comprised in Khasra No.208/2, 12 which according to him is his only source of livelihood. The allegation is supported by the revenue records annexed with the petition which prima facie indicate separate existence of the two khasra numbers.

15. It is also important to note here that the impugned award is passed on 12.03.2022 immediately thereafter on 24.03.2022, the petitioner challenged the award passed by the Lok Adalat by filing M.A. No. 34/2022 before this Court. Although the said M.A. and the W.P. (227) No. 409/2022 was withdrawn with liberty to approach before the appropriate forum, but the facts remains that immediately after passing of the award, the petitioner challenged the award dated

12.03.2022 which was passed on alleged compromise. The challenge of the petitioner is on the basis that, he being the owner and possession holder of the land khasra No. 208/2, area 2.00 acres and it is a different parcel of the land. The revenue record if khasra panchshala and kistbandi B-1 also shows that it was a different parcel of land. The claim of the petitioner that khasra No. 208/1 and 208/2 are different parcel of land are also supported by the demarcation report dated 06.04.2023 annexed at page No. 37 of the petition and other revenue documents annexed thereafter in the petition.

16. The learned Lok Adalat, while recording the compromise, merely recorded the presence of the parties and their signatures. There is nothing on record to demonstrate that the disputed recital regarding Khasra No.208/1 and 208/2 was independently verified from the revenue records or that the implications of such recital were specifically explained to the petitioner. In matters relating to valuable 13 immovable property, particularly where the compromise extinguishes proprietary rights, the satisfaction regarding free and informed consent must be real and not merely formal.

17. Once a serious and prima facie credible allegation of fraud affecting the very subject matter of the compromise is made, the Court cannot decline interference solely on the ground that the award of the Lok Adalat is final under Section 21 of the Act of 1987. Finality cannot be invoked to perpetuate an act tainted by fraud, for fraud unravels every solemn proceeding.

18. This Court is, therefore, of the considered opinion that the compromise dated 12.03.2022 cannot be treated as a lawful and voluntary settlement between the parties. Consequently, the award dated 12.03.2022 passed by the National Lok Adalat, Bench No.2, Mungeli, in Civil Suit No. 31-A/2018 having been founded upon a compromise prima facie vitiated by the allegation of fraud and misrepresentation, deserves to be set aside.

19. Accordingly, the writ petition is allowed. The impugned award dated

12.03.2022 passed by the National Lok Adalat, Bench No.2, Mungeli in Civil Appeal No.31-A/2018 is hereby set aside.

20. The matter is remitted to the First Appellate Court having jurisdiction over Civil Appeal No.31-A/2018 to decide the appeal afresh on its own merits, strictly in accordance with law, without being influenced by the observations made in the impugned Lok Adalat award and after providing proper opportunity of hearing to the parties 14 concerned. The parties are directed to appear before the learned First Appellate Court on 11.08.2026.

21. It is clarified that this Court has not expressed any opinion on the merits of the rival claims of the parties, and all issues are left open for adjudication before the Appellate Court on its own merits. No order as to costs. Sd/- (Ravindra Kumar Agrawal) Judge