Non-Disclosure Of Material Facts, Sans Intent To Deceive, Won’t Render A Decree Fraudulent: SC [Read Judgment]

Bald allegation of fraud without proof and intent to deceive would not render a decree obtained by a party as fraudulent, the Bench held.

The Supreme Court in Harjas Rai Makhija vs..Pushparani Jain, has held that a mere concealment of material facts or non-disclosure, without intent to deceive or a bald allegation of fraud without proof and intent to deceive, would not render a decree obtained by a party as fraudulent.

The appellant in this case had filed a suit in 2002 alleging that a decree was obtained by a plaintiff in another case, (which had ultimately reached the Apex Court which had confirmed the same) in a fraudulent manner and is void and not worthy of being executed. That suit was dismissed by the district court as well as high court.

A bench comprising Justice Madan B Lokur and Justice Adarsh Kumar Goel rejected his contentions and observed that he had an opportunity to prove the allegation of fraud when he filed an application under Order XLI Rule 27 of the CPC.

The court said: “When there is an allegation of fraud by non-disclosure of necessary and relevant facts or concealment of material facts, it must be inquired into. It is only after evidence is led coupled with intent to deceive that a conclusion of fraud could be arrived at. A mere concealment or non-disclosure without intent to deceive or a bald allegation of fraud without proof and intent to deceive would not render a decree obtained by a party as fraudulent. To conclude in a blanket manner that in every case where relevant facts are not disclosed, the decree obtained would be fraudulent, is stretching the principle to a vanishing point.”

The court observed that fraud has not been proved but is merely alleged and dismissed the appeal with Rs.50,000 cost.

Read the Judgment here.