Orders Obtained Fraudulently Can Be Set Aside Even If Fraud Is Detected After Limitation Period: Orissa High Court

"Regard being had to the above facts and the circumstances under which the lands were settled with the lessees in clear violation of the provisions of the OGLS Act with the fraud being played upon the authority concerned, who again failed to follow the procedures and as a result, the illegality was committed, the Court is of the considered view that since the fraud was detected in the year 1998 and thereafter, OP No.2 promptly took action and proceeded to cancel the leases, such action cannot be held as unfair and unjustified."

Factual Background:

The leases in question were granted in the year 1975 and thereafter, the Additional District Magistrate, Bhubaneswar (O.P. No. 2) exercising revisional jurisdiction under Section 7-A (3) of the Odisha Government Land Settlement Act, 1962 ('the OGLS Act') cancelled it. While cancelling the leases, O.P. No. 2 examined the lower court case records and detected material irregularities being committed by the then Tahasildar, Bhubaneswar.

The records did not reveal proper enquiries to have been conducted before settling the Government lands. It was noticed by O.P. No. 2 that no public notices were issued inviting objections and by a common Istahar all six applications were dealt with and subsequently, settled with the lessees and that again, without considering the eligibility criteria which was directly in violation of Rule 3 of the OGLS Rules, 1974.

Above all, O.P. No. 2, after perusal of field enquiry reports submitted by O.P. No. 3, noticed that income criteria/conditions vis-à-vis the lessees had not been fulfilled. Furthermore, O.P. No. 2 doubted if the lessees really belong to a particular community and in that respect, material facts had been suppressed purposefully in order to avail benefits under the OGLS Act. Besides the above, O.P. No. 2 observed serious violations of the provisions of the Orissa Communal, Forest & Private Lands (Prohibition of Alienation) Act, 1948, while settling the lands in favour of the lessees. Ultimately, with a conclusion that fraud has been perpetrated and as due procedures were not followed, rather, brazenly breached, cancelled the said leases.

This petition was filed by the petitioner assailing the legality of the impugned order passed by the O.P. No. 2, who cancelled the leases granted in favour of the original lessees vis-à-vis the lands subsequently transferred in her favour on the grounds inter alia that it is bad in law and therefore, liable to be set aside.

Contentions of the Petitioner:

Mr. S.C. Mohanty, counsel for the Petitioner contended that the leases were cancelled by O.P. No. 2 in flagrant violation of the second proviso to Section 7-A(3) of the OGLS Act which stipulates that no proceeding to be initiated by the revisional authority after expiry of 14 years from the date of the order and thus, it cannot be sustained in law. In support of such contention, he relied on the judgments in Laxmidhar Tarai v. Collector, Puri & Anr., 2018 (II) OLR 1012; Smt. Elley Pattnaik v. State of Orissa, 2012 (Supp.-II) OLR 506 and Mr. Purna Ch. Pradhan v. State of Orissa & Ors., 2006 (I) OLR 184. Further, he submitted that the materials on record or the impugned order did not speak of any fraud and therefore, cancellation of the leases by O.P. No.2 is bad in law and thus, liable to be quashed.

Contentions of the Respondents:

Mr. Sailaza Nandan Das, the Additional Standing Counsel argued that fraud was played upon by the lessees and apart from that, O.P. No. 2 noticed material irregularities being committed, while settling the lands under the OGLS Act. Therefore, he urged that impugned order should not be disturbed. He stressed that any order which has been obtained by perpetrating fraud is a nullity and cannot stand scrutiny of law at any point of time and for that, the provision of limitation would not apply. While contending so, he placed reliance on the decisions in Laxmipriya Tripathy v. State of Orissa and Ors. (in W.P.(C) No.3749 of 2013, decided on 7th August, 2013); and State of Orissa and others v. Brundaban Sharma & Anr., 1995 Supp.(3) SCC 249.

Decision of the Court:

The Court observed that in Smt. Elley Pattnaik (supra), the High Court had held that the revisional power under Section 7-A(3) of the OGLS Act may be exercised but within 14 years as per the second proviso thereof. In Laxmidhar Tarai (supra), the Court referred to the above case but was inclined to set aside the cancellation of lease rather on the ground that by such belated action, the poor lessees would suffer. The decision was against the backdrop of a finding by the authority concerned regarding violation of provisions OGLS Act and fraud, while settling the leases. Hence, it held that the decision in Laxmidhar Tarai is not an authority on exercise of revisional jurisdiction vis-à-vis the second proviso to Section 7-A(3) of the OGLS Act. Rather, the Court, in that case, was conscious of the fact that the leases had been cancelled after 14 years but was inclined to set aside the orders of cancellation on a different ground.

Further, it observed, in the case of Mr. Purna Ch. Pradhan (supra), the Court even after taking cognizance of the second proviso to Section 7-A(3) of OGLS Act, had to observe that in case of fraud committed for obtaining a lease, the starting point for computation of period of limitation as prescribed would be from the date of its detection.

Accordingly, the Court observed that in the instant matter, the suo motu revisional proceedings were initiated in 1998 when the alleged illegalities and fraud were detected by O.P. No. 2. The impugned order elaborately dealt with the material irregularities in procedure committed by the then Tahasildar, Bhubaneswar and also the fraud, while granting or obtaining the leases, as the case may be.

Again, no proper enquiries stated to have been made before granting the leases. It was not explicit from the records regarding the economic condition of the lessees, who claimed themselves as landless persons. Even, the tribal status vis-à-vis the lessees was in serious doubt as it carries with it a preferential treatment at the time of grant of leases.

Therefore, the Court observed that the leasehold lands could have been settled with landless persons under the OGLS Act instead of being in the hands of the Petitioner, had it been properly dealt with and in accordance with law.

Regard being had to the above facts and the circumstances under which the lands were settled with the lessees in clear violation of the provisions of the OGLS Act with the fraud being played upon the authority concerned, who again failed to follow the procedures and as a result, the illegality was committed, the Court concluded that since the fraud was detected in the year 1998 and thereafter, O.P. No. 2 promptly took action and proceeded to cancel the leases, such action cannot be held to be invalid.

Accordingly, the writ petitions were dismissed.

Case Title: Asha Hans v. State of Odisha & Ors.

Case No.: W.P.(C) No. 33349 of 2011

Judgment Dated: 06 April 2022

Coram: Chief Justice Dr. S. Muralidhar and Justice Radha Krishna Pattanaik

Authored By: Justice Radha Krishna Pattanaik

Counsel for the Petitioner: Mr. S.C. Mohanty, Advocate

Counsel for the Respondents: Mr. Sailaza Nandan Das, Additional Standing Counsel

Citation: 2022 LiveLaw (Ori) 40