Case Note & Summary
The appeal arises from a long-standing property dispute. The appellant, Time Field Corporation, a partnership firm, filed a suit in 1978 against Shri Sankalp Co-operative Housing Society Ltd. and its members seeking possession of certain premises. In 1993, a consent decree was passed in the suit, purportedly with the consent of the society. However, the society and its members later alleged that the consent decree was obtained by fraud and misrepresentation, as the appellant had suppressed material facts and misled the court. In 1999, the society filed a Notice of Motion seeking to set aside the consent decree. The learned Single Judge allowed the motion, setting aside the decree. The appellant appealed against this order. The Division Bench of the Bombay High Court dismissed the appeal, holding that the consent decree was indeed obtained by fraud and misrepresentation, and that the society and its members were not bound by it. The court noted that the appellant had failed to implead the society and its members as necessary parties, and the consent decree was obtained without their knowledge or consent. The court also held that the application to set aside the decree was not barred by limitation, as the fraud came to light only when the society became aware of the decree. The court upheld the order of the learned Single Judge, dismissing the appeal with costs.
Headnote
A) Civil Procedure - Consent Decree - Setting Aside - Fraud and Misrepresentation - Order 23 Rule 3, Code of Civil Procedure, 1908 - The court held that a consent decree obtained by fraud and misrepresentation is a nullity and can be set aside even at the instance of persons who were not parties to the decree, if they are affected by it. The court found that the consent decree was obtained by the appellant by suppressing material facts and misrepresenting the status of the suit property, and thus the learned Single Judge correctly set it aside. (Paras 1-25) B) Co-operative Society - Rights of Members - Non-Joinder - Necessary Parties - Maharashtra Co-operative Societies Act, 1960 - The court held that the members of a co-operative society are necessary parties in a suit affecting the society's property, and a consent decree obtained without their consent or knowledge is not binding on them. The court noted that the appellant failed to implead the society and its members, and the consent decree was obtained behind their backs. (Paras 10-20) C) Limitation - Setting Aside Decree - Article 59, Limitation Act, 1963 - The court held that the application to set aside the consent decree was not barred by limitation as the fraud came to light only when the society and its members became aware of the decree, and they filed the application within three years of such knowledge. (Paras 15-18)
Issue of Consideration
Whether a consent decree obtained by fraud and misrepresentation can be set aside at the instance of a co-operative society and its members who were not parties to the decree, and whether the appeal against such setting aside is maintainable.
Final Decision
Appeal dismissed with costs. The order of the learned Single Judge setting aside the consent decree is upheld.
Law Points
- Consent decree
- fraud
- misrepresentation
- setting aside decree
- Order 23 Rule 3 CPC
- inherent powers of court
- non-joinder of necessary parties
- co-operative society
- members' rights
