Bombay High Court Allows Notice of Motion to Set Aside Consent Decree in Co-operative Society Dispute; Finds Fraud and Lack of Authority. Consent Decree Vitiated by Dual Representation of Husband-Wife and Absence of Society's Authorization Under Maharashtra Co-operative Societies Act, 1960.

The notice of motion seeks to set aside a consent decree passed in a money suit arising from a works contract between a partnership firm and a co-operative housing society.

The applicants (defendant society and its members) seek to set aside the consent decree dated 19th April 1993 and all subsequent amendments and the conveyance executed in pursuance thereof.

The consent decree was allegedly obtained by fraud and misrepresentation; the person representing the defendant society was not a member and had no authority, and he had a conflict of interest as partner of the plaintiff firm.

The consent decree was passed on 19th April 1993; it was subsequently amended by orders dated 28th September 1993, 20th February 1996, 19th December 1996 and 17th February 1999; the Deputy Registrar appointed a Committee of Administrators under section 77A of the Act in 1998; an appeal against that order was dismissed.

Whether the consent decree and subsequent orders should be set aside on the ground that they were obtained by fraud and misrepresentation, and without proper authority?

The applicants contended that the consent decree was obtained by a clear and egregious fraud practiced by the husband-wife duo; Yashwant Jawale was not a member of the society and had no authority to represent it; he had earlier represented the plaintiff in the same suit; the consent terms were executed without any resolution of the society; the entire proceeding was vitiated by conflict of interest and misrepresentation.

Fraud vitiates all proceedings; a consent decree obtained by one party without proper authority and by misrepresentation, especially when the representative of the opposite party has a conflict of interest, is a nullity and can be set aside.

The consent terms were executed on behalf of the plaintiff by Mrs. Padma Jawale and on behalf of the defendant by Mr. Yashwant Jawale, the husband-wife duo. The applicants have ... alleged that Yashwant Jawale, who claimed to represent the defendant society was not at all authorised to represent the society. He was admittedly not a member of the defendant society. a clear and egregious fraud was practiced by the husband-wife duo.

1968: Defendant society registered under Maharashtra Co-operative Societies Act, 1960. 20 April 1975: Works contract agreement between plaintiff firm and defendant society. 30 April 1976: Further agreement between parties. 1978: Suit No. 469 of 1978 filed by plaintiff Time Field Corporation for recovery of dues and declaration of charge. 10 January 1979: Defendant society filed written statement contesting claim. 8 October 1984: Irrevocable general power of attorney executed by society members in favor of Yashwant Jawale and another. 19 April 1993: Consent decree passed in Suit No. 469 of 1978 on terms signed by Padma Jawale for plaintiff and Yashwant Jawale for defendant. 28 September 1993: Consent decree amended to provide that decree to act as conveyance. 20 February 1996: Decree amended to incorporate city survey number. 19 December 1996: Further amendment permitted. 17 February 1999: Decree amended to add that defendant society ceased to exist. 9 March 1998: Respondents addressed letter to Divisional Registrar seeking intervention. 7 September 1998: Deputy Registrar appointed Committee of Administrators under Section 77A of the Act. 14 December 1998: Appeal by Padma Jawale dismissed by Joint Registrar. 1999: Notice of Motion No. 3831 of 1999 filed by defendant society and members to set aside consent decree and amendments. 2 June 2020: Judgment pronounced allowing notice of motion and setting aside consent decree.

• Maharashtra Co-operative Societies Act, 1960: 77A, 80