"Fraud And Justice Can't Dwell Together": Top Court Recalls Compensation Order

The Supreme Court on Wednesday recalled its order on compensation awarded over a land in Gautam Budh Nagar in Uttar Pradesh acquired by the Noida authority, saying it was obtained by fraud and has to be erased from the records, being a nullity.

A bench of Justices Surya Kant, Ujal Bhuyan and Dipankar Datta adjudicated the dispute over the ownership of land, which was purchased by three people - Reddy Veerana, Vishnu Vardhan and one T Sudhakar -  in 1997, and acquired by Noida in 2005 and now forms part of Noida's commercial hub in Sector 18.

It was alleged that Mr Veerana fraudulently claimed sole ownership of the land in several proceedings before diverse judicial fora, from civil courts to the high court and to the Supreme Court in 2022, when the top court had passed an order for enhanced compensation to Mr Veerana.

Mr Veerana was alleged to have fraudulently ousted Mr Vardhan and Mr Sudhakar and pocketed the compensation amount.

Vishnu Vardhan contested the claim of Mr Veerana by initiating several proceedings and sought a recall of the May 2022 order of the court.

Justice Datta, who penned the verdict for the bench, said from the multiple decisions of this court on "fraud, what follows is that fraud and justice cannot dwell together".

"The legislature never intends to guard fraud, the question of limitation to exercise power does not arise, if fraud is proved, and even finality of litigation cannot be pressed into service to absurd limits when a fraud is unravelled." The order added, "However, even if Vishnu had not applied for a review - as a logical corollary of the aforesaid discussions - the decision in Reddy Veerana (2022 verdict), too, having been obtained by Reddy by playing fraud, has to be erased from the records being a nullity."

The bench also set aside the Allahabad High Court's October 28, 2021, verdict, which accepted Veerana as the sole owner of the property and enhanced the compensation from Rs 152.04 per sq. metre to Rs 1,10,000 per sq. metre, saying the fraud had vitiated the entire proceedings.

"As a logical corollary of the impugned order being set aside, it would follow that the decision of this Court in Reddy Veerana (2022 verdict), upholding the same, which too was obtained by playing fraud, will also be a nullity, and thus stand recalled in exercise of our inherent powers," the bench ordered.

Referring to a 1994 verdict of the top court, the bench said that fraud was held to be an act of deliberate deception with the design of securing something by "taking unfair advantage of another: a deception to gain by another's loss".

"We begin with recording the realisation that undoubtedly, there seems to be much more than what has met our eyes. However, like all courts, we are bound to decide cases based on the evidence on record, judicially noticeable facts, and the applicable law. Despite Reddy and Vishnu – and to a certain extent Sudhakar – having used the judicial process obviously to secure their personal interests, we cannot be bystanders," it said.

The verdict continued, "If things have happened with a telling effect on public interest, resulting in public funds from the public exchequer being drained, the same has to be dealt with within the bounds of our jurisdiction. In our pursuit for the truth and to uphold the rule of law, we must adhere to established principles unless a valid reason warrants deviation.” The top court remanded the case back to the high court with a direction to implead Vishnu Vardhan and T Sudhakar, the other two owners of the land, as additional respondents. 

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