Order obtained by Fraud is Nullity

1. What is Nullity? : Definition

Nullity is the condition of being legally void or invalid. It refers to something that is treated as though it never existed because it lacks legal force or effect. In legal terms, an act, document, or order that is a nullity is considered to have no legal validity due to a fundamental error or defect, such as fraud, lack of jurisdiction, or failure to meet essential legal requirements.

2. Significance of Nullity in Law

The significance of nullity in law lies in its role in maintaining the integrity of legal processes and ensuring that only valid, lawful acts and decisions have legal effect. When something is declared a nullity, it is treated as though it never existed, meaning it cannot be enforced or relied upon. Nullity therefore ensures:

• Prevention of injustice: A nullity prevents the enforcement of invalid or unlawful actions, such as court orders obtained through fraud, lack of jurisdiction, or improper procedure, ensuring that justice is not compromised.

• Legal clarity: It establishes that certain acts or decisions are entirely without legal effect, clearing any confusion or ambiguity in the law.

• Protection of rights: Declaring something a nullity helps protect the rights of individuals, as any legal decision or document that is fundamentally flawed can be disregarded to avoid unjust consequences.

• Safeguarding judicial integrity: It ensures that the court system remains credible and trustworthy by preventing the recognition of decisions based on fraud, misrepresentation, or errors that would undermine the rule of law.

The concept of nullity is essential for upholding justice and ensuring that only valid, legally sound actions and decisions are effective in the legal system.

3. Why are Court Orders obtained by fraud considered a Nullity?

Court orders obtained by fraud are considered a nullity because they are based on deceitful or false representations, undermining the integrity of the judicial process. Fraud vitiates the entire proceeding, as it involves dishonesty or misrepresentation that influences the court’s decision. Such orders are treated as void because they lack the legal foundation required for validity. The principle is that a court of law cannot validate a decision that was induced by fraud, as it goes against the principles of justice and fairness. Therefore, these orders can be challenged and set aside.

4. Supreme Court Judgments: Order obtained by fraud is Nullity

The Supreme Court of India in S.P. Chengalvaraya Naidu (dead) by LRs Jagannath (dead) by LRs and Ors. AIR 1994 SC 853 ruled-

"The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation. A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party."

In A.V. Papayya Sastry & Others vs Govt. of A.P. and Others, (2007) 4 SCC 221, the Supreme Court held-

21. Now, it is well­ settled principle of law that if any judgment or order is obtained by fraud, it cannot be said to be a judgment or order in law. Before three centuries, Chief Justice Edward Coke proclaimed: “Fraud avoids all judicial acts, ecclesiastical or temporal.”

22. It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the court, tribunal or authority is a nullity and non est in the eye of the law. Such a judgment, decree or order—by the first court or by the final court—has to be treated as nullity by every court, superior or inferior. It can be challenged in any court, at any time, in appeal, revision, writ or even in collateral proceedings.

23. In the leading case of Lazarus Estates Ltd. v. Beasley [(1956) 1 All ER 341 : (1956) 1 QB 702 : (1956) 2 WLR 502 (CA)] Lord Denning observed : (All ER p. 345 C) “No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud.”

24. In Duchess of Kingstone, Smith's Leading Cases, 13th Edn., p. 644, explaining the nature of fraud, de Grey, C.J. stated that though a judgment would be res judicata and not impeachable from within, it might be impeachable from without. In other words, though it is not permissible to show that the court was “mistaken”, it might be shown that it was “misled”. There is an essential distinction between mistake and trickery. The clear implication of the distinction is that an action to set aside a judgment cannot be brought on the ground that it has been decided wrongly, namely, that on the merits, the decision was one which should not have been rendered, but it can be set aside, if the court was imposed upon or tricked into giving the judgment.

25. It has been said : fraud and justice never dwell together (fraus et jus nunquam cohabitant); or fraud and deceit ought to benefit none (fraus et dolus nemini patrocinari debent).

26. Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the loss of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of “finality of litigation” cannot be stretched to the extent of an absurdity that it can be utilised as an engine of oppression by dishonest and fraudulent litigants.