Oral Judgment: (B.R. Gavai, J.)
1. Both the appeal are heard finally with consent of the parties. The appellants challenge the order passed by the learned Single Judge of this court dated 17.1.2012 thereby dismissing the petitions filed by the present appellants and upholding the order passed by the learned Maharashtra State Cooperative Appellate Court dated 1.7.2011, by which the learned Appellate Court had reversed the order passed by the learned Cooperative Court dated 23.5.2011 holding the disputes filed by the respondent to be barred by limitation and as such dismissing the same.
2. The facts in brief giving rise to the present appeals are as under â
That the appellants being members of the respondent society were alloted plots in the respondent society. Sale deeds in respect of said plots came to be executed on 7.8.1987. It appears that a correction deed was executed betweens the appellants and the respondent on 12.8.2008. A dispute came to be filed by the respondent society on 14.1.2011, interalia praying for quashing and setting aside the sale deeds dated 7.8.1987 and for directing the present appellants to surrender plot nos. 3 and 4 admeasuring 3600 sq. fts. In the said dispute a preliminary objection came to be filed by the present appellants on the ground that the same is barred by limitation. An application Under Order 7 Rule 11 was also filed by the present appellants. However, the learned Judge of the Co-operative Court held that for deciding the preliminary issue as well as the application under Order 7 Rule 11 it would be necessary for the parties to lead evidence and as such vide order dated 23.5.2011 framed preliminary issue and directed the parties to lead evidence. Accordingly evidence was led on behalf of the respondent society. After evidence was lead, the learned Co-operative Court came to a finding of fact that the dispute was beyond limitation and as such dismissed the same. Being aggrieved thereby appeals came to be preferred by the respondent society before the learned Cooperative Appellate Court. The learned Cooperative Appellate Court allowed the appeals and reversed the order passed by the learned Cooperative Court. Being aggrieved thereby the appellants filed writ petitions before this court being Writ Petition Nos. 3548/11 and 3549/2011. The learned Single Judge dismissed the writ petitions. Being aggrieved thereby the present appeals are filed.
3. Shri Samarth, the learned counsel appearing on behalf of the appellants submits that in so far as the dispute praying for cancellation of the sale deed is concerned, assuming that the request for cancellation has to be made within a period of 10 years, still the dispute would be beyond limitation inasmuch as the cause of action would arise on or prior to 7.8.1987 since the sale deeds were executed on 7.8.1987. It is submitted that if the dispute is not filed within a period of three years therefrom, the same would not be within limitation. He submits that in so far as the finding of the appellate court regarding the detection of the fraud and the dispute being filed within a period of three years therefrom is concerned, the same finding is also not sustainable. He submits that there is no requirement that a member of the society has to be resident of Nagpur and unless a person is resident of Nagpur he cannot be allotted a plot. He therefore, submits that findings of the appellate court that a cause of action arose in favour of the respondent on 12.8.2008 is without any foundation.
4. As against this, Shri Dharmadhikari, the learned counsel for the respondent society submits that the Learned Cooperative Appellate court and the learned Single Judge have taken a correct view. It is submitted that the fraud vitiates everything since it goes to the root of the matter, as it affects the very solemnity of the proceeding. The learned counsel relying on the judgment of the Apex Court in the case of Santosh Vs. Jagat Ram and another reported in (2010)3 SCC 251 submits that the finding of the appellate Cooperative Court as well as the learned Single Judge that on account of detection of fraud the cause of action arose to the disputant and as such the dispute was within limitation warrants no interference. Shri Dharmadhikari further submitted that the very knowledge regarding the intention of the appellants to sell the plots also gave a cause of action to file the dispute.
5. In so far as the first ground is concerned, we find that undisputedly, even assuming that there is requirement that a construction has to be made within a period of 10 years from the date of execution of sale deed, even then the dispute would not be within limitation. Admittedly, the sale deed is executed om 7.8.1987. The period of 10 years would come to an end on 7.8.1997. The dispute would, therefore, be required to be filed within a period of three years i.e. on or before 7.8.2001. In that view of the mater, in so far as the dispute on that ground is concerned, the same would be undispsutedly beyond the period of limitation.
6. Now the only question arises as to whether the finding of the Learned Appellate court, that on the ground of detection of fraud a cause of auction arose on 12.8.2008 is correct or not.
7. No doubt that we are not considering the matter on merits. However, a limited inquiry as to whether from the evidence led on record, a case of playing any fraud is made out or not would be permissible, inasmuch as the Learned Appellate Court as well as the learned Single Judge has come to a finding that the dispute is within limitation since it is within a period of three years from the detection of the fraud which gave a cause of action for filing the dispute.
8. It will be relevant to refer to clause D.1.2 of the Byelaws.
D.1.2 Qualifications and disqualifications attached to class or classes of members:
i) Any person over 18 years of age competent to contract to and desirous of taking a plot and is residing or intends to reside within the area of operation of the society and who is constructing or acquiring ownership of a dwelling house constructed thereon for his own use will be eligible for admission as a member per provision of Section 22 of the Maharashtra Co-operative Act, 1960, and Rule 19 of MOS Rule 1961, provided that at least 10 of the such promoter members each being a member of different family, shall be resident of the area of operation of the society.
ii) No person shall be eligible for admission as a member of the Society if he has been adjudicated as an insolvent or is an undischarged insolvent, or has been sentenced for any offence involving moral turpitude, provided that the disqualification shall not apply where more than five years have elapsed from the date of such sentence.
iii) No person shall be admitted as an ordinary member unless;
9. A perusal of the said clause would thus clearly show that any person who is more than 18 years of age and competent to contract and desirous of taking a plot and is residing or intends to reside within the area of operation of the society and is constructing or acquiring ownership of a dwelling house constructed thereon for his own use would be entitled to become member of the society. It is the contention of the disputant that though the appellants were residents of Chhindwara, they have fraudulently shown their address at Chhoti Dhantoli, Nagpur.
10. The fraud has been defined in the Contract Act.
17.âFraudâ defined .âFruadâ means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1) the suggestion, as a fact, or that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Explanation. â Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.
11. Thus, it can be seen that as per the definition as given in the Contract Act, âfraud would mean and include any of the acts which are given in the said Act with intention to deceive another party or induce him to enter into a contract, namely the suggestion, as a fact, or that which is not true, by one who does not believe it to be true, the active concealment of a fact by one having knowledge or belief of the fact, a promise made without any intention of performing it, any other act fitted to deceive, any such act or omission as the law specially declares to be fraudulent.
12. As already discussed herein above the very bye-laws permit a person to become a member who either resides at Nagpur or intends to reside at Nagpur. The Bye-laws do not provide that only a member who is resident of Nagpur would be entitled to become a member of the society. It can thus be clearly seen that the appellants could have very well become members of the society even if they were not residents of Nagpur at that point of time. Therefore, it is not the case wherein though the appellants did not qualify for membership, but in order to show that they were qualified, they have given some information which is believed to be untrue or have concealed something which was material only in order to get the membership of the said society.
13. What would amount to fraud or not has been observed by the Apex Court in the case of Ramesh Kumar and another Vs. Furu Ram and another reported in (2011) 8 S.C. 613.
âFraud can be of different forms and different hues. It is difficult to define it with precision, as the shape of each fraud depends upon the fertile imagination and cleverness of who conceives and perpetrates the fraud. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. âFraudâ is knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. âFraudâ is also defined as a concealment of false representation through a statement or conduct that injures another who relies on it in acting (vide Blacks Law Dictionary). Any conduct involving deceipt resulting in injury, loss or damage to someone is fraud.â
14. It can thus be seen that the Apex Court has held the ingredients of the fraud are an intention to deceive, use of unfair means, deliberate concealment of material fact or abuse of position of confidence. The Apex Court has further observed that fraud is knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. The Apex court further held that concealment or false representation through a statement or conduct that injures another who relies on it in acting would also amount to fraud. Any conduct involving deceit resulting in injury, loss or damage to some one is also a fraud.
15. At the cost of repetition, we may say that nothing of that sort can be found in the present case. There was no requirement for the appellants to give an incorrect address inasmuch as even if they had a address of another place other than Nagpur, they could have very well got membership of the society. A perusal of the bye-laws would clearly show that even a person intending to reside at Nagpur was eligible to become a member. As such, it is not a case of concealment or misrepresentation so as to fix in a category in which the appellants could not have come unless they made a false representation or concealed some material facts. Apart from that, it is nobodys case that the same has been done by the appellants to injure another or any act of the appellants has resulted in any injury, loss or damage to someone.
16. In that view of the matter, we find that the very finding of the learned Appellate Court that a fraud was detected on 12.8.2008 is without any basis. It can be very well seen that on the said date a correction deed was executed between the appellants and the respondent society which was for correction of the minor words describing the description of a plot.
17. It is the contention of the respondent that the address given in some of the documents annexed along with the correction deed falsify that the address given in the sale deed was not a correct address. Merely because in some documents some different address is shown than the one shown in the previous sale deed, would not if so facto infer that the address given was an incorrect address. Apart from that, as has been already held herein above, being resident of Nagpur was not an essential condition for getting the membership of the society.
18. So far as the contention regarding the attempts on the part of the appellants to sell the plot is concerned, it will be relevant to refer to the following para of the sale deed.
19. It can thus be seen that the clause specifically provides that the ownership of the plots in question vested in the appellants and the appellants were free to enjoy the said property. The only rider was that in case the appellants desired to sell, gift or mortgage the said plot, the same could not have been done without obtaining prior permission of the society. It is, thus, clear that though a right of complete enjoyment was vested upon the appellants, they could not have, in any case, sold or transferred the plots to any one without prior permission of the society. In that view of the matter, the contention in that regard is also without any substance.
20. It is pertinent to note that it is the contention of the appellants that the Nagpur Improvement Trust has also regularized the plots in favour of the appellants on the basis of no objection given by the respondent society. Though this fact is disputed by the respondent, we do not find that it will have any bearing on the issue in question.
21. In that view of the matter, we find that the learned Cooperative Appellate Court erred in reversing the order passed by the learned Cooperative Court. So also, the learned Single Judge has erred in confirming the order passed by the Learned Cooperative Appellate Court. It is further to be noted that the Learned Cooperative Appellate Court could have interfered with the order passed by the Learned Cooperative Court only when the view taken by the Cooperative Court was impossible or perverse. The Learned Appellate Court also could not have interfered with the order of the Learned Cooperative Court if it found that two views are possible and the other view than the view taken by the Learned Cooperative Court was more probable one.
22. The judgment of the Apex Court in the case of Santosh Vs. Jagat Ram and Another reported in (2010) 3 SCC 251 is relied on by the learned counsel for the respondent society. No doubt, fraud vitiates everything inasmuch as it goes to the root of the case. If the court finds that an act of fraud has been committed by a party, and that fraud has been noticed by another party at the subsequent stage, undisputedly the cause of action would arise from detection of a fraud. However, as to whether any particular act or omission constitutes fraud or not will depend on facts of each case and there cannot be any straight jacket formula for the same. As already discussed above, no case of fraud is made out in the present case. As such, the said judgment would not be applicable in the facts of the present case.
23. In the result, the appeal is allowed. The orders passed by the Learned Single Judge and the Learned Cooperative Appellate Court are set aside and the order passed by the Cooperative Court is restored.