High Court of Punjab and HaryanaCWP/22525/2025dismissed

Narayan Singh v. Dakshin Harayana Bijli Vitran Nigam Ltd And ORS

2025-08-21Mr. Justice Harpreet Singh Brar8 pages

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The Punjab State Power Corporation Limited, Patiala and others CWP No.15976 of 2013 decided on 25.10.2016Sukhdev Singh vs. Shiromani Gurdwara Parbandhak Committee CWP No.17784 of 2015 decided on 18.10.2016 Rajwant Kaur vs. State of Punjab and others CWP No.3728 of 2012 decided on 22.07.2013.

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15. Commission of fraud on court and suppression of material facts are the core issues involved in these matters. Fraud as is well known vitiates every solemn act. Fraud and justice never dwell together.

16. Fraud is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response

to the conduct of the former either by word or letter.

17. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud.

18. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad.

19. In Derry v. Peek, (1889)14 AC 337 : (1886,90) All ER Rep 1 : 58 LJ Ch 864 : 61 LT 265 (HL). it was held:

"In an `action of deceit the plaintiff must prove actual fraud. Fraud is proved when it is shown that a false representation has been made knowingly, or without belief in its truth, or recklessly, without caring whether it be true or false.

A false statement, made through carelessness and without reasonable ground for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud. Such a statement, if made in the honest belief that it is true, is not fraudulent and does not render the person making it liable to an action of deceit.

20. In Kerr on Fraud and Mistake, at p. 23, it is stated: "The true and only sound principle to be derived from the cases represented by Slim v. Croucher, (1860)1 De GF & J 518 : 29 LJ Ch 273 : 2 LT 103 : 45 ER 462. is this: that a representation is fraudulent not only when the person making it knows it to be false, but also when, as Jessel, M.R., pointed out, he ought to have known, or must be taken to have known, that it was false. This is a sound and intelligible principle, and is, moreover, not inconsistent with Derry v. Peek, (1889)14 AC 337 : (1886,90) All ER Rep 1 : 58 LJ Ch 864 : 61 LT 265 (HL).. A false statement which a person ought to have known was false, and which he must therefore be taken to have known was false, cannot be said to be honestly believed in. 'A consideration of the grounds of belief', said Lord Herschell, 'is no doubt an important aid in ascertaining whether the belief was really entertained. A man's mere assertion that he believed the statement he made to be true is not accepted as conclusive proof that he did so.'"

21. In Bigelow on Fraudulent Conveyances, at p. 1, it is stated: "If on the facts the average man would have intended wrong, that is enough."

22. It was further opined:

"This conception of fraud (and since it is not the writer's, he may speak of it without diffidence), steadily kept in view, will render the administration of the law less difficult, or rather will make its administration more effective. Further, not to enlarge upon the last matter, it will do away with much of the prevalent confusion in regard to 'moral' fraud, a confusion which, in addition to other things, often causes lawyers to take refuge behind such convenient and indeed useful but often obscure language as 'fraud upon the law'. What is fraud upon the law? Fraud can be committed only

against a being capable of rights, and 'fraud upon the law' darkens counsel. What is really aimed at in most cases by this obscure contrast between moral fraud and fraud upon the law, is a contrast between fraud in the individual's intention to commit the wrong and fraud as seen in the obvious tendency of the act in question."

23. Recently this Court by an order dated 3,9,2003 in Ram Preeti Yadav v. U.P. Board of High School & Intermediate Education, (2003)8 SCC 311 : JT 2003 Supp (1) SC 25. held:

"Fraud is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. Although negligence is not fraud but it can be evidence on fraud. (See Derry v. Peek, (1889)14 AC 337:.) In Lazarus Estates Ltd. v. Beasley, (1956)1 All ER 341: the Court of Appeal stated the law thus: 'I cannot accede to this argument for a moment. No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court , no order of a minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever;"

In S.P. Chengalvaraya Naidu v. Jagannath, (1994)1 SCC 1 this Court stated that fraud avoids all judicial acts, ecclesiastical or temporal."

24. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous."9 %( < *

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$ "31. As noted by us, all the above decisions were rendered by a Division Bench of this Court consisting of two,Judges and having bestowed our serious consideration to the issue, we consider that while dealing with such an issue, the Court will have to bear in mind the various cardinal principles before granting any relief to the aggrieved party, namely: (i) Fraudulently obtained orders of appointment could be legitimately treated as voidable at the option of the employer or could be recalled by the employer and in such cases merely because the respondent employee has continued in service for a number of years, on the basis of such fraudulently obtained employment, cannot get any equity in his favour or any estoppel against the employer.

(ii) Verification of the character and antecedents is one of the important criteria to test whether the selected candidate is suitable to the post under the State and on account of his antecedents the appointing authority if find not desirable to appoint a person to a disciplined force can it be said to be unwarranted. (iii) When appointment was procured by a person on the basis of forged documents, it would amount to misrepresentation and fraud on the employer and, therefore, it would create no equity in his favour or any estoppel against the employer while resorting to termination without holding any inquiry.

(iv) A candidate having suppressed material information and/or giving false information cannot claim right to continue in service and the employer, having regard to the nature of employment as well as other aspects, has the discretion to terminate his services. Purpose of calling for information regarding involvement in any criminal case or detention or conviction is for the purpose of verification of the character/antecedents at the time of recruitment and suppression of such material information will have clear bearing on the character and antecedents of the candidate in relation to his continuity in service.

(vi) The person who suppressed the material information and/or

gives false information cannot claim any right for appointment or continuity in service.

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