The bench of Justice BR Gavai and CT Ravikumar of the Supreme Court of India held that a judgment or decree obtained by fraud is to be treated as a nullity. Justice Gawai authored the judgment for the bench and held that "that non-disclosure of the relevant and material documents with a view to obtain an undue advantage would amount to fraud. It has been held that the judgment or decree obtained by fraud is to be treated as a nullity. We find that respondent No.9 has not only suppressed a material fact but has also tried to mislead the High Court. On this ground also, the present appeal deserves to be allowed."

While allowing the appeal Supreme Court also observed that "It could thus be seen that a necessary party is a person in whose absence no effective decree could be passed by the Court. It has been held that if a “necessary party” is not impleaded, the suit itself is liable to be dismissed." and further the court held that "It could thus be seen that this Court had held that, even if a subsequent allottee does not have an independent right, he/she still has a right to be heard and to make submissions defending the order of cancellation."

The brief facts of the case are as under:-

Respondent No.9 herein-Kiran Devi (the original writ petitioner) was granted a licence for running a fair price shop at Gram Panchayat Anta, Tehsil Rasoolabad, District Kanpur Dehat. Various complaints were received by the Sub-Divisional Officer, Rasoolabad, District Kanpur Dehat (hereinafter referred to as “the SDO”), with regard to malpractices committed by the said fair price shop dealer. As such, a site inspection of the fair price shop was done on 3rd June 2017 through the Regional Supply Inspector. In the site inspection also, various irregularities and malpractices were found in the running of the said fair price shop. As such, a show cause notice came to be issued to respondent No.9 by the SDO on 7th July 2017. Initially, on the date fixed, respondent No.9 did not file her explanation. Subsequently, she submitted her explanation on 16th August 2017.

Thereafter, an inquiry was conducted by the SDO. Various statements were recorded. At the conclusion of the inquiry, the SDO found the charges to be proved and as such, vide order dated 18th November 2017, cancelled the Fair Price Shop licence of respondent No.9.

Being aggrieved by the order passed by the SDO, respondent No.9 carried an appeal to the Appellate Authority. The said appeal also came to be dismissed by the Appellate Authority vide order dated 20th July 2018. It is to be noted that, in the meantime, licence to run the said fair price shop was granted in favour of the present appellant-Ram Kumar vide order dated 15th May 2018. This was done on the basis of the decision taken by the Tehsil Level Selection Committee dated 19th April 2018. This fact was specifically noted in the order of the Appellate Authority dated 20th July 2018.

Being aggrieved by the aforesaid order passed by the Appellate Authority, respondent No.9 preferred a writ petition before the High Court of Judicature at Allahabad being Civil Misc. Writ Petition No. 29832 of 2018. The High Court came to a finding that the cancellation of the Fair Price Shop licence of respondent No.9 was done without following the full-fledged inquiry process and, therefore, relying on the Full Bench decision of the Allahabad High Court in the case of Puran Singh vs. State of U.P. and others1, allowed the writ petition as aforesaid.

Case Details:-

CIVIL APPEAL NO.4258 OF 2022
RAM KUMAR                                   ...APPELLANT(S)
VERSUS
STATE OF UTTAR PRADESH AND ORS. ...RESPONDENT(S)

Read the full judgment:-

https://main.sci.gov.in/supremecourt/2019/14539/14539_2019_12_1501_38648_Judgement_28-Sep-2022.pdf