The Bombay High Court has issued an extraordinary order sealing court records and staying proceedings after allegations that possession was obtained through a collusive suit designed to defraud the judicial system. This ruling underscores the judiciary’s non-negotiable duty to protect the integrity of its processes, even when fraud is alleged at the trial level.
Background & Facts
The Dispute
The petitioners, Brijmohan Chandrabhan Gupta and another, allege that Respondent No. 2, the State Legal Services Authority, orchestrated a collusive suit - L.E. & C. Suit No. 77 of 2025 - before the Small Causes Court, Mumbai. The suit allegedly resulted in an order passed by a Lok Adalat, which was then used to forcibly take possession of the petitioners’ property. The petitioners contend that the suit was fabricated, with no genuine dispute, and that the Lok Adalat order was obtained by suppressing material facts and misrepresenting the nature of the dispute.
Procedural History
- The petitioners filed Writ Petition No. 915 of 2026 seeking relief against the unlawful possession.
- They submitted that they had requested a copy of the Bailiff’s Report but were denied access.
- The petitioners argued that the entire proceeding was a sham, designed to circumvent due process and evade judicial scrutiny.
- The High Court, upon prima facie review, found the allegations sufficiently grave to warrant immediate intervention.
Relief Sought
The petitioners sought immediate stay of the possession order, sealing of the suit record, and transfer of the matter to the High Court for inquiry into possible fraud on the court. They also requested directions for disclosure of the Bailiff’s Report.
The Legal Issue
The central question was whether a judicial order obtained through a collusive suit, where material facts are deliberately concealed and the court is misled, can be treated as valid, and whether the High Court has the inherent power to intervene and seal records to prevent abuse of process.
Arguments Presented
For the Petitioner
Mr. M. M. Vashi, Senior Advocate, argued that fraud on the court vitiates all proceedings that follow, citing State of U.P. v. Ram Swarup and R. M. Malkani v. State of Maharashtra. He emphasized that Lok Adalat orders are not immune from scrutiny when obtained through collusion, and that the principle of natural justice was violated by denying access to the Bailiff’s Report. He contended that the High Court’s inherent powers under Article 226 empower it to set aside orders procured by fraud.
For the Respondent
Mr. Karl Tamboly, appearing for Respondent No. 2, conceded that the matter was sub judice before the Small Causes Court and that the Bailiff’s Report was yet to be formally recorded. He argued that the petitioners had not exhausted alternative remedies and that the High Court should not interfere at this stage. He maintained that the Lok Adalat process was statutorily protected under the Legal Services Authorities Act, 1987, and that allegations of fraud required full trial, not interim intervention.
The Court's Analysis
The Court rejected the argument that Lok Adalat proceedings are beyond judicial review. It held that any order obtained by fraud, regardless of the forum, is a nullity. The Court relied on the foundational principle that the administration of justice cannot be permitted to be subverted by collusion, as affirmed in K. C. S. Mani v. K. C. S. Mani.
"The court is not a mere instrument for the enforcement of private agreements; it is the guardian of public justice. When its process is weaponized through collusion, the remedy lies not in procedural technicalities but in the court’s inherent power to protect its own integrity."
The Court further held that the denial of the Bailiff’s Report, a critical document in determining the lawfulness of possession, amounted to a denial of procedural fairness. It emphasized that Article 14 and Article 21 require transparency in judicial proceedings, especially when property rights are at stake. The Court concluded that the gravity of the allegations - fraud on the court - demanded immediate action, not deference to pending proceedings.
The Verdict
The petitioners succeeded. The Court held that orders obtained by fraud on the court are void ab initio and directed the immediate sealing of the record in L.E. & C. Suit No. 77 of 2025. All further proceedings in the suit were stayed, and the entire record was ordered to be transmitted to the High Court for further inquiry.
What This Means For Similar Cases
Fraud on the Court Nullifies All Subsequent Orders
- Practitioners must now treat any order obtained through collusion, even via Lok Adalat, as voidable on petition.
- A mere allegation of fraud, if substantiated by prima facie evidence, justifies immediate judicial intervention.
- Courts may seal records and stay proceedings without waiting for final adjudication in lower forums.
Access to Court Records Is a Fundamental Right
- Denial of access to bailiff reports, court minutes, or settlement records in property disputes violates Article 21.
- Petitioners in writ proceedings must be granted copies of all material documents relied upon for dispossession.
- Failure to provide such documents may be treated as an attempt to conceal fraud.
Lok Adalat Orders Are Not Beyond Judicial Scrutiny
- Lok Adalat settlements are not sacrosanct if they are procured by misrepresentation or suppression.
- The Legal Services Authorities Act does not immunize fraudulent conduct from judicial review.
- Writ jurisdiction under Article 226 remains available to challenge such orders, even where alternative remedies exist.
