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Ram Kumar vs State of Uttar Pradesh and Ors.

Civil Appeal · 2022 INSC 1034Decided 28 Sept 2022
Civil Appeal No. 4258 of 2022
B.R. Gavai · C.T. Ravikumar

Background

Kiran Devi (respondent No. 9) held a licence for a government-subsidized "fair price shop" (ration shop) but her licence was cancelled by the Deputy Collector after an inquiry found malpractices, and her appeal against cancellation was also dismissed. While her appeal was still pending, the appellant Ram Kumar was regularly appointed as the new fair price dealer for that shop by the Tehsil Level Selection Committee. Kiran Devi then filed a writ petition in the Allahabad High Court without making Ram Kumar a party, and falsely claimed in her petition that no third-party allotment had been made and that her shop had merely been "attached" to another shop holder. The High Court, unaware of the true facts, restored her licence relying on a procedural-inquiry-defect precedent.

Decision Breakdown

The Supreme Court held that Ram Kumar, as the subsequent regular allottee whose rights would be directly affected, was a necessary party who should have been impleaded and heard before the High Court restored the earlier licence: his absence alone made the High Court's judgment unsustainable. More seriously, the Court found that Kiran Devi knew of Ram Kumar's appointment (it was expressly recorded in the Appellate Authority's own order) yet falsely told the High Court in her writ petition and grounds that no third-party allotment had occurred, which amounted to suppression of a material fact and misleading the court, not just an incidental error. Relying on S.P. Chengalvaraya Naidu, the Court held such fraud renders a resulting judgment a nullity, and accordingly set aside the High Court's order and restored the original cancellation of Kiran Devi's licence.

Lesson Learnt

Anyone with a stake in the outcome of pending litigation, such as a person who has been given the very licence or benefit being fought over, must be made a party to that case, and a litigant who conceals from the court that such a person exists risks having any favourable order thrown out as obtained by fraud.

Official source (sci.gov.in)View Judgment (PDF)

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