Fraud Must Be Proved, Not Alleged: Punjab & Haryana High Court Dismisses RSA in Khadi Property Dispute
Case Name: Khadi Sewa Sangh v. Punjab Khadi and Village Industrial Board & Anr.
Date of Judgment: 08 April 2026
Citation: RSA No. 2170 of 2000
Bench: Hon’ble Mr. Justice Virinder Aggarwal
Held: Allegations of fraud must be specifically pleaded and proved through cogent evidence; mere assertions are insufficient. A decree based on existing rights does not require registration. A suit challenging such decree after long delay is barred by limitation.
Summary: The plaintiff-Sangh instituted a suit challenging a judgment and decree dated 10.07.1972, claiming it to be illegal, void, and obtained by fraud allegedly committed by its then Secretary in connivance with the defendants. The plaintiff asserted ownership over the suit property based on a settlement deed of 1968 and sought declaration and injunction.
The defendants contested the suit, asserting ownership over the property and contending that the plaintiff was merely a licensee. They relied upon the earlier decree and argued that it was valid, binding, and not obtained by fraud.
The Trial Court partly decreed the suit by granting injunction but declined declaration and possession. The First Appellate Court affirmed these findings. Aggrieved, the plaintiff preferred the present Regular Second Appeal.
Before the High Court, the plaintiff argued that the earlier decree was invalid as the Secretary lacked authority and that it required compulsory registration. It was also contended that the suit was within limitation as knowledge of the decree was acquired much later.
The Court examined the rules and regulations of the Sangh and held that the Secretary was competent to represent the institution in legal proceedings. It further observed that no evidence of fraud, misrepresentation, or collusion had been produced. The Court also noted that no action was taken against the Secretary, and the plaintiff’s own conduct, including admissions in correspondence, weakened its case.
Decision: The High Court held that both the Courts below had correctly appreciated the evidence and recorded concurrent findings that did not warrant interference. The plea of fraud was found to be unsubstantiated, as no cogent evidence was produced to prove collusion or misrepresentation. The Court further held that the Secretary was duly authorized under the rules of the Sangh to represent it, and the decree passed earlier was binding. It was also held that the decree merely affirmed pre-existing rights and did not require compulsory registration. Additionally, the suit was found to be barred by limitation, having been filed nearly two decades after the decree despite the plaintiff being a party to the earlier proceedings. Consequently, the appeal was dismissed as devoid of merit.