011-NLR-NLR-V-30-CATHIRESAN-CHETTY-v.-NATCHIIAPPA-CHETTY-et-al.pdf
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Present: Garvin and Drieberg JJ.
1988.
CATHIRESAN CHETTY v. NATCHIAPPA CHETTY et ai.
402—D. C. Colombo, 18,643.
Decree—Obtained by fraud—Separate action to set aside—Relief.
A separate action to set aside a decree on the -groundfthat itwas obtained by fraud cannot be maintained where relief couldhave been had in the action in which the decree was entered.
^^PPEAL from an order of the District Judge of Colombo.
Hayley, K.C. (with B. V. Perera), for first defendant, appellant.
27. B. Bartholomeusz, for plaintiffs, respondent.
May 11, 1928. Dbiebebg J.—
The appellant sued the second respondent in case No. 17,764of the District Court of Colombo, on mortgage bond No. 229 ofMay 26,1923, for the recovery of a sum of Rs. 13,027. The appel-lant joined the first respondent as a defendant alleging that heheld a secondary mortgage of some of the propedies hypothecatedby the bond sued on: The Court ordered summons for December2, 1925. On October 12 the appellant’s Proctor moved thatnotice of the action be given to the first respondent by sendinghim a copy of the plaint and summons by registered post. Thiswas allowed and the notice was posted oh October 14.
On October 14 the appellant’s Proctor filed a minute of consentto judgment by the Proctor for the second respondent and askedthat judgment be entered against him. He also filed the receiptfor the registered letter of notice sent that day to the first re-spondent. The Court allowed this motion on October 16 andon the same day a decree was entered against the present secondrespondent for the payment of the sum decreed and as againsthim and the first respondent for the sale of the property mortgaged.
On December 2 a Proctor filed proxy for the first respondentand moved that any application by the appellant to execute thedecree be not allowed. The motion stated that there was nomoney due by the Becond respondent to the appellant, that theaction was a collusive one brought to defeat the claims of just
1928.
Dbiebebo J.
OathireganChett.y v.NatehiappaChetty
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creditors, and that a separate action would be filed to set asidethe decree, and that a. certified copy of the plaint in that actionwould be filed in this action before the 7th. There is an entryon this motion paper that it was refused onOctober 4.
On December 9 the appellant’s Proctor applied for executionwhich was allowed. On December 19 the first respondent filedthis action praying that the decree in case No. 17,764 be set aside,that the mortgage bond No. 229 be declared discharged and ofno force or avail, and that execution of the decree in No. 17,754be stayed. On December 21 he made an application in caseNo. 17,754 supported by an affidavit that execution of the decreehe stayed pending the decision of either case No. 17,754 or of thiscase. He also asked that the decree in No. 17,754 be set asideand that he be allowed to appear and defend the action underthe provisions of section 644 of the Civil Procedure Code. By thisdate the property had been advertised for sale. The first re-spondent’s application was finally of. consent postponed sine die,execution being stayed on security given by him.
In this action the first respondent asks that the decree in caseNo. 17,754 be set aside on the ground that it was obtained by fraud.In view of the conclusion we have come to it is not necessaryto deal with the first respondent’s case in detail. It is shortlythis : The second respondent wanted from him a loan of Rs. 25,000on the security of certain properties, two of which were undermortgage to the appellant on the bond No. 229. On June 5 hisProctor, Mr. Watson, inquired from the appellant’s Proctor whatthe amount of the claim on bond No. 229 was, and was told thatthere was due Rs. 2,602- 50 on a promissory note and that the bondwould be discharged on payment of this sum. This note was onefor Rs. 2,500 due on August 23, 1923, and Rs. 102-50 was due forcharges and interest to that day.
He says that Karupiah, the first respondent’s agent, agreed tocancel and discharge bond No. 229 on receipt of the Rs. 2,602*50and not to make any further advances to the second respondenton the bond. On June 7, the second respondent executed a mort-gage bond for Rs. 25,000 in favour of the first respondent andwas paid Rs. 22,000. The mortgage of the two properties I havereferred to was described in the bond as primary. He says thaton the same day he paid Karupiah Rs. 102*50 and on August23 Rs. 2,500, but Karupiah kept putting off cancelling the bondNo. 229 on various pretexts, and finally the appellant filed actionNo. 17,554 on October 2, 1925, for Rs. 13,027, being moneys saidto have been lent on bond No. 229 on July 5, 1923, and thereafter.The learned District Judge found in favour of the first respondentand entered judgment declaring that the properties mortgaged
1988.
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to the first respondent were free from the mortgage on them
created by bond No. 229 in favour of the appellant. The appellant Dbiebkbg J.appeals from this judgment.OtOM^an
It is not necessary to express an opinion on the merits of this Chetty «.action, for it is one that cannot possibly be maintained. A separateaction to set aside a decree on the ground that it was obtainedby fraud cannot be brought where relief could have been had inthe action in which the decree was entered.
The first respondent appeared in Court on December 2, withinthe time allowed by the summons and there was nothing to barhis right to defend the action except the decree which was enteredagainst him by error. The Court did not order, nor did the appel-lant’s Proctor ask for, a decree against him, and the Court hadthe power to amend the decree by striking out so much of it asaffected the first respondent. Further, the decree had been enteredbefore the time allowed for the first respondent to answer.
But even apart from this there are other reasons why this actionmust fail. If the conditions existed which entitled the first re-spondent to relief of this nature it could only be obtained by way ofrestitutio in integrum (Sinnetamby v. Nallatamby1). Further,even if the first respondent’s statement of the circumstances underwhich he took his mortgage be true.it cannot be said that thedecree in 17,754 was obtained by fraud. He had a defence to theclaim of the appellant which the latter gave him an opportunityof asserting by making him a party to the action and giving himdue notice of it-. The mere circumstance that the appellant’sclaim to be entitled to a primary mortgage was unfounded or inbreach of a contract with the first respondent or even if it wassupported by false evidence, does not constitute fraud in theobtaining of a judgment so as to justify an action to set it asideon that ground. (Patch v. Ward,t Flower v, Lloyd,3 Baker v. Wads-worth.«
The appeal is allowed and judgment will be entered, dismissingthe claim with costs. The first respondent will pay the appellantthe costs of the appeal.
Gabvin J.—I agree.
Appeal allowed. i *
i {1903) 7 N. L. R. 139 (Full Bench).
* (1867) 3 Ch. 203.
(1877) 10 C. D. 327.
(1898) 67 L. J., Q. B. D. 301.