SUIT TO CANCEL OR SET ASIDE AN INSTRUMENT OR DECREE OR FOR THE RESCISSION OF A CONTRACT: Where any person who is entitled for the revocation of the contract – A Suit may be filed for the revocation of the contract, within 3 years from the date, when the facts entitling the plaintiffs to have the contract being revoked, first becomes known to the person concerned, under Article 59 of the Indian Limitation Act, 1963.
Where consent to an agreement is obtained by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained; and where both the parties to an agreement are under a mistake of fact essential to the agreement, the agreement is void. In such situation the defrauded party has three remedies are open to him, namely –
He may rescind / cancel the contract absolutely and sue to recover the consideration parted with upon the fraudulent contract; or
He may bring an action to rescind / cancel the contract and in that action have full relief; or
He may retain what he has received and bring an action to recover the damages sustained
1. The legal process in the Court of law is initiated by the presentation / institution of a Case, whether in the form of a Suit, Petition, Application etc, in the competent court of jurisdiction.
2. Every litigation presupposes the accrual of “cause of action”, that is to say, reason for initiating legal action in the Court of law.
3. Accrual of cause of action implies and presupposes infringement of litigant’s some statutory right / fundamental right / equitable right / contractual right / or any other right recognized under the statutes or customs.
4. In order to commence a legal action, the person must have some real grievance against another, which is the foundation of any legal action, that is, a person must have a “cause of action” against the person legal action is sought. For the right to move the court of law, the right sought to be enforced, should have already come into existence, and there should be an infringement of it, or at least a serious and imminent threat exist of its infringement.
5. Law may broadly be divided into civil and criminal law. In some of the cases, like Dishonour of cheques, the same illegal / unlawful act may be a crime as well as a civil wrong. The distinction lies in the nature of legal action adopted, whether by filing a Civil suit or by filing a criminal complaint either by FIR or by filing a private complaint directly before the competent Magistrates Court.
6. The act of causing harm to another may gives rise to two different kinds of liabilities – Civil and Criminal.
7. For enforcing rights in the Civil Court of law, usually the litigation which is adopted is called as Civil Suit. There is inherent right in every person to bring a Suit of a Civil nature unless the Suit is barred by any Statute. A Suit for its maintainability requires no authority of law and it is enough if no law bars the maintainability of such Suit.
8. Every offence may gives rise to a civil liability in the form of damages, but accrual of civil liability may not amount to an offence. Like for example, in a business transaction, in the regular course of business, if one of the party “unable to perform” its part of the promise, the remedy available to the other would be to seek damages or may be to sue for specific performance of the Contract.
9. Also, any legal action, in particularly the Civil action must be commenced within a particular time frame depending on the nature of the dispute.
10. The person who commences legal action by filing Civil Suit against another in the court of law is called a Plaintiff, and the persons against whom legal action is initiated is called a Defendant.
11. The Plaintiffs in Civil Suits, inter alia, sets out the material facts of his case, alongwith supporting documentary evidences wherever applicable, based on which he claims certain reliefs from the Court.
12. The Defendants are obliged by law, to file their reply and in their reply they have to deal with the specific facts and allegations made in the Plaint / Suit, failing which they may said to be admitting the facts / allegations set out in the Plaint / Suit, and the facts admitted, expressly or by necessary implication, will not be required to be proved by the Plaintiffs, and the Court may not even frame issue in respect of a material fact, which is not denied by the defendant in his reply.
13. The “issues” arises only when the material proposition of any fact is disputed by the defendant, in the absence of which the case may be set for argument and judgment forthwith. “Material proposition of a fact”, implies such facts which the Plaintiff must prove in order to claim judgment in his favour from the Court.
14. When the Court frame “Issues”, it puts the burden of proving “issues” on either of party, depending upon the pleadings of both the litigating parties, and depending upon the proposition of law in respect of burden of proof, which is set out in sections 101 to 106 of the Indian Evidence Act, 1872.
15. Both the parties thereafter are obliged to lead evidence, oral and documentary, to prove certain facts, based on the issues framed.
16. After conclusion of the leading of evidences, the parties may offer to give oral submission or written submission of their respective cases.
17. Thereafter the presiding judge, based on each of the issues framed, and in the light of salutary provision of section 3 of the Indian Evidence Act, 1872, would evaluate the worth of the evidences led by each of the party, and the materials of cross examination of each of the parties and their witnesses; and would record its finding on the specific Issues which it had framed, as whether the parties have been able to satisfy the court in respect of the Issue which were framed by the Court. Based on the findings of the Court, the Issues are answered and Judgment follows.
18. In order to ensure speedy disposal of disputes which arises from commercial transactions involving high value, the Parliament of India has come out with a unique legislation namely, THE COMMERCIAL COURTS ACT, 2015; wherein Commercial Courts / Divisions are to be constituted in the existing district Courts and in High Courts; and wherein disputes arising from specified commercial dealings involving claim of Rs.1.00 Crore or above would be adjudicated by these newly constituted commercial Courts / Divisions. This pecuniary limit is now reduced to Rs.3.00 Lakhs.
19. And accordingly, the Code of Civil Procedure, 1908, is substantially amended, wherein new Order XIII-A and XV-A are inserted, apart from new Order XI, Sections 35 for costs, Verification of Pleadings as contained in Order VI Rule 15A, Order VIII which prescribes the time limit within which the Written Statement must be filed, failing which the Defendant loses his right to file his Defense.
20. Among other things, the outstanding feature of adjudication by these newly constituted Commercial Courts / Division is that, the powers of these Courts to adjudicate commercial disputes before them in a Summary fashion, without formal leading of evidences, and also provides for the time bound disposal of these cases.
21. The other outstanding feature of this new law is, the manner in which the pleadings are to be filed by both the litigating parties; and thereby Order VI Rule 15A of CPC, 1908, inter alia, provides the strict manner in which the Verification of pleading is to be done by both the litigating parties. The profound object of Verification of Pleading is to prevent or cease frivolous claims and meritless defenses, and thus this newly inserted Order VI Rule 15A makes a solid ground to discourage frivolous claims and meritless defenses.
22. The broad framework of this newly constituted jurisdiction may thus be summarized to say that, certain disputes of commercial nature, involving claim of Rs.3.00 Lakhs or above, would be adjudicated under this jurisdiction. The commercial disputes with the State Govts / Central Govts / any other instrumentality of the State are also included in this regime.
23. Further, a commercial dispute (a) involving the recovery of immovable property; or (b) involving the realization of Monies out of immovable property which were given as security; or (c) involving any other relief pertaining to immovable property, may still be considered as a “commercial dispute”, and may be adjudicated under this special jurisdiction.
24. Further, these newly constituted Commercial Courts / Division would also have the jurisdiction to adjudicate upon Arbitration Applications which arises in the backdrop of Arbitration proceedings, but of course the Arbitration proceedings must be relating to commercial dispute and involves a claim of Rs.3.00 Lakhs or above.
25. Coming to deliverance and dispensation of justice, the Courts / Tribunals, in the exercise of adjudicating and declaring rights and obligation of respective parties which are before it, formulate its decision by employing laws of the land, the principle of equity, and customs & usages.
26. The principles of natural justice forms the corner stone of every judicial procedure and decision; and it postulate that both the litigating parties must have equal and sufficient opportunity to deal with the allegations made against them.
27. A Judicial decision must be a self contained document from which it should appear as to what the facts of the case were and what was the controversy, which was tried to be settled by the Court / Tribunal.
28. The process of reasoning by which Court came to a particular conclusion and decreed or dismissed the case, should clearly be reflected in the decision. 29. The decision should be on the basis of evidence on record and in accordance with law.
30. The fate of Justice is tied to the thread of reason: Reasoned decisions are inescapable in the entire scheme of administration of Justice, as explained decision breathes life into court order. Reasons disclose how the mind was applied to the subject matter and reveals a rational nexus between the facts considered and conclusions reached.
Recording of reasons is also an assurance that the judicial authority has applied its mind to the facts on record. The reasons employed not only be logical / conceivable but which will also deal with the substantial points which have been raised.
An unreasoned Order presupposes the non consideration of evidences and submissions on record made by the Party therein and the opportunity of affording due hearing would be rendered meaningless and empty formality and thus in essence occasion the frustration of principles of natural justice for the prejudiced party.
The giving of satisfactory reasons is required by the ordinary man’s sense of justice. Reasoned decisions are vital for the purpose of showing that one is receiving justice.
31. Having said all this, and to say that reasons must be given for decisions, what we really expect from the judicial authority.
Reasons are appreciation of such facts and evidences which are on record, and from which the judicial authorities are entitled to draw inferences and results.
Then comes the question, what is appreciation of facts and evidences.
Appreciation of facts and evidences is, drawing natural and logical inferences, drawing natural and logical results, which necessarily flow from those facts and evidences [the facts would mean those facts which are self evident or are admitted, or facts which are reasonably proved, disproved or not proved].
Appreciation of facts and evidence is an exercise wherein the proved existence of certain facts, provokes or persuades the decision maker to reach a certain conclusion.
And to put it further straight, Reasons are those statements, whereby the decision maker will tell you, WHY your submissions to claim certain reliefs, or WHY your submissions to deny reliefs claimed, are meritorious or if are meritless; or to say, the decision maker will tell you, WHY you are entitled to the reliefs or WHY you are not entitled to the reliefs, claimed or prayed for.
32. I am hasten to add here the notable observations of the Apex court in the case of State Of Uttaranchal Versus Sunil Kumar Vaish .
Para 18: Judicial determination has to be seen as an outcome of a reasoned process of adjudication initiated and documented by a party based, on mainly events which happened in the past. Courts' clear reasoning and analysis are basic requirements in a judicial determination when parties demand it so that they can administer justice justly and correctly, in relation to the findings on law and facts. Judicial decision must be perceived by the parties and by the society at large, as being the result of a correct and proper application of legal rules, proper evaluation of the evidence adduced and application of legal procedure. The parties should be convinced that their case has been properly considered and decided.
Para 19: Judicial decisions must in principle be reasoned and the quality of a judicial decision depends principally on the quality of its reasoning. Proper reasoning is an imperative necessity which should not be sacrificed for expediency. The statement of reasons not only makes the decision easier for the parties to understand and many a times such decisions would be accepted with respect. The requirement of providing reasons obliges the judge to respond to the parties’ submissions and to specify the points that justify the decision and make it lawful and it enables the society to understand the functioning of the judicial system and it also enhances the faith and confidence of the people in the judicial system.
No adverse Order if No adverse findings
1. It is typical for Courts and Judges, whilst passing Orders and decisions, (to commit basic and elementary mistakes, and most of the times consciously) outright overlooking some of the very material facts and evidences / submissions / Judgments cited, by the losing Party; and drive themselves to irrelevant consideration of facts.
2. Before discussing the aforesaid expression “No adverse Order if No adverse findings”, let us first broadly look at the decision making process.
3. Broadly, the decision making is a process wherein, having regard to the Reliefs claimed, the presiding Judge – (a) examine the (legality) of facts alleged, (b) examine the (legality) of stand of the adversary, (c) examine the materials and the evidences which are placed before him in support of the facts alleged by both the sides; (d) would record his reasoned finding (prima facie or conclusive) as to the existence or the non existence of the facts alleged.
4. The process of recording finding of facts is, having regard to the applicable laws and precedents, testing of facts and evidences, and drawing natural, logical and legal inferences and outcomes, which necessarily flows from those facts and evidences [the facts would mean those facts which are self evident or are admitted, or facts which are reasonably proved, disproved or not proved]. Appreciation of facts and evidence is also an exercise wherein the existence of certain facts and evidence, provokes or persuades the decision maker to reach a certain conclusion.
5. Once findings as to facts are arrived at, the decision follows, either granting the reliefs claimed for, or the denial of.
6. However, what is witnessed in many Orders of the Courts is – either (a) In the process of finding of facts, findings on significant material fact are not recorded at all, by overlooking all the materials and evidences and submissions of the losing party, which are placed on record; the evidences and submissions, which had a direct bearing on the decision of the Court; or (b) whilst recording finding as to material fact, some of the material facts agitated / evidences / submissions / Judgments cited are not dealt with. The situation (a) mainly occurs in discretionary jurisdiction Orders/ Interim /Ad-Interim Orders / and Orders passed at Appellate stage; and situation (b) occurs in Orders passed in original proceedings. [Material facts would mean such facts which naturally arises in the nature of legal proceeding and nature of reliefs claimed]
7. In wealth of judgments, the Apex Court and High Courts have insisted upon recording of reasons whilst arriving at findings of facts and law. In a case (AIR 2011 SCW 5486) before it, the Apex Court have observed to say that Judicial decisions must in principle be reasoned and the quality of a judicial decision depends principally on the quality of its reasoning, on law and facts.
8. Therefore, IF it is contempt of the Court, if reasoned findings are not recorded, then it is regressive and aggravated contempt, to not to record findings at all.
9. Can we really compel the Courts to record finding of fact in their decisions? At least the Apex Court in a case before it [(2006) 9 SCC 222], have said Yes. The Apex Court have held that before subjecting a party to the adverse decision, adverse findings must be recorded against it.
The Apex Court in the aforesaid case, have set aside the Order of the High Court on the grounds that, the High Court, before directing the Defendants to “clear the encroachment”, should have recorded the findings that “Defendants had entered upon the suit land and put up construction subsequent to the undertaking given to the trial court”.
It was a case where the Defendant in a Suit gave undertaking to the trial Court that Defendants will not interfere with the possession of the Plaintiff’s land. The Suit was disposed of on the basis of above undertaking. Thereafter, the Plaintiff moved Execution Application under O.21 R.32 before the trial Court alleging that Defendants have constructed some structure on the Suit land. The trial Court dismissed said Execution Application. The Plaintiff challenged trial Court’s Order before High Court. The High Court directed the Defendants to clear the encroachment effected by them on the suit land. In this backdrop, the Apex Court set aside the Order of the High Court on the grounds that, the High Court, before directing the Defendants to “clear the encroachment”, should have recorded the findings that “Defendants had entered upon the suit land and put up construction subsequent to the undertaking given to the trial court”.
10. The Illustration: To illustrate the proposition of “Findings”, agitated hereinabove, therefore, in a Writ Petition, the High Court, before refusing to exercise its writ jurisdiction on the grounds of availability of alternate remedy, and depending upon the nature of facts alleged, must record a prima facie finding that, having regard to the facts on record, (a) fundamental rights of the Petitioners are not infringed; and / or (b) principles of natural justice have not been infringed; or (c) the Authority / Subordinate court / Tribunals have acted within their respective jurisdiction. This is because, there are ample judgments of Apex Court, wherein it is held that, on the existence of any of the aforesaid grounds in the case, notwithstanding availability of alternative remedy, the High Courts must exercise their Writ Jurisdiction under Article 226 of the Constitution of India. [AIR 1970 SC 645; AIR 2010 SCW 7184; AIR 1999 SC 22; AIR 2012 SCW 616; AIR 2003 SC 2120; AIR 2005 SC 3936; AIR 1958 SC 86 (Constitution Bench Judg); (2011) 5 SCC 697; AIR 1969 SC 556; (2015) 6 All MR 35 (BHC)]
Similarly, in an Application for Anticipatory Bail, the Session Judge / High Court, before rejecting Anticipatory Bail must record a prima facie finding that, having regard to the facts on record, (a) the Applicant is not cooperating in the investigation; (b) custodial interrogation of the Accused is essential; or (c) There is a apprehension of tampering of the witness by the Applicant; or (d) There is a possibility of the Applicant to flee from justice; or that there is a possibility of the Accused's likelihood to repeat similar or the other offences.
11. The necessity of recording of finding on material facts, would take away the arbitrary and whimsical discretion of the Courts, for, they have to record findings, based on facts and evidences which are explicitly placed on record. And when the facts / evidence are seen large, the Courts may abstain from recording illogical findings, which are contrary to facts / evidence placed on record, and seen large.
This is how the captioned proposition should come into play, that is, “No adverse Order if No adverse findings”.
The concentrated view which emerges runs to the effect that every decision / Order of the court, be interim or final, must be based on findings of facts recorded by it, whether prima facie or conclusive, on such facts which naturally arises in the nature of legal proceeding and nature of reliefs claimed.
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