2003 (10) TMI 610 - SUPREME COURT

Whether the right of the auction purchaser could have been set at naught by reason of a consent order passed in his absence?

Held that:- The consent order, as is well-known, is an agreement between the parties with the seal of the Court superadded to it. The appellant herein in the Review Application categorically stated that the parties to the appeal had suppressed the auction sale as also the confirmation thereof. The effect of the events appearing subsequent to the filing of First Appeal resulting in creation of a third party right was bound to be taken into consideration by the High Court. A third party right cannot be set at naught by consent. The High Court, therefore, was required to consider the contention of the appellant in their proper perspective. The High Court, in our opinion, was obligated to address itself on these questions for the purpose of reviewing its order.

It is true that pursuant to or in furtherance of the consent order, the respondents had deposited the amount and the State Government has appropriated the same. The legal, issues as regard the effect of commission of fraud on court vis-a-vis the conduct of the parties are still at large. The High Court was therefore, required to adjust the equities between ,the parties. The Bank cannot also unjustly enrich itself insofar as; while enforcing a preliminary decree of mortgage, it cannot take also recourse to recover the decretal amount from the judgment-debtors at the expense of the auction purchaser.

Appeal allowed. The matters may now be considered afresh by the High Court in the light of the observations made hereinbefore.