Introduction:

In a landmark judgment delivered on July 23, 2025, the Supreme Court of India, comprising Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan, reaffirmed the fundamental legal principle that fraud vitiates every judicial act, even at the highest level of the judiciary. The Court held that any judgment or order obtained through fraudulent means is a nullity and can be challenged in collateral proceedings, without the necessity of being directly assailed in an appeal, revision, or writ petition. This ruling emerged in the context of a complex land dispute involving Vishnu Vardhan @ Vishnu Pradhan (appellant), Reddy Veerana (respondent), and T. Sudhakar (co-owner). The dispute traced its roots to a joint land purchase in 1997 by the three individuals, which subsequently became subject to acquisition by the New Okhla Industrial Development Authority (NOIDA) in 2005. Vishnu alleged that Reddy, through deliberate misrepresentation and suppression of material facts, manipulated judicial processes to have himself declared as the sole owner of the property, thereby wrongfully excluding Vishnu and Sudhakar from compensation due to them. This fraudulent manoeuvre resulted in a favourable order for Reddy from the High Court in 2021, which was later upheld by the Supreme Court in 2022 in Reddy Veerana v. State of U.P. The appellant, Vishnu, who was not arrayed as a party in the prior proceedings, approached the Supreme Court contending that the earlier rulings were procured by fraud and hence void ab initio. The Supreme Court, while overruling its 2022 decision, restored the matter for fresh adjudication by the High Court with all affected parties being impleaded. This judgment underscores the doctrine that “fraud unravels everything,” even judgments of the Supreme Court itself.

Arguments of Both Sides:

The dispute arose after the acquisition of jointly purchased land by NOIDA in 2005, which triggered compensation proceedings. Vishnu and Sudhakar, as co-owners, claimed their rightful share of the compensation. However, Reddy unilaterally pursued legal proceedings asserting himself as the sole owner of the property. The crux of the appellant’s argument was that Reddy intentionally suppressed the existence of the other co-owners from both the High Court and Supreme Court to fraudulently obtain favourable judicial orders. Vishnu contended that the High Court’s order in 2021 and the Supreme Court’s 2022 judgment in Reddy’s favour were not adjudicated on merits since they were based on incomplete and misleading facts. He emphasized that since fraud vitiates all judicial proceedings, such judgments could be declared nullity irrespective of their finality. Furthermore, Vishnu argued that as a non-party deliberately excluded from the earlier proceedings, he was entitled to challenge the orders even in collateral proceedings, without being constrained by procedural doctrines such as merger or the finality of Supreme Court judgments. He relied on the authoritative precedent of A.V. Papayya Sastry v. Government of A.P. (2007), where the apex court had held that a judgment or order obtained by fraud on the court is a nullity and can be challenged at any stage, even in collateral proceedings. According to Vishnu, the doctrine of merger, which ordinarily dictates that a High Court’s order merges into the Supreme Court’s judgment upon appeal, should not be applicable in cases where fraud is proven, as it would otherwise perpetuate injustice and shield fraudulent actions.

On the other hand, Reddy vehemently opposed Vishnu’s claims, maintaining that the doctrine of merger barred any challenge to the Supreme Court’s final judgment of 2022. He asserted that once the apex court had affirmed the High Court’s order, the latter ceased to exist independently, and no appeal could lie against it. Reddy argued that the Supreme Court, being the final court of the land, did not have powers akin to Letters Patent Appeals (LPA) to review or entertain a fresh challenge to its own judgment in such a manner. He insisted that the only remedy available to a dissatisfied party against a final judgment of the Supreme Court was to seek a review or curative petition, both of which have limited scope and must be pursued within specific procedural confines. Reddy further contended that Vishnu, having remained a stranger to the earlier proceedings, could not now raise grievances against orders that had attained finality, especially since he had not been proactive in asserting his rights during the initial litigation. Reddy claimed that allowing such challenges would open the floodgates for endless litigation, undermining the finality and stability of judicial orders.

Court’s Judgment:

The Supreme Court, after hearing both sides, delivered a detailed judgment authored by Justice Dipankar Datta, with Justices Surya Kant and Ujjal Bhuyan concurring. The Court categorically held that fraud is an exception to all doctrines, including the doctrine of merger, and that judgments obtained by fraud are nullities in the eyes of law. The bench reiterated the principle laid down in A.V. Papayya Sastry (2007), emphasizing that fraud vitiates even the most solemn proceedings and that courts have an inherent duty to set aside such tainted orders to preserve the integrity of the judicial system. The bench observed, “Fraud unravels everything. This principle is not confined to judgments of lower courts but extends even to the judgments of this Court if the justice of the case so demands. In the instant matter, it is evident that Reddy has indulged in fraudulent conduct by suppressing material facts and excluding necessary parties to the proceedings, thereby securing favourable orders to which he was not entitled.”

The Court dismissed Reddy’s contention that no challenge could lie against a final judgment of the Supreme Court. It clarified that while the doctrine of merger ordinarily bars a separate appeal against a High Court’s order once affirmed by the Supreme Court, this doctrine cannot operate to protect judgments obtained through fraud, particularly when an affected party was deliberately left out of the earlier proceedings. The bench elaborated on the limitations imposed on third parties like Vishnu, who were neither heard nor represented in the original litigation. Accepting Reddy’s rigid application of the doctrine of merger would effectively deprive such parties of any meaningful legal remedy, leaving them only with the option of filing a curative petition before the Supreme Court—a remedy that is narrow, exceptional, and often insufficient for cases involving fraud. The Court observed: “If the order of the High Court prejudicially affects a third party who was deliberately not impleaded and who was unaware of the proceedings, the remedy of filing an appeal against the High Court’s order with this Court’s permission should remain open. To hold otherwise would unjustly deprive such parties of the right to seek a fair adjudication of their claims.”

The Court underscored that the doctrine of merger is fundamentally a procedural principle aimed at ensuring hierarchical finality of decisions, but it cannot be elevated to a position where it validates fraudulent acts. It further referred to earlier decisions such as Jatan Kumar Golcha v. Golcha Properties (P) Ltd. and State of Punjab v. Amar Singh, which recognized the rights of third parties to challenge orders that adversely affect them, even if they were not originally part of the litigation. The bench emphasized that fraud vitiates all legal proceedings and that “no court, whether superior or inferior, can afford to become a silent spectator when its processes are abused by unscrupulous litigants.”

Applying these principles, the Court concluded that its 2022 judgment in Reddy Veerana v. State of U.P. was a nullity, having been procured through fraudulent misrepresentation and suppression of facts. Consequently, the Court set aside both the High Court’s 2021 order and its own 2022 judgment, restoring the case for fresh adjudication before the High Court. Importantly, it directed that all affected parties, including Vishnu and Sudhakar, be impleaded in the proceedings to ensure a fair and complete resolution of the dispute. The Court’s ruling not only provided relief to Vishnu but also served as a stern warning against the misuse of judicial processes.

The bench also highlighted that this case illustrates the need for courts to exercise vigilance and adopt a proactive approach in detecting and addressing fraudulent conduct. The integrity of the judicial process, it said, depends on ensuring that no litigant is allowed to gain advantage by deceit. The Court observed that while finality of judgments is a vital aspect of the legal system, it cannot take precedence over justice and fairness, especially when the foundation of a judgment is tainted by fraud.

The ruling is also significant for its broader jurisprudential implications. It reaffirms the principle that courts retain inherent powers to recall or nullify their own orders if obtained by fraud, irrespective of the stage or the forum. The Court clarified that this does not amount to an appellate review of its own decisions but is rather an exercise of its inherent authority to prevent abuse of process and uphold the sanctity of justice. The judgment has thus drawn a clear distinction between ordinary errors of law, which must be corrected through established appellate mechanisms, and fraud, which strikes at the very root of judicial authority and warrants immediate remedial action.