Doctrine Of Merger Inapplicable To Orders Obtained By Fraud : Supreme Court Outlines Exceptions To Merger Rule

The Supreme Court (July 23) held that if a High Court's decision, later upheld by the Supreme Court, was obtained by fraud, the aggrieved party may challenge it by filing an appeal against the High Court's order before the Supreme Court, rather than seeking a review of the Supreme Court's judgment.

The Court held that the doctrine of merger (where the lower court's decision merges with the Superior court's order) would not apply to the situation where the impugned judgment/order was obtained by fraud.

The bench comprising Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan heard the case where one of the party (Reddy) obtained the High Court's order (2021) in his favour by suppressing material facts which directly bear upon the merits of the case. Later on, the High Court's decision was approved by the Supreme Court in 2022.

The Appellant-Vishnu, who was not arrayed as a party before the proceeding, sought to assail the Supreme Court's 2022 order, arguing that the order passed by the court to be vitiated by fraud.

Now, the question arose whether the Appellant can file a regular appeal before the Supreme Court against the High Court's order, or a review petition seeking review of the Supreme Court's order.

Before the Supreme Court, it was argued on behalf of Reddy that the civil appeal filed by the Appellant would not be maintainable as, upon application of the doctrine of merger, the High Court order merges with the Supreme Court's order, thereby the Supreme Court's order becomes an enforceable order against which no appeal would lie.

Rejecting such an argument, the judgment authored by Justice Datta observed that since the High Court's decision was tainted by fraud and not rendered on merits, its subsequent affirmation by the Supreme Court in 2022 did not result in a true merger. As a result, the High Court's order remained open to challenge through a regular civil appeal.

Moreover, the court laid down following five scenarios where the doctrine of merger would not be applicable:

(i) his right of appeal should not be foreclosed because of the very rare or special circumstance(s) that is/are projected before the court; or

(ii) his appeal raises an issue of seminal public importance, which was not available to be raised by the appellant who approached this Court in its appellate jurisdiction in the earlier round of litigation, and also that such issue in the greater public interest requires a resolution by this Court; or

(iii) since an act of court ought to prejudice none, refusal to interfere by this Court would invariably result in offending the principle of actus curiae neminem gravabit (No party should suffer due to the court's mistake or fraud by another litigant); or

(iv) the earlier appellate decision is vitiated because of fraud having been practiced on this Court by a party in whose favour the ruling had been made, as in this case; or

(v) that public interest would be put to extreme jeopardy by reason of irretrievable consequences ensuing, if interference which is otherwise found to be warranted in law were declined solely based on the doctrine of merger.

Thus, the Court set aside the High Court's order and its earlier decision in Reddy Veerana (2022), restoring the case for fresh adjudication before the High Court with all affected parties (Vishnu & Sudhakar) impleaded.

Cause Title: VISHNU VARDHAN @ VISHNU PRADHAN VS. THE STATE OF UTTAR PRADESH & ORS. (& Connected Cases)

Citation : 2025 LiveLaw (SC) 736

Click here to read/download the judgment

Also From Judgment: 'Fraud Unravels Everything': Supreme Court Recalls Its Own Order Obtained By Fraud Back In 2022