Collusion

What is Collusion?

**Collusion** is a secret or fraudulent agreement between two or more parties to act together for a dishonest or unlawful purpose, particularly to deceive a court, defraud a third party, or circumvent the law. In legal proceedings, collusion occurs when parties who appear to be adversaries are actually cooperating behind the scenes to obtain a particular outcome — such as a decree, judgment, or order — that neither would be entitled to in a genuinely contested proceeding.

In simple terms, collusion means two parties secretly working together to trick the court or cheat someone else.

Legal Context in Indian Law

Collusion in Divorce Proceedings — Section 23 HMA

The most prominent statutory reference to collusion in Indian law is found in **Section 23 of the Hindu Marriage Act, 1955 (HMA)**. This section imposes a duty on the court to satisfy itself, before granting relief in any matrimonial proceeding, that:

- **(a)** Any ground for granting relief exists and the petitioner is **not in any way taking advantage of their own wrong or disability**.

- **(b)** There has been **no unnecessary or improper delay** in filing the petition.

- **(c)** There is **no collusion** between the petitioner and the respondent.

- **(d)** There has been **no condonation** of the alleged offence (where condonation is a bar).

Under **Section 23(1)(c)**, if the court finds that the divorce petition has been presented by collusion between the husband and wife — meaning both parties have secretly agreed to fabricate grounds for divorce and present a false case before the court — the court **must refuse** to grant the decree.

This provision exists because Indian matrimonial law traditionally does not allow divorce merely by mutual wish (except under Section 13B for mutual consent divorce with specified conditions). If spouses could collude to fabricate grounds like cruelty or desertion, it would undermine the safeguards built into the law.

Collusion in Civil Proceedings

**Order XXIII Rule 3A of the Code of Civil Procedure, 1908** provides that no suit shall be dismissed as against a defendant on the basis of a compromise or agreement unless the court is satisfied that the compromise is **lawful and not collusive**. This protects third-party rights and prevents sham settlements.

A **collusive decree** — one obtained by fraud and collusion between the parties — is voidable and can be set aside. Under **Section 44 of the Indian Evidence Act, 1872** (now **Section 42 of the Bharatiya Sakshya Adhiniyam, 2023**), any party or their representative in interest can show that a judgment is not conclusive proof if it was obtained by **fraud or collusion**.

Collusion in Contract Law

Under the **Indian Contract Act, 1872**, agreements that are the result of collusion may be vitiated by **fraud (Section 17)** or may be void as being opposed to **public policy (Section 23)**. Where two parties collude to defraud a third party — for example, a buyer and seller conspiring to undervalue property to evade stamp duty — the resulting agreement may be declared void or voidable.

Collusion in Company Law

Under the **Companies Act, 2013**, collusion between directors, auditors, or other officers to misrepresent financial statements or defraud shareholders can lead to criminal prosecution under **Sections 447 and 448** (fraud and false statements). The **Serious Fraud Investigation Office (SFIO)** investigates cases involving collusion in corporate affairs.

Practical Examples

Fabricated Divorce Ground

A husband and wife want a divorce but do not wish to wait for the cooling-off period required under Section 13B HMA for mutual consent divorce. They agree that the wife will file a petition alleging cruelty by the husband, and the husband will not contest it. The court, if it discovers this arrangement, must reject the petition under Section 23(1)(c) as it is based on collusion.

Collusive Auction

In execution proceedings, the judgment debtor and a third party collude to ensure that the property is sold at an auction at a significantly lower price than its market value. The decree holder can challenge the sale as collusive and seek its setting aside under **Order XXI Rule 90 CPC**.

Tax Evasion Through Collusion

A property buyer and seller agree to register a sale deed at a value far below the actual transaction price to reduce stamp duty and registration charges. Revenue authorities can invoke **Section 47A of the Indian Stamp Act** to impound the document and demand the actual duty, and both parties may face penalties.

When Does This Term Matter?

In Matrimonial Proceedings

Courts are particularly vigilant about collusion in divorce cases. Even in uncontested divorce petitions, Magistrates and Family Court judges are required to independently satisfy themselves that the grounds alleged are genuine and not manufactured by agreement between the spouses. If during the hearing, the court suspects collusion — for instance, if the respondent does not contest obvious weaknesses in the petitioner's case — the court may conduct independent inquiry or dismiss the petition.

In Property Disputes

Collusive transactions involving property — such as backdated sale deeds, benami transactions, or sham transfers to defeat creditors — are frequently challenged in Indian courts. The **Benami Transactions (Prohibition) Act, 1988** (as amended in 2016) specifically targets transactions where the real owner is concealed through collusion.

In Insurance Claims

Insurance companies frequently investigate collusion between policyholders and third parties to fabricate claims — such as staged accidents or inflated damage claims. A policy obtained or a claim made through collusion may be voided under the **Insurance Act, 1938** and the terms of the policy.

In Judicial Proceedings Generally

Any decree or order obtained by collusion between parties can be challenged in subsequent proceedings. Section 44 of the Evidence Act ensures that a collusive judgment does not bind third parties who were not part of the collusion.

Detecting Collusion

Courts look for several indicators when suspecting collusion:

- **Unusual cooperation** between parties who are expected to be adversarial.

- **Lack of cross-examination** or perfunctory cross-examination by the opposing side.

- **Identical or suspiciously consistent narratives** from both parties.

- **Rapid settlement** or uncontested proceedings in cases involving serious allegations.

- **Absence of genuine dispute** despite the filing of a case.

- **Financial arrangements** between parties that suggest a pre-existing agreement.

Frequently Asked Questions

What is the difference between collusion and mutual consent in divorce?

**Mutual consent divorce** under Section 13B HMA is a lawful mechanism where both parties openly agree to dissolve the marriage, file a joint petition, and satisfy the court that they have been living separately for at least one year. **Collusion** in divorce refers to a secret agreement to fabricate a false ground (like cruelty or desertion) to obtain a contested divorce decree. The key difference is transparency — mutual consent is open and lawful, while collusion is deceptive and illegal.

Can a decree obtained by collusion be set aside?

Yes. A decree obtained by collusion and fraud can be challenged and set aside. The aggrieved party can file a suit for declaration that the decree is null and void, or challenge it under **Section 44 of the Indian Evidence Act**. In some cases, a review petition or appeal may also be appropriate. The limitation period for challenging a fraudulent decree is typically **three years** from the date of discovery of the fraud under **Article 59 of the Limitation Act, 1963**.

Is collusion a criminal offence in India?

Collusion itself is not a separately defined criminal offence. However, depending on the circumstances, it may amount to **criminal conspiracy (Section 120A-120B IPC / Section 61 BNS)**, **fraud (Section 420 IPC / Section 318 BNS)**, **forgery (Section 463 IPC / Section 336 BNS)**, or **abetment** of any of these offences. In corporate contexts, collusion leading to fraud is punishable under Section 447 of the Companies Act, 2013.

How does the court ensure there is no collusion in a divorce case?

The court examines the evidence independently, questions both parties, scrutinises the consistency and credibility of allegations, checks whether the respondent has been properly served, and may appoint an amicus curiae or conduct an independent inquiry if collusion is suspected. Under Section 23 HMA, the court has a positive duty to satisfy itself about the absence of collusion before granting any matrimonial relief.