There is a fundamental distinction between a proceeding which is collusive and one which is fraudulent.”Collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of a judicial tribunal for some sinister purpose”. (Wharton’s Law Lexicon, 14th Edition, page 212). In such a proceeding, the claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a mere mask having the similitude of a judicial determination and worn by the parties with the object of confounding third parties. But when a proceeding is alleged to be fraudulent, what is meant is that the claim made therein is untrue, but that the claimant has managed to obtain the verdict of the court in his favour and against his opponent by practising fraud on the court. Such a proceeding is started with a view to injure the opponent, and there can be no question of its having been initiated as the result of an understanding between the parties. While in collusive proceedings the combat is a mere sham, in a fraudulent suit it is real and earnest. The allegations in the petition of Abdul Huq set out above show that the suit itself was not attacked as collusive, but that the execution proceedings were impeached as fraudulent. It should be mentioned that on this petition the District Judge passed an order on 30-6-1932 directing the Official Receiver to take the necessary steps and report. But nothing came out of this.
Nagubai Ammal and Others Vs. B. Shama Rao and Others, AIR 1956 SC 593 : (1956) 1 SCR 451