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CASE NO.:

Special Leave Petition (civil) 21000 of 1993

PETITIONER:

Delhi Development Authority

RESPONDENT:

Skipper Construction and Anr.

DATE OF JUDGMENT: 07/04/2005

BENCH:

RUMA PAL,ARIJIT PASAYAT & C.K. THAKKER

JUDGMENT:

J U D G M E N T

[With IA Nos. 67, 95, 98, 99, 100, 104, 106, 107, 108, 110 and 111 in

SLP (C) No. 21000/1993

With SLP (C) ..CC Nos. 10419-10420/2003

With SLP (C) ..CC Nos. 203-204/2004

ARIJIT PASAYAT, J.

There are some cases which at times strengthen the idea that

existing laws may be inadequate to grant relief to persons whom, the

court feels genuinely to be entitled to relief. Courts, more

particularly, this Court will not abjure its duty to prevent violent

miscarriage of justice by passing such orders as are necessary to

uphold the rule of law and lift the veil of purported legality over

such perfidious acts. In such cases the Court should not allow itself

to be deflected by red herrings drawn across the track. It has to pass

such orders as the circumstances warrant, of course within the four

corners of law to secure the interest of justice and to appease its

judicial conscience. The facts of the present case have some such

unique features. In Miller v. Minister of Pensions (1947 (2) All E.R.

373), it was observed that the law would fail to protect community if

it admitted fanciful possibilities to deflect the course of justice.

Technicalities should not stand in the way of Courts doing substantive

justice. Ultimately, it has to be remembered that justice has no

favourite other than truth. Fraud vitiates all transactions known to

the law, however, high degree of solemnity may be attached to the

transactions. In the present case, this Court took note of the massive

fraud perpetuated by several persons including corporate bodies. The

kingpin in the whole episode is Tejwant Singh purportedly with the aid

and assistance of his wife Surinder Kaur and sons Prabhjot Singh

Sabharwal and Prabhjit Singh. This Court by exercise of the

jurisdiction available under Articles 129, 136 and 142 of the

Constitution of India, 1950 (in short the 'Constitution') passed

various orders relating to the properties acquired by Tejwant Singh and

his family members and with regard to Skipper Construction Pvt. Ltd.

(in short 'Skipper Construction').

By order dated 22.11.2004 following issues were demarcated for

consideration:

1. Property situated at 22, Barakhamba Road and the Report

of the Justice Bahari Committee on diversion of funds.

2. Property relating to Techonology Parks Limited at

Vaishali, Ghaziabad.

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3. Property relating to Technology Parks Limited at

Greater Noida.

4. Report of the Central Vigilance Committee pursuant to

the order passed by this Hon'ble Court dated

13.11.2002.

We are presently concerned with the report of Justice Bahri

Committee. The first one is relating to property situated at 22,

Barakhamba Road and the alleged diversion of funds, and the other

relating to the report relating to Technology Parks Limited. (in short

'TPL') at Vaishali, Ghaziabad and Greater Noida. Justice Bahri

Commission was appointed pursuant to the order passed by this Court on

4th May, 2000. The Commission was directed to look into diversion of

funds of Skipper Tower (Pvt.) Limited (in short the 'Skipper Tower').

The project known as 22, Barakhamba Road was initially launched by

Skipper Sales Pvt. Ltd. (in short 'Skipper Sale') under collaboration

agreement with the owners of the property. The Commission has come to

hold that foundation of the project was laid some times in 1983 and the

super structure for three basements and the ground floor upto 10th floor

were almost completed by 1987 and the 11th and 12th floors have been

constructed during the year 1990-1991. Objection to the report dated

29.10.2001 of Justice Bahri has been filed by Tejwant Singh.

We shall deal in detail with the findings of the Commission and

the objections filed. Pursuant to the directions given by the

Commission, informations were submitted by Tejwant Singh and others

which the Commission felt to be distorted. They were in the shape of

copies of the ledgers and a report of the Chartered Accountant.

Commission, however, obtained copies of the Balance Sheets and

Director's reports of various companies of the Skipper Group from the

Registrar of Companies. During hearing, Tejwant Singh, Prabhjeet Singh

and their employees were heard by the Commission. Representative of

the Flat Owners' Association (in short the 'Association') was also

heard. The Commission noted that Skipper Sales Pvt. Ltd. and Skipper

Tower Pvt. Ltd. were two companies which dealt with the building

projects. The former was incorporated on 23.6.1997 and the equity

share holding was owned by Tejwant Singh and his wife on one side and

Sh. Harpreet Singh and Harveer Singh-both sons of Inderjeet Singh, on

the other. With reference to the Director's report for the period from

23rd June, 1977 to 30th July, 1978, the Commission found that

Rs.27,57,000/- were paid to the real owners of 22, Barakhamba Road

property while entering into collaboration agreements with them and the

project was launched thereafter. Soon after the agreement

Rs.86,74,455/- were collected from the prospective buyers for the

commercial space. The Commission noted from the subsequent Balance

Sheets and other financial statements and Director's Reports that

another project at 5, Bhagwan Dass Road was taken up. There was also

another project i.e. at 89, Nehru Place. With reference to the Balance

Sheets and the financial statements of Skipper Sales, it was noted that

the said company was giving loans to its sister concerns and companies

and as per the Balance Sheet relatable to the financial year 1985-86,

Rs.17,04,08,637/- had been collected as booking amounts, and the amount

pertains to both 22, Barakhamba Road and 89, Nehru Place Project. The

Balance Sheet referred to above, indicated that Rs.16,00,00,334/- had

been given to sister companies and the cost of construction in respect

of both the projects was Rs.6,32,18,900/-. The two groups wanted to

separate and an agreement was entered into on 3rd November, 1986 by

which Tejwant Singh Group transferred shares in Skipper Sales to the

other group and on the basis of said agreement the project at 22,

Barakhamba Road was transferred to Skipper Tower. After this transfer

had been effected, the Balance Sheet of Skipper Sales relatable to

financial year 1986-87 showed that the booking amount relating to 89,

Nehru Place was Rs.11,83,19,511/-. Skipper Towers was incorporated on

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18th November, 1976. Two sons of Tejwant singh i.e. Prabhjot Singh and

Prabhjeet Singh were Directors of this Company for some period and

Tejwant Singh was its Managing Director. According to the records of

Registrar of Companies, Balance Sheet and other financial statements

till 30th July, 1987 were available but no other statement as required

under the Companies Act, 1956 (in short the 'Company Act') has been

filed thereafter. After looking into the documents made available and

the informations collected by it, the Commission was of the view that

Rs.12,85,06,335/- had been collected from various persons for booking

space.

So far as the total expenditure incurred is concerned, the

Commission took note of the report given by Tilak Raj Talukia,

Architect who was engaged by the Flat Owners' Association. Skipper

Sales by its communication dated 23rd July, 2001 admitted that the

excavation work in the foundation was started in 1983 and claimed that

Rs.10,64,51,055/- was spent during the period from 1983 to 1992. The

Commission took note of the various calculations made by Tilak Raj

Talukia. But it thought proper for the purpose of better verification

to engage Shri Ratnakar Nama, Architect and Government Valuer to give

another report. Shri Nama certified the cost of construction of the

basement and the construction upto 10th floor to be Rs.3,18,52,128/-. He

also indicated that the cost of construction of the 11th and 12th floors

was Rs.36,89,312/-. With reference to the Balance Sheet for the period

ending relatable to accounting period 1987-88, the Commission found

that the total cost of the work in fact was Rs.3,74,21,011/-. This was

taken to be the cost incurred on the construction from the basement to

the 10th floor. So far as the 11th and 12th floors are concerned taking

note of the report submitted by Tilak Raj Talukia and Ratnakar Nama

after making adjustments for the expenditure in respect of two lifts,

overhead tanks etc. amounting to Rs.85,26,578/-. Further

Rs.19,66,062.40 for the marble cladding and the black glasses. The cost

of construction up to 12th floor was accordingly worked out as

Rs.5,97,02,963/-. The details indicated are as follows:

Cost of construction for basement &

Ground floor to 10th floor Rs. 3,74,21,011/-

Cost of construction for 11th

& 12th floor Rs. 36,89,312/-

Cost of extra items as mentioned

Above Rs. 85,26,578/-

Cost of Black Glasses Rs. 19,66,062/-

Amount paid to L&DO Rs. 10,00,000/-

Amount paid to the Owners Rs. 71,00,000/-

_________________________

Total Rs. 5,97,02,963/-

_________________________

Rupees 50,74,751/- were added as 2% Brokerage, 1.5% Architect Fee

and 5% Administrative Charges to the above figures thus making total

Rs.6,47,77,714/-. It was, therefore, held that a balance of

Rs.6,37,28,621/- was left. The Commission was of the view that the

above amount was obviously used by giving loans to sister concerns.

These companies utilized the said amount for their respective projects.

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The Chartered Accountants' report was treated to be unreliable on

the ground that a sum of Rs.1,46,00,000/- received from Jain Shudh

Vanaspati Co. was not included. The Commission noted that it was

confronted with what was a real mess. The record of the builder was in

a state of anarchy and confusion, and was not reliable. It was observed

that Skippers "Shamelessly plundered the purchasers and harnessed

everything to personal and private advantage."

The objectors had objected to the inclusion of Rs.7,27,504.27

collected as additional charges. But no reason could be indicated to

support the plea regarding non-inclusion.

In its objection to the Report of the Commission, the primary

stand was that the cost of construction has been taken at a lower

figure and the receipts were shown at higher figure. The records,

according to the objector, show that the construction was not completed

in either 1986 or 1987 and the completion was in 1991. Further with

reference to the CPWD rates it was submitted that the cost of

construction is much higher. According to him the following cost will

accrue if the construction is completed in a particular period:-

1983-87 Rs. 7,84,86,534.66

1983-88 Rs. 8,06,14,312.23

1983-89 Rs. 8,31,91,700.75

1983-90 Rs. 8,63,11,308.80

1983-91 Rs. 8,99,21,641.70

1983-92 Rs.10,64,51,055.64

It was also pointed out that the Commission proceeded on

erroneous premises by ignoring the details submitted and the statements

duly verified by the Chartered Accountant. Reference was also made to

MCD Departmental instruments regarding Valuer Reports and Plinth Area

Rates from 1950 to June 1997 where reference was made to a decision of

this Court in Dr. Balbir Singh v. MCD (1985 (1) SCC 167). In that case

certain guidelines were laid down for determination of the rateable

value of the properties subject to Rent Control Legislation.

We have considered the Report of the Commission and the

Objections. It appears that objections, so far as the cost as raised

are based on hypothetical figures. On perusal of the Commission's

Report we find that it not only made an effort to co-ordinate the

various figures submitted by the company, but also engaged the services

of qualified valuers who, on the basis of available data, worked out

the figures.

It would be relevant only to point out so far as the Chartered

Accountants' certificates are concerned that they were un-audited

statements and appear to have been compiled from whatever details were

furnished by the Company. It is fairly accepted by the learned counsel

for Tejwant Singh that complete documents were not produced before the

Commission. The plea taken for non production was that they were

seized by the Central Bureau of Investigation/Police officials.

There is substance in the commissions' findings that the accounts

were cooked up. Copies of certain ledger accounts were produced before

the Commission. It noticed that white fluid was used to obliterate the

entries. A rather vague and fanciful explanation was given that since

the amounts did not relate to the project in question the entries were

obliterated. Interestingly, no explanation was offered as to which

project the entries related and/or the nature of the entries.

We are of the considered view that the more detailed working out,

as done by the Commission, has to be preferred over hypothetical

figures given in the objection on the basis of incomplete and/or

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manipulated data. Therefore, the Report submitted by Justice Bahri

Commission is accepted.

In respect of Technology Parks Ltd. (in short 'TPL') there are

two projects. One relates to village Tushiana Block Bisarakh Tehsil

Dadri Ghaziabad \026 Greater Noida and other relates to plot nos. 23 and

26 Vaishali Parks Apartment \026 Vaishali Ghaziabad. The Commission in its

reports dated 5.9.2001 and 3.12.2001 has submitted its report in

respect of two projects and transactions of TPL. As noted above, at

present, consideration is to the report so far as it relates to plot

nos. 23 and 26 Vaishali Parks Apartment\026Vaishali Ghaziabad. Referring

to the communication from Ghaziabad Development Authority (in short

'GDA') it has noted that plot nos. 23 and 26 Vaishali Parks Apartment \026

Vaishali Ghaziabad were allotted to M/s Kanchan Properties, Kanpur for

a sum of Rs.1.20 crores; 50% of the price had been deposited by the

allottee and the possession was handed over to the allottee and the

plan for constructing a multi storeyed building was also sanctioned.

Balance 50% of the price was yet to be paid and the same had not been

paid upto 31st December, 1995. The amount payable inclusive of interest

etc. is Rs.1,04,74,452/-. Though time was extended, the deposit had not

been made and the allotment was cancelled and the order of cancellation

was communicated to the allottee on 4.4.1996. Proceedings were

initiated under the applicable Public Premises Eviction Act for

obtaining possession. The area allotted was 4840 sq. yds. in terms of

Memorandum of Understanding (in short 'MOU') between M/s Kanchan

Properties and M/s Aldeco Housing and Industries on one side and TPL on

the other side. The rights of the said plot were transferred to TPL

for a consideration of Rs.87.75 lakhs. In the agreement it was noted

that the original allottee had paid Rs.70 lakhs towards principal

amount and Rs.2.25 lakhs towards interest to GDA and balance amount

with other demands of the authority were to be paid by TPL. The

Commission noted that 15 floors + basement and ground floor were

sanctioned for this plot. On verification it was found that bare

structure upto 9 floors including basement were constructed. Upto

signing of MOU, no booking had been done for sale of flats in the

project. The MOU was executed between TPL, Aman Associates, Madhu

Kamboj on one side and M/s Shikha Developers Ltd. (in short ' Shikha')

on the other side on 18th January, 1999. In terms of this MOU plot Nos.

23 and 26 Vaishali Parks Apartment \026 Vaishali Ghaziabad had been

transferred to Shikha for a consideration of Rs.50 lacs. In lieu of

consideration, TPL had purchased a flat measuring 2500 sq. ft. at 1E/2

Jhandewalan Extn., New Delhi in the name of Miss Madhu Kamboj. The

said Jhandewalan flat belongs to M/s Aman Associates and that is why a

tripartite agreement had been entered into. It was noted by the

Commission that the sanctioned area of the project is 109000+13250 sq.

ft. and the covered area is 177250 sq. ft. It was claimed that

Rs.2,30,52,833/- was spent for raising the structure. So far as plot

no.26 Vaishali Group Housing Scheme of 4840 sq. yds. is concerned, the

same was allotted to M/s Charanjit Kochar, a partnership firm (in short

"Kochar") on leasehold basis by GDA. The Commission has noted that the

address of M/s Charanjit Kochar is N-268 Greater Kailash-II, New Delhi

and the price was Rs.1.20 crores and 50% of the price had been

deposited and possession was delivered. Building plans were also

sanctioned. On failure of the allottee to pay the balance price along

with interest, the allotment had been cancelled. Basement, ground

floor and 8 more floors were sanctioned and the structure constructed

was upto 8 floors. It was claimed that the sanctioned covered area was

1,70,357 sq. ft. But in reality it was 1.06,000 Sq. ft. + 13250 Sq.

ft. for the basement. The total cost of construction was claimed to be

Rs.2,17,00,000/-. M/s Charanjit Kochar had made the bookings and

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collected Rs.1,43,29,344/- from the purchasers of the plots. The rights

in the project were transferred to TPL for a consideration of

Rs.30,00,000/-. According to the terms of MOU, the persons who had made

the bookings were still to pay Rs.18,43,371.50. This plot was also

transferred to Shikha vide MOU dated 18th January, 1999.

The Commission issued public notices inviting claims from the

members of public who had booked spaces in both the projects of plot 23

and 26 Vaishali Parks Apartment. Individual notices were also sent to

the persons whose addresses were available.

In response, 619 claimants claimed to have made bookings. The

amount of total claims which has been accepted comes to

Rs.5,62,76,875/- while the amount of rejected claims comes to

Rs.18,58,473/-. The total area booked by the claimants whose claims

have been accepted comes to 353615 sq. ft. Out of the total claims 360

claimants sought for refund of their deposited amounts while 230

claimants continued to stake their claim for allotment of plots booked.

11 claims were rejected. It was noted that 18 claims were registered

twice. The claimants who claimed allotment have booked total area of

118947 sq. ft.

During the course of hearing, Mr. Sanjay Parikh, learned counsel

appearing for the claimants submitted that those persons who had

claimed allotment were not insisting on it and, in fact, would also

like to get refund of the deposited amount with reasonable interest.

Learned counsel appearing for TPL submitted that after it had

transferred the interest to Shikha, it had no subsisting interest.

One question which arises for consideration is that the

construction of 128 flats had been sanctioned. If the allotments are to

be made to all those who claim allotment there will be some controversy

as to who of the 230 claimants who are interested in allotment will get

from 128 sanctioned flats. In that context, Mr. Parekh had submitted

that there was no rigidity on the allotment aspect and as noted above,

depositors will be happy to have the amount refunded with reasonable

interest. It appears that the amount claimed by GDA was deposited by

Shikha and it was treated to be a fresh sanction. It is to be noted

that Kochar never appeared before this Court during earlier

proceedings. There was no negotiation with Kochar by the GDA and on

the contrary negotiation was with Shikha. Claim of Kochar that the

deposit was made by Shikha on its behalf does not warrant acceptance.

Though it was submitted by TPL that area as available will be

sufficient to take care of the claimants, there can be no definite

direction to all claimants because original sanction related to 128

flats. After having entered into arrangement with Shikha TPL has no

further role to play. Therefore, both TPL and Kochar go out of picture.

Learned counsel appearing for Shikha submitted that if three

months' time is granted, it shall be able to pay all the 590 claimants

(360 depositors who have claimed refund and 230 who were interested in

getting plots but have alternatively prayed for refund). It is

submitted that if construction is permitted, Shikha will refund the

amount with interest. We accept the prayer subject to following

conditions:

(1) An undertaking shall be filed before this Court within two weeks

from today clearly stating the undertaking of Shikha to pay back

all the 590 allottees the amount they had deposited and accepted

by the Commission along with 8% interest from the date of deposit

till the date of payment.

(2) Construction on the area in question shall be permitted on the

basis of sanctioned plan. But no sale of the properties is

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permitted until payment is fully made by the Shikha.

(3) A bank guarantee covering the entire amount payable alongwith

interest shall be furnished and filed with the Registrar General

of this Court. After all the claims are settled, the Registrar

General on verification of the documents to be filed regarding

full payment of all the claimants shall discharge the Bank

guarantee with due intimation to the bank(s) giving the

guarantee.

We feel it would be appropriate to appoint a senior judicial

officer to scrutinize the claims of all the claimants other than those

who are to be paid by Shikha and to direct disbursement of the amounts

out of the surplus available from the sale of 3 Aurangzeb Road

property. We are informed that several legally enforceable

judgments/decrees/orders have been passed to which effect has to be

given. The officer to be appointed shall also examine the

enforceability of the judgments/decrees/orders in question, and pass

appropriate orders regarding payment, if any, to be made. The

properties identified by the Commission to have been acquired of,

application of funds received from the depositors may be attached and

such other assets and properties which in his prima facie opinion

appear to have been acquired out of such amount may also be attached by

the officer. Such assets and properties may be put up to sale by him.

If any objection is raised within two months of the date of attachment,

the officer shall consider the same and with his views and findings

place the matter before this Court for further orders.

We request the Hon'ble Chief Justice of the Delhi High Court to

nominate a suitable judicial officer for the purpose. The officer

should not be below the rank of Additional District and Sessions Judge.

Considering the pains taken by Mr. Dayanand Krishnan, learned

amicus to assist the Court in dealing with the complex matters, it

would be unfair not to direct payment of honorarium to him. Presently,

let a sum of Rs.50,000/- be paid to him by the Registry out of the

surplus available from the sale of 3, Aurangzeb Road property.

Call the matter after four months for further orders and

directions.