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.

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  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. 

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  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  Greater Noida and other relates to plot nos. 23 and  26 Vaishali Parks Apartment  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 ApartmentVaishali Ghaziabad. Referring  to the communication from Ghaziabad Development Authority (in short  'GDA') it has noted that plot nos. 23 and 26 Vaishali Parks Apartment   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 PremisesEviction 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  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  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 tofollowing 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  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.