Full Judgment Text
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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.