# DELHI DEVELOPMENT AUTHORITY v. SKIPPER CONSTRUCTION COMPANY (P) LTD

- **Citation:** [1996] Supp. 2 S.C.R. 295
- **Court:** Supreme Court of India
- **Decided:** 1996-05-06
- **Bench:** B.P. Jeevan Reddy, K.S. Paripoornan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/delhi-development-authority-v-skipper-construction-company-p-ltd-14276
- **Pages:** 31

## Headnote

Constitution of India, Article 142-Power to do complete justice between pmties-Sale of space in proposed building by defrauding the people
and in violation of court orders-Court finding that persons defrauded should
be restored to the position before the fraud took place-Held, in order to do
complete justice, the court can make appropriate orders without being inhibited by the absence of any statutory provision-Court of Equity.
A
B
c
Company Law-:Lifting the corporate veil-S, an auction purchaser of
plot of land defrauding investors by selling space in proposed building even
while defaulting in payment for land-S diverting monies to front companies D
of which its chaimian TS, his wife and sons were directors-Held, where
corporate device is a n1ere cloak for comn1itting illegalities, the veil- would be
pierced and all members of the family would be treated as one entity; held
fwther, the property of front company would be attached to realise monies
owing to the people defrauded-Constitution of India, Article 142.
E
Constitution of India Articles 129, 142-contempt of court-S, an
auction purchaser of plot of land duping.investors by selling space in proposed
building even while defaulting in payment for land-S wilfully and repeatedly
disobeying court orders-S issuing advertisements and continuing to sell space
even after express prohibitory orders of Supreme Court-Held, principle that F
contemner should not be allowed to enjoy or retain fruits of contempt would
be given effect to; held further, Article 129 is a cmistiutional power which
when used in tandem with Article 142 would override technical and procedural objections to such use.
Constitution of India Articles 136, 142-Finality of orders-in earlier G
proceedings Supreme Court directing Delhi Development Authority to bring
to sale of plot of land after auction purchaser repeatedly failed to make
balance payments-Property sold and sale proceeds realised by DDA-Question of repayment of those defrauded by auction-purchase1-Auction purchaser contending that 111onies for repaynient should con1e fronz sale proceeds H
295
296
SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
A
with DDA-Held, earlier ordei:< under which sale monies vested absolutely in
DDA became final and were not to be disturbed in pwported exercise of
power under A1ticle 142; held fwther, ways and means of doing complete
justice should yet be devised.
B
c
D
E
F
In an auction ofa plot of land in New Delhi by the Delhi Development
Authority (DDA) in 1980, the highest bid was offered by the respondent S.
While it deposited twenty-five percent of the sum immediately, S defaulted
on the payment of the balance. S asked for and was granted by DDA seven
extensions of time for making payment between January 1981 and April
1982. As S still did not pay the balance, proceedings were taken for
cancelling the bid. S went to court and on May 29, 1982 obtained stay of
cancellation.
On the recommendations of a committee constituted by the DDA, S
was asked in 1984 to execute a revised agreement. S raised all sorts of
objections and finally executed the revised agreement in 1987.
Even before S was given permission to enter upon the land and start
construction, it began selling place in the proposed building to various
persons and in the process collected Rs. 14 crores from purchasers. In a
writ petition by S questioning DDA's move to cancel its bid, the High Court
made an order on December 21, 1990 directing S to pay DDA a sum of Rs.
8.12 crores and stop all further construction with effect from January 9,
1991 till the date payment was made. S failed to deposit the amount as
directed. In a Special Leave Petition filed by it, this court granted S an
interim order on January 29, 1991 subject to it depositing Rs. 2.5 crores
within one month and another sum of Rs. 2.5 crores before April 8, 1991.
S was expressly prohibited from inducting any person in the building and
from creating any rights in favour of third parties.
Even after January

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......
DELHI DEVELOPMENT AUTHORITY
v.
SKIPPER CONSTRUCTION COMPANY (P) LTD.
MAY 6, 1996
(B.P. JEEVAN REDDY, K.S. PARIPOORNAN, JJ.]
Constitution of India, Article 142-Power to do complete justice between pmties-Sale of space in proposed building by defrauding the people
and in violation of court orders-Court finding that persons defrauded should
be restored to the position before the fraud took place-Held, in order to do
complete justice, the court can make appropriate orders without being inhibited by the absence of any statutory provision-Court of Equity.
A
B
c
Company Law-:Lifting the corporate veil-S, an auction purchaser of
plot of land defrauding investors by selling space in proposed building even
while defaulting in payment for land-S diverting monies to front companies D
of which its chaimian TS, his wife and sons were directors-Held, where
corporate device is a n1ere cloak for comn1itting illegalities, the veil- would be
pierced and all members of the family would be treated as one entity; held
fwther, the property of front company would be attached to realise monies
owing to the people defrauded-Constitution of India, Article 142.
E
Constitution of India Articles 129, 142-contempt of court-S, an
auction purchaser of plot of land duping.investors by selling space in proposed
building even while defaulting in payment for land-S wilfully and repeatedly
disobeying court orders-S issuing advertisements and continuing to sell space
even after express prohibitory orders of Supreme Court-Held, principle that F
contemner should not be allowed to enjoy or retain fruits of contempt would
be given effect to; held further, Article 129 is a cmistiutional power which
when used in tandem with Article 142 would override technical and procedural objections to such use.
Constitution of India Articles 136, 142-Finality of orders-in earlier G
proceedings Supreme Court directing Delhi Development Authority to bring
to sale of plot of land after auction purchaser repeatedly failed to make
balance payments-Property sold and sale proceeds realised by DDA-Question of repayment of those defrauded by auction-purchase1-Auction purchaser contending that 111onies for repaynient should con1e fronz sale proceeds H
295
296
SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
A
with DDA-Held, earlier ordei:< under which sale monies vested absolutely in
DDA became final and were not to be disturbed in pwported exercise of
power under A1ticle 142; held fwther, ways and means of doing complete
justice should yet be devised.
B
c
D
E
F
In an auction ofa plot of land in New Delhi by the Delhi Development
Authority (DDA) in 1980, the highest bid was offered by the respondent S.
While it deposited twenty-five percent of the sum immediately, S defaulted
on the payment of the balance. S asked for and was granted by DDA seven
extensions of time for making payment between January 1981 and April
1982. As S still did not pay the balance, proceedings were taken for
cancelling the bid. S went to court and on May 29, 1982 obtained stay of
cancellation.
On the recommendations of a committee constituted by the DDA, S
was asked in 1984 to execute a revised agreement. S raised all sorts of
objections and finally executed the revised agreement in 1987.
Even before S was given permission to enter upon the land and start
construction, it began selling place in the proposed building to various
persons and in the process collected Rs. 14 crores from purchasers. In a
writ petition by S questioning DDA's move to cancel its bid, the High Court
made an order on December 21, 1990 directing S to pay DDA a sum of Rs.
8.12 crores and stop all further construction with effect from January 9,
1991 till the date payment was made. S failed to deposit the amount as
directed. In a Special Leave Petition filed by it, this court granted S an
interim order on January 29, 1991 subject to it depositing Rs. 2.5 crores
within one month and another sum of Rs. 2.5 crores before April 8, 1991.
S was expressly prohibited from inducting any person in the building and
from creating any rights in favour of third parties.
Even after January 29, 1991, S repeatedly invited offers from the
public for purchase of space in the proposed building. In this process it
G collected a sum of Rs. 11 crores. After the Special Leave Petition was
dismissed on January 25, 1993 by this court, DDA re-entered the plot and
took possession of the property with the building free from all encumbrances. DDA also forfeited the amounts paid till then by S.
S filed another suit in the Delhi High Court and obtained interim
H
orders staying the re-auction of the plot by DDA. In a Special Leave
'
D.D.A. v. SKIPPER CONTN. CO. (P) LTD.
297
Petition by DDA, this court took notice of !he conduct of TS and his wife A
SK, the directors .of S, and initiated sou motzt contempt proceedings
against them. It found them_ guilty and sentenced TS to six month's simple
imprisonment, SK to one month and each of them to pay a fine of Rs.
50,000. The sentences were deferred by this court upon the contemners
offering to furnish bank guarantee in the sum of Rs. 11 crores to the B
Registrar General of this court before March 31, 1995 and also deposit in
this court the entire sum of Rs. 11 crores by a bank draft before November
30, 1995.
The contemners deposited a sum of Rs. 2 crores but failed to deposit
the balance. They also failed to furnish the bank guarantee. They were C
committed to prison and they served out their sentence.
In the re-auction of the plot M/s. Bi's bid of Rs. 70 crores was
accepted and the property transferred in its favour by the DDA. This court
directed DDA to set apart a sum of Rs. 16 crores from the said sum to
reimburse the pre - January 29, 1991 purchasers. On the receipt of the D
report of the Commission appointed by it to prepare a list of persons
entitled to be reimbursed, this court directed payment of the principal
amount to each of the said purchasers.
The post January 29, 1991 purchasers approached this court with
applications seeking directions for sale of the property of TS, his wife and
children which were attached by this court by order dated February 8, 1995
in the suo motu contempt proceedings. They prayed that the proceeds be
used to reimburse them along with interest and damages.
E
Before this court the applicants and the DDA submitted that the F
undergoing of sentences of imprisonment by TS and SK did not relieve
them of their obligation to pay back the claimants whom they had
deliberately and fraudulently induced to part with monies in violation of
this court's orders. The properties attached should be sold for meeting
these claims as well as the interest amounts due to the pre-January 29, G
1~91 purchasers. On behalf of TS and SK it was contended that the monies
for reimbursing the claimants should come out of Rs. 85 crores collected
by DDA so far from the initial and subsequent sale of the plot. The two
sons of TS and SK submitted that their businesses were independent of
their parents' and that none of the n1onies received by their parents from
the purchasers had been diverted to the sons or to the companies of which H
298
SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
A
the sons were directors. DOA informed this court that on October 1, 1993,
TPP, a company, through its Chairman TS had, in relation to its property
at 3, Aurangzeb Road, New Delhi, executed a lease agreement in favour of
a company in Ireland for a period of live years at a rent of Rs. 1 lakh per
month. On the same day the Irish company executed a lease deed in favour
B
c
of the Embassy of Israel, New Delhi for a period of nine years at a rent of
Rs. 8,78,360. One of the sons of TS was also a director of TPP. DDA
submitted that this property alone was sufficient to realise the monies
owing to the persons defrauded by the contemners.
Disposing of the applications, this court
HELD: 1.1. Although while acting under Article 142 of the Constitution this Court would respect a statute, the absence of a
statute or
statutory provisions would not inhibit this court from making appropriate
orders necessary for doing complete justice between the parties. (320-H)
D
1.2. Even if a fiduciary relationship might not exist in the present
case and it was not a case of a holder of public office, yet if it was found
that someone had acquired properties by defrauding the people and if it
is found that the persons defrauded should be restored to the position in
which they would have been but for the said fraud, the court could make
E
all necessary orders. This was what equity meant and in India the courts
were not only courts of law but also courts of equity. [320-E]
Attomey General for India v. Amratla/ Prajivandas, [1994) 5 SCC 54,
relied on.
F
Attomey General for Hong Kong v. Reid, (1993) 3 WLR 1143, referred
to.
1.3. The following directions are issue :
(i) The property at No. 3, Aurangzeb Road, New Delhi would be
G attached, if not already attached. If already attached, it would continue to
be under attachment; [323-B)
(ii) The Embassy of Israel in India, New Delhi, the lessee of the said
property, to deposit the monthly rent payable in respect of the said
H
building in this Court with effect from the date of receipt of a copy of the
•.
D.D.A. v. SKIPPER CONTN. CO. (P) LTD.
299
order and continue to deposit the same until further orders. Such deposit A
in Court shall discharge the Embassy of ils obligation to pay rent to
'Maple Lear its landlord. [323-C]
(iii) TS and his wife, SK, to deposit in this Court a sum of rupees
ten crores within two months from the date of the order. In default, steps
would be taken to sell the property at No. 3, Aurangzeb Road, New Delhi
by inviting tenders from the public. An amount of Rupees ten crores is
tentatively arrived at as the amount rer1uired to reimburse the pre January
29, 1991 purchasers in full and also to reimburse the post-January 29, 1991
purchasers in full. This would not be treated as the final figure required
B
in this behalf. [323-D-E]
C
(iv) The attachment of properties belonging to TS, his wife and
children, already effected, including the properties mentioned in the application (I.A. No. 29 of 1996) filed by the D.D.A would continue to be in
force pending further orders. It would be, however, open to any to them to D
come forward with a proposal to sell any of those properties and if this
Court was satisfied about the honafides of the deal, the attachment would
be lifted on condition that the consideration so received was deposited into
this Court. [323-F)
(v) Since it was necessary fo ascertain the persons who had paid E
amounts to S after January 29, 1991 for purchasing the space in the said
building, and to exclude the claims of non-genuine persons, Sri O. Chinnappa Reddy, a former Judge of this Conrt, would be a one-man Commission to ascertain the number and identity of the persons who had
purchased the space in the building being raised by S after January 29,
F
1991 and also to determine the amounts paid by each of them.
[323-H, 324-A-B]
2.1. The rule that a contemnor ought not to be permitted to enjoy or
retain the fruits of his contempt has to be applied overruling any technical
. or procedural objections. [313-D]
G
2.2. Article 129 is a consti.tutional power and when exercis~d in
tandem with Article 142, all such objections should give way. [313-D].
Mohd. Idris v. RJ. Babuji, [1985] 1 SCR 598; Clarke v. Chadbum,
(1985) 1 All. E.R. 211; Century Flour Mills Limited v. S. Suppiah, AIR (1975) H
3llll
SUPRF'>lF. COURT Rl'PURIS I lll%j SUPP. 2 S.C.R.
A
Madras 270 and Sujit Pal v. Prabir Kumar Sun, AIR (1986) Calcutta 220,
referred to.
B
c
3.1. The fact that TS and his family had created several companies
\\
1ould not prevent this court from treating all of them as one entity belonging to and controlled by TS and family if it was found that these corporate
bodies \\'ere nu~rely cloaks behind \\'hich lurked TS and/or 1nembers of his
fan1ily and that the device of incorporation \\'Us really a ploy adopted for
committing illegalities and/or to defraud people. [316-E-F]
Aron Salomon \', Sulunwn & Company Limited, (1897) AC 22; Tata
Enginee1ing und Locon1otive Cun1puny Lin1ited v. State of Bihu1~ I 1964] 6
SCR 885 and DHN Food Disflibl//01:1· Ltd. v. London Borough of Tower
Hamlets, [1976] 3 AIL E.R. 462.
Gower: Modern Company Law, 4th Edn. (1979) at p.137; Pennington,
c·onipany Law, 5th Edn. 1985, at p.153; Palnier's C'on1pany Luw, \'ol. I,
D Part-II; Profe.uor S. Ottolenghi, "Frum Peeping Behind the Cu1porate Veil, to
Ixn01ing it Completely" in (1990) 53 Modern Law Review 338; L. Mawice
TVonnser,
1'Piercing the veil of Cotporatc entity·• in (1912) XII Columbia Law
Review 496, referred to,
E
3.2. It would suffice for the above purpose if the property, viz,, No,
3, Aurangzeb Road, New Delhi, which appeared to belong wholly and
exclusively to TS and his wife is proceeded against. The corporate veil
would be ignored and so would the fact that at present their son PS and
his wife are the directors, [322-B]
F
33, It is clear that the property belonged to TS and the corporate
wil and the change of directorship are all mere devices to screen the said
property and its income from their creditors including the purchasers
aforesaid. Tej Properties Private Limited was nothing but a fig-leaf to
cover up the reality that it was TS, the contemnor, who was the author or
G all these deals and devices. The transfer of share-holding, if any, between
the father and the son (and their respective "ives) would also be treated
as a sham transaction, [322-E-F]
4.1. The contention that the monies required for pa)ing the persons
defrauded must come from DDA could not be accepted, Even while acting
H under Article 142, it is not open for this court to go behind the orders of
..
•·
D.D.A. v. SKIPPER CONTN. CO. (P) LTD. [B.P . .IEEV AN REDDY, J.] 301
the High Court as allirmed by this court under which the plot, the A
construction thereon and the monies already paid towards sale consideration had all vested absolutely in the DDA. (311-B-D]
In re : Vinay Chandra Mishra, [1995] 2 SCC 584, referred to.
4.2. It is factually incorrect to say that DDA stood by and allowed S B
to defraud the people by issuing advertisements. Secondly, even if there
was any collusion between the ollicials of the DDA and S, the question still
would arise whether DDA could be held bound by such actions of its
officials acting beyond their authority and acting adverse to the interests
of DDA intentionally. Where the acts and deeds of the officials were not C
only beyond their authority but done with a malafide intent, it may not be
just and fair to bind DDA with such malafide acts and deeds. [321-C-D]
CIVIL APPELLATE JURISDICTION: Interlocutory Applications
Nos. 23, 27 and 29.
In
Special Leave Petition (C) No. 21000 of 1993.
From the Judgment and Order dated 9.12.93 of the Delhi High Court
in Suit No. 770 of 1993.
Arun Jaitley, Dushyant Dave, H.N. Salve, Rajiv Dhawan, K. Madhava
Reddy, V.A. Bobde, Arvind Nigam, Ms. K. Jaiswal, K.J. John, Ms. Indra
Sawhney, Deepak Dhawan, A. Singh, V.K. Mehta, J.K. Das, P.N. Misra, S.
Misra, Ms. Rachna Joshi Issar, Din Dayal Sharma and Jaswant Singh for
the appearing parties.
The Judgment of the Court was delivered by
D
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F
B.P. JEEVAN REDDY, J. A plot of land was put to auction by the
Delhi Development Authority (D.D.A.) in October 1980. Skipper Construction Company (Skipper) offered the highest bid in a sum of Rs. 9.82 G
crores. It was supposed to be a record bid at that time. According to the
conditions of auction, twenty five percent of the amount was payable
immediately and the rest within ninety days. Skipper deposited the twenty
five percent but did not deposit the balance. It asked for extension
repeatedly and it was granted repeatedly. As many as seven extensions H
302
SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
A
were granted spread over the period January, 1981 to April, 1982. Since
Skipper failed to deposit the balance consideration even within the last
extended period, proceedings were taken for cancelling the bid. Skipper
went to CouH and on May 29, 1982 obtained stay of cancellation*. D.D.A.
applied for vacating the stay. Nothing happened but usual adjournments.
B
c
D
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F
Skipper was simultaneously making representations to D.D.A. to give him
further time. In January 1983, D.D.A. constituted a committee to consider
the request of Skipper and other similar requests and to devise a formula
for ensuring timely payments by such purchasers. The committee reported
that cancellation of bids in such matters usually land D.D.A. in protracted
litigation and suggested that to enable them to pay the monies due to
D .D .A., the purchasers be given permission to commence development/construction on the plot (though possession as such be not delivered)
subject to the condition that the property in the land would remain with
the D.D.A. until the entire consideration is paid; if the entire consideration
is not paid according to the revised schedule, the D.D.A. should be entitled
to re-enter the plot and take it over along with the construction, if any,
made thereon. (The idea was to enable the purchasers to undertake
development and go on with the construction which would make it easy for
them to sell the space in the building being constructed and thus raise
funds for paying lo D.D.A.) The committee reconilliended further that a
revised agreement be obtained from such purchasers incorporating the
above terms. When called upon to execute the revised agreement, in 1984,
Skipper raised all sorts of objections and executed it only in the year 1987.
Even before permission to enter upon the plot and to make construction
thereon was granted under the revised agrement, Skipper appears to have
been selling the place in the proposed building to various persons and
receiving monies. Once il got the permission to enter upon the plot and to
make construction thereon, it became all the more easy for it to sell the
space in the proposed building. It did not pay the first instalment under
the revised agreement in time but only after some delay. It did not pay the
second instalment. Bank guarantees furnished by it in terms of revised
agreement were also found to be defective. Every time the D.D.A. thought
G of cancelling the agreement on account of the >aid defaults, an argument
was put forward that it would cause great hardship to hundred' of persons
*
H
We are unable to see what jurisdiction or justification the court could have for passing
such an order in an ordinary case of sale and purchase of property, more so when
Skipper had failed to pay the balance consideration not only \vithin the time stipulated
but despite several extensions.
D.D.A. v. SKIPPER CONTN. CO. (P) LID. [B.P. JEEVAN REDDY,J.] 303
who have purchased space in the proposed building and that they would A
be deprived of their hard-earned monies. Skipper has been making some
small token payments from time lo time meanwhile. While the endless
correspondence and discussions were going on between Skipper and
D.D.A., Skipper went to Delhi High Court by way of a writ petition, C.W.
No. 2371 of 1989, asking for writ of mandamus to the D.D.A. to sanction B
the building plans or in the alternative to grant permission to him to start
construction at his risk. On March 19, 1990, the High Court passed an
order permitting Skipper to commence construction in accordance with the
sanctioned plans subject to deposit of a sum of Rupees twenty lakhs in two
instalments and Rs. 1,94,40,000 within one month. Against the said order,
D.D.A. came to this Court by way of Special Leave Petitions (C) Nos. 6338
C
and 6339 of 1990. Meanwhile, Writ Petition (C) No. 2371of1989 came up
for final hearing on December 21, 1990. The Delhi High Court made an
order on that day directing Skipper to pay to D.D.A. a sum of Rs.
8,12,88,798 within thirty days and to stop all further construction with effect
from January 9, 1991 till the said payment was made. It was provided that D
in default of such payment, the licence (revised agreement dated August
11, 1987) would stand determined and D .D .A. would be entitled to re-enter
the plot. Reasons for the order were given on January 14, 1991. Skipper
failed to deposit the amount as per the direction of the High Court. It
approached this Court by way of Special Leave Petition (C) No. 186 of
1991. On January 29, 1991, this Court granted an interim order subject to E
Skipper depositing Rs. 2.5 crores within one month and another sum of
Rs. 2.5. crores before April 8, 1991. Skipper was expressly prohibited from
inducting any person in the building and from creating any rights in favour
of third parties. Inspite of the said prohibitory orders from this Court,
Skipper issued an advertisement on February 4, 1991 in the leading F
newspapers of Delhi inviting persons to purchase the space in the proposed
building. It published such advertisements repeatedly. Special Leave Petition (C) No. 186 of the 1991 was ultimately dismissed on January 25, 1993,
whereafter, D.D.A. re-entered the plot and took physical possession of
property on February 10, 1993 along with lhe building thereon free from
all encumbrances in terms of the revised agreement/licence and as G
provided in the orders of the Delhi High Court dated December 21,
1990/January 14, 1991. It also forfeited the amounts paid till then by
Skipper in terms of the revised agreement and the said Judgment.
January 29, 1991 marks the watershed in these proceedings. Before H
304
SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.
A
the said date, Skipper had collected about Rupees fourteen crores from
various parties agreeing to sell the space in the propo,,ed building. Even
after January 29, 1991, Skipper issued several advertisements and collected
substantial amounts - Rupees eleven crores, according to its own version -
from various parties agreeing to sell the space in the said building. ft
B
c
appears that same space was sold to more than one person and monies
collected. Not only did Skipper brazenly violate the orders of this Court
dated January 29, 1991 bx issuing advertisements, it also filed a suit in the
Delhi High Court being Suit No. 770 of 1993 seeking an injunction restraining the D.D.A. from interfering with its alleged title and possession over
the plot and for a declaration that the re-entry by D.D.A. was illegal and
void! It also sought for a declaration that it has discharged all the amounts
due to D.D.A. and that nothing was due from it. It obtained interim orders
staying re-auction of the plot.
Against the interim order of the High Court staying the re-auction
of the plot, D.D.A. approached this Court by way of Special Leave Petition
D (C) No. 21000of1993. Noticing the conduct of Skipper, this Court initiated
sou n1otz1 contempt proceedings against Tejwant Singh and his wife,
Surinder Kaur, directors of Skipper. They were asked to explain (1) why
did they institute Suit No. 770 of 1993 in respect of the very same subjectmatter which was already adjudicated by this Court on January 23, 1993,
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i.e., by afllrming the orders of the High Court dated December 21, 1990
and January 14, 1991 and (2) why did they ente1 into agreements for sale
and create interest in the third parties in defiance of the orders of this
Court dated January 29, 1991. After hearing the contemnors, this Court
found them guilty of contempt of this Court in the follO\ving words :
"We, therefore, invoke our power under Article 129 read with
Article 142 of the Constitution and order as follows : We sentence
contemner-Respondent 1, Tejwant Singh lo undergo simple imprisonment for six months and to pay a fine of Rs. 50,000 (Rupees
fifty thousand only). We further sentence contemner-Rcspondent
2, Surinder Kaur to undergo simple imprisonment for a period of
one month and to pay a fine of Rs. 50,000 (Rupees fifty thousand
only). In default of payment of fine, the contemners shall further
undergo simple imprisonment for one month. The payment of fine
shall be made within one month from today.
All the properties and the bank accounts standing in the names
D.D.A. v. SKIPPER CONTN. CO. (P) LTD. [B.P. JEEV AN REDDY, J.] 305
of the contemners and the Directors of M/s. Skipper Construction A
Co. (Pvt.) Ltd. and their wives, sons and unmarried daughters will
stand attached."
At that stage, Sri G. Ramaswamy, learned counsel appearing for the
contemnors, requested for deferment of the sentence of imprisonment
subject to conditions indicated by him. On the basis of the said offer, this
Court deferred the sentence of imprisonment subject to the following
conditions.:
B
"(1) The contemners shall furnish bank guarantee in favour of the
Registrar General of this Court in the amount of Rs. 11 crores C
(Rupees eleven crores only) on or before 31.3.1995. The guarantee
will be of a nationalised bank or any foreign bank operating in
India. The bank guarantee will be given for a period of one year
from the date of furnishing the bank guarantee.
(2) The contemners shall deposit the entire amount of Rs. 11 D
crores by a bank draft in the Registry of this Court on or before
30.11.1995. If they fail to do so, the bank guarantee will become
encashable and will be encashed forthwith after 30.11..1995.
(3) If the contemners fail to give the bank guarantee by 31.3.1995
as aforesaid, the sentence of imprisonment wi1l become enforceable at once.
(4) No application for extension of time either to furnish the bank
guarantee or to make the payment as aforesaid, will be entertained
by this Court.
(5) The contemners shall not leave the country without the express
permission of this Court.
(6) List of properties given by the contemners is taken on record.
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The contemners will also file a list of properties held by their sons G
and unmarried daughters within one week from today.
(7) If and when any property that is attached under this order is
sought to be alienated or encumbered to raise money to pay the
liability of Rs. 11. crores stated above, the contemners \Vill he at
liberty to approach the Court for permission to do so.
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(8) The attachment of the properties and the bank accounts shall
stand raised on the contemners furnishing the bank guarantee as
aforesaid.
(9) The order with regard to the disbursal of the amount deposited
will be passed after the amounts are deposited as aforesaid."
The contemnors deposited a sum of Rupees two crores but failed to
deposit the balance. They also failed to furnish the Bank guarantee. As a
result of the said failure, they were committed to prison. Both the contemnors have served out their sentence.
Meanwhile, D.D.A. invited tenders for the sale of the said plot of
land along with the construction raised thereupon. The highest offer
received was in the sum of Rupees seventy crores from M/s. Banganga
Investments. It was accepted with the permission of this Court. The conD sideration has been deposited with the D.D.A. and the property transferred
in favour of the said purchaser. At this stage, the question arose as to what
should be done with the hundreds of persons who have been duped and
defrauded by Skipper and who had parted with substantial amount on the
basis of the fraudulent and false representations made by Skipper. This
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Court made a distinction between persons who purchased the space before
January 29, 1991 and the persons who purchased the space thereafter. The
first concern of this Court was to reimburse the persons who purchased
space in the said building prior to January 29, 1991. Their claims were said
to be in the region of Rupees fourteen crores. Accordingly, this Court
directed D.D.A. to set apart a sum of Rupees sixteen crores (out of the
said amount of Rupees seventy crores) and to make it available to such
purchasers in accordance with the orders of this Court. This Court also
requested Justice R.C. Lahoti of the Delhi High Court to act as a one-man
Commission to prepare a list of persons \Vho had paid the amounts prior
to January 29, 1991 and to determine the amount paid by each of them.
After an elaborate enquiry, Justice Lahoti Commission submitted a Report
G dated February 2, 1996 according to which a sum of Rupees 13,27,37,561.59
crores was paid by more than seven hundred persons. The Commission
asked for directions of this Court whether the said persons should also be
paid the interest in addition to the principal, as claimed by them. When
the report of the Commission came up for order before this Court we
H directed that for the time being only principal amount shall be paid to the
D.D.A v. SKIPPER CONTN. CO. (P) LTD. (B.P. JEEV AN REDDY, J.] 307
said purchasers and that the balance amount along with interest accruing A
thereon shall be kept apart. This was done keeping in view the interests of
post-January 29, 1991 purchasers. It is true that these persons did purchase
nohvithstanding the warning notice of D.D.A. but it is equally possible that
many of them may have seen only the subsequent advertise;nents of Skipper and not the warning notice of D.D.A. published on February 13, 1991. B
We may clarify that our order dated February 12, 1996 does not mean
that the pre-January 29, 1991 are not entitled to interest on the amounts
paid by them for which they have a legitimate claim. We have only kept
that claim under consideration pending further developments in the matter.
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We may also mention that this Court had appointed another Commission headed by Justice 0. Chinnappa Reddy, a former Judge of this
Court, to enquire into the role played by the officials of the D.D.A. in the
matter and to recommend appropriate action against them. Justice Chinnappa Reddy Commission submitted a Report promptly on July 7, 1995,
after conducting a painstaking and elaborate enquiry, on the basis of which D
this Court had directed disciplinary action to be taken against certain
officers of the D.D.A.
At this stage, several applications have been filed by the post- January
29, 1991 purchasers to sell the properties of Tejwant Singh, his wife and E
children, which were attached by this Court under its Order dated February
8, 1995 (in suo motu contempt proceedings) and utilise the proceeds so
realised to reimburse them along with interest and damages. Notice of the
said applications was given to Tejwant Singh and Surinder Kaur and to the
sons of the said persons whose properties were attached under the
. aforesaid orders. We have heard the parties at length on April 18, 1994.
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S/Sri V.A. Bobde and Dushyant Dave, appearing for the claimants
(post-January 29, 1991 purchasers) and Shri Arun Jaitley for the D.D.A.
submitted that undergoing the sentence uf imprisonment by Tej\vant Singh
and his wife Surinder Kaur does not erase their obligation to pay back the
amounts to the said claimants whom they had deliberately and fraudulently G
induced into parting with substantial amounts in clear and direct violation
of the orders of this Court. They submitted that the order of attachment
of the properties of Tejwant Singh and his wife and children was an order
independent from the order of punishment imposing sentence of imprisonment and that the attachment was meant for realising amounts necessary H
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for reimbursing the persons defrauded. The attached properties should
now be sold and the proceedings therefrom utilised for paying the postJanuary 29, 1991 claimants, it is submitted. Sri Arun Jaitley further submitted that the claim of the pre-January 29, 1991 purchasers for interest
on the amounts paid by them is still there and has to be kept in mind while
passing orders in these applications. It is submitted that the contemnors
should not be allowed to keep or enjoy the fruits of their contempt and
that until all the persons defrauded by Skipper are fully re-compensated,
the contemnor's liability does not cease.
S/Sri Harish Salve and Rajeev Dhavan, appearing for Tejwant Singh
and Surindcr Kaur respectively, took the stand that while all the purchasers, whither pre- or post-January 29, 1991 should undoubtedly be duly
reimbursed, the monies for that purpose should come out of the monies
collected by the D.D.A. on account of the said plot. Interests of justice and
considerations of equity, which are the guiding factors fur this Court while
acting under Article 142 of the Constitution call for such a direction. They
submitted that as against Rs. 9.82 crorcs payable to D.D.A., Skipper has
paid more than Rupees fifteen crores in all to D.D.A. The amounts
received from the purchasers has actually been utilised for raising the
construction which has now vested in the D.D.A. in terms of the orders of
the Delhi High Court dated December 21, 1990/.lanuary 14, 1991. D.D.A.
thus not only got back the plot of the land but also the construction made
by Skipper tree of any encumbrances. They have realised a sum of Rupees
seventy crores by selling the same. In other words, D.D.A. has realised a
total of Rupees eighty five crores on account of the said plot. It is true that
have set apart Rupees sixteen crores out of that but yet they are in
possession of about Rupees sixty nine crures of the said money. The claim
of post-January 29, 1991 purchasers is in a sum of about Rupees eleven
crores. An amount of Rupees five crores is lying with the Court. Whatever
balance amount is required to pay interest to pre-January 29, 1991 purchasers and to pay off the post-January 29, 1991 purchasers should come
out of the said amount of Rupees sixty nine crores now with D.D.A.
Learned counsel suhmitted that on account of various proceedings taken
against Skipper and their directors and the attachment of their properties
and the adverse publicity in that behalf, it has become impossible for them
to generate any monies for depositing in this Court. They requested that a
Commission be appointed to determine the value of the structure raised
H by Skipper on the said plot and also to determine the amount received by
D.D.A. v. SKIPPER CONTN. CO. (P) LTD. [B.P. JEEV AN REDDY. J.] 309
Skipper from post-January 29, 1991 purchasers and to direct that the A
amount required to pay them should come out of the funds with the D.D.A.
Sri K. Madhava Reddy, learned counsel appearing for the two sons
of Tejwant Singh and Surinder Kaur (Prabhjol Singh and Prnbhjit Singh),
submitted that the businesses of the sons are independent and distinct from
their parents and that none of the monies received by their parents from
the aforesaid purchasers has been diverted to them or to the companies of
which they are directors. In fact, the case of the third respondent, Prabhjot
Singh, is that he has separated from his father and that the company,
Technological Park (P) Limited, at NO IDA (of which he and his wife arc
directors) has nothing to do with the funds or activities of their parents.
The fourth respondent, Prabhjit Singh, also submitted that he and his wife
are the directors of Tej Properties Private Limited, of which his parents
were directors earlier but that the affairs of Tcj Properties are in no way
connected with the affairs and funds of his parents. He is a director of Tcj
Properties as well as Skipper Properties Private Limited.
D.D.A. has filed a list of properties held by Tejwant Singh, his wife,
Surinder Kaur, and their sons and daughters which according to them
really belong to and are the properties of Tejwant Singh and his wife. They
submitted that the various companies created by Tejwant Singh, his wife
and his children are merely fronts and devices to defraud and defeat the
claims of the purchasers and that for doing complete justice between the
parties, the corporate veil should be lifted and all the said properties, which
have already been attached, should be proceeded with to realise the
amounts necessary for paying the pre-January 29, 1991 purchasers in full
(i.e., interest) and also the post-January 29, 1991 purchasers. In particular,
Sri Jaitley has pointed out the transaction of lease relating to the property
at No. 3, Aurangzeb Road, New Delhi. The facts brought to our notice are
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the following : on October 1, 1993, Tej Properties (P) Limited through its
Chairman and Managing Director, Tejwant Singh, executed a lease agreement in favour of "Maple Leaf Trading Company Limited, a company
having its office at 111, Claremont Road, Dublin, Ireland" for a period of G
five years (with an option to the lessee to have it extended for another four
years) at a rent of Rupees one lakh per month. The lease agreement was
to take effect from October 8, 1993. On October 8, 1993, Maple Leaf
executed a lease deed in respect of the said property in favour of the
Embassy of Israel in India, New Delhi for a period of nine years at the rate H
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of Rs. 8, 78,360 per month. It is pointed out that Tejwant Singh and his
wife, Surinder Kaur, were the only two directors of Tej Properties and that
in 1988 and 1991, one H.S. Sarna and Prabhjit Singh (one of the sons of
Tejwant Singh) were brought in as its directors. It is submitted that this
property really belongs to the contemnors and that this property alone is
sufficient to realise all the monies due to the persons defrauded by the said
contemn ors.
The issues arising from the contentions of the parties are considei ed
hereinafter topic-wise.
17ie nature and ambit of this Cozut's power under Article 142 of the
Constitution.
Article 142(1) of the Constitution of India reads:
''142. Enforcement of decrees and orders of Supreme Court and
orders as to discovery, etc. - (1) The Supreme Court in the exercise
of its jurisdiction may pass such decree or make such order as is
necessary fur doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be
enforceable throughout the territory of lndia in such manner as
may be prescribed by or under any law made by Parliament and,
until provision in that behalf is so made, in such manner as the
President may by order prescribed."
In re: Vinay Chandra Mishra, [1995] 2 SCC 584, this Court dealt with
the scope and width of the power of this Court under Article 142. After
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referring to the earlier decisions of the Court in extenso, it is held that
11statuto~y provisions cannot override the constitutional provisions and Article 142(1) being a constitutional power it cannot be limited or conditioned
by any statutory provision. (Para 48)". It is also held that "the jurisdiction
and powers of this Court under Article 142 arc supple111entary in nature
and are provided to do complete justice in any matter.. .... ". In other words,
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the power under Article 142 is meant to supplement the existing legal
framework - to do complete justice between the parties - and not to
supplant it. It is conceived to meet situations which cannot be effectively
and appropriately tackled by the existing provisions of law. As a matter of
fact, we think it advisable to leave this power undefined and uncatalogued
H so that it remains elastic enough to be moulded to suit the given situation.
D.D.A. v. SKIPPER CONTN. CO. (P) I:ID. [B.P. JEEV AN REDDY, J.] 311
The very fact that this power is conferred only upon this Court, and on no A
one else, is itself an assurance that it will be used with due restraint and
circumspection, keeping in view the ultimate object of doing complete
justice between the parties. Now, coming to the facts of the case before us,
the question is not what can be done, but what should be done ? We are
'of the opinion that even while acting under Article 142 of the Constitution B
of India, we ought not to re-open the orders and decisions of the Courts
which have become final. We do not think that for doing complete justice
between the parties before us, it is necessary to resort to this extra-ordinary
step.