PRESIDENCY UNIVERSITY

SCHOOL OF LAW

CASE ANALAYSIS
ON
DDA V. SKIPPER CONSTRUCTION Co.(P) Ltd.

(1996)4 SCC 622: AIR 1996 SC 2005

SUBMITTED BY:
ARPITA SAHU
B. COM LLB
20171BCL0006

SUBMITTED TO:
PROF. NEHA SINHA

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 DDA V. SKIPPER CONSTRUCTION CO.(P) Ltd.

FACTS OF THE CASE

1. In October,1980, Skipper became the highest bidder for purchase of a plot of land at Jhandevalan in
Delhi which was advertised for sale for Rs 9.82 crores and deposited as per tender schedule.

2. Skipper defaulted in spite of seven extensions during January 1981 to April 1982. When proceedings for
cancellation of the bid were in offering, Skipper moved to the Court and obtained a stay order and started
making representations.

3. DDA appointed a Committee to work out a formula and pursuant to the recommendations of the
Committee, Skipper was asked to enter into a revised agreement incorporating fresh terms. Skipper raised
objections to these proposals from 1984 till 1987 but finally the agreement was entered in 1987.

4. Even before the permission to enter was however granted under the revised agreement, Skipper started
selling the space to be built in the proposed structure and started receiving monies.

5. Though Skipper paid the 1st installment much beyond the time, it did not pay the second installment but
furnished Bank guarantees which were found to be defective. It however made some token payments to
DDA.

6. On 19.3.90 High Court of Delhi permitted construction in accordance with the sanctioned plan subject to
deposit of Rs 20 lakh in two instalment and 1.94 crores in one month.

7. The Delhi High Court passed an order on 21.12.90 directing payment of Rs. 8.12 crores in 30 days and
stopped further construction till the payment is done and stated that the revised agreement would stand
cancelled and DDA would be entitled to re-enter the plot.

8. Skipper defaulted but approached the court in SLP when this court passed an interim order for deposit of
Rs 2.5 crore in one month and Rs 2.5 crore before 8.4.91 and Skipper was expressly prohibited from
inducting any person in the building and from creating any right in favour of third parties.

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9. It is stated that before 29.1.91 Skipper collected about Rs.14 crores from various parties to
sell space in the proposed building. Even after 29. 1.91, Skipper collected various amounts, about
Rs.11 crores. It appears that the same space was sold to more than one person and monies were collected

10. Skipper filed a suit against DDA seeking injunction restraining DDA from interfering with its alleged
title and possession over the plot and sought a declaration that the re-entry by DDA was illegal and sought a
declaration that it had validly paid all amounts due to DDA.And then DDA filed SLP.

11. This court issued suo moto contempt proceeding against the Directors of skipper and the court held them
guilty of contempt under Article 129 and 143 and sentenced them to imprisonment and fine of
Rs 50,000 each.

12. The contemners deposited Rs. 2 crores but failed to deposit the balance and also failed to furnish bank
guarantee. They were committed to prison and they served the sentence.

13. DDA invited fresh tenders and sold the plot with the 14th floor structure to M/s Bangaga
Investment(Video-con) for Rs 70 crores.

14. The sale was accepted with the permission of court and the purchaser deposited the consideration with
DDA and the land and the structure stood transferred to the purchaser.

ISSUES OF THE CASES

1. Whether the purchasers under agreements in respect of Jhandevalan property have a
statutory charge in view of Section 55(6)(b) of the Transfer of Property Act -against the vendor's
interest in the property? Whether such charge can be enforced against any substituted security?

2. Whether the purchasers are entitled to interest under Section 55(6)(b) of the Transfer
of Property Act and also in view of the observations made in the judgment of this Court dated
May 6, 1996?

3. Whether the period of limitation for enforcing claims by the purchasers would be 12 years under the
Limitation Act?

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4. Whether the purchasers can rely on the finding of 'fraud' given by this Court in its order to contend that
the claim for interest is sustainable because of fraud by Skipper on the purchasers?

JUDGEMENT
In this case it was held that even if there was fiduciary relationship, or no holder of public office was
involved, yet if it is found that someone has acquired properties by defrauding the people, and if it is found
that persons defrauded should be restored to the position in which they would have been but for the said
fraud, the court can make necessary orders. The courts in India means not only court of law but also court of
equity. The court further held that all such properties must be immediately attached. The burden of proof to
prove that the attached properties were not acquired with the aid of monies or properties received in the
course of corrupt deals shall lie on the holder of such properties.

CASE ANALYSIS
With respect to DDA v. Skipper Construction Co.(P) Ltd, the concept of doctrine of public accountability
will be applied. It is one of the most emerging facet of administrative law in recent times. The basic purpose
of the emergence of this doctrine is to check the growing misuse of power by the administration authorities
and to provide relief to the victims of such exercise of power. The doctrine is based on the premise that the
power in the hands of administrative authorities is a public trust which must be exercised in the best interest
of the people. Therefore, the trustee(public servant) who enriches himself by corrupt means holds the
property acquired by him as a constructive trustee. The scope of this Doctrine was amplified in this of DDA
v. Skipper Construction Co. case where Court stated that wherever the general public is defrauded by illegal
acquire of properties, the Court can pass necessary orders irrespective of the fact that there was a fiduciary
relationship or not or whether a holder of public office was involved or not. The court further pronounced
that courts in India are not only courts of law but also courts of equity.