VERY IMPORTANT POINTS
1. While acting under Article 142 of the Constitution, the Supreme Court must do complete justice between the parties and for that purpose, it is necessary to ensure that a person who has defrauded a large number of persons by issuing advertisements in the leading newspapers inviting people to come and purchase space in the said building in open and brazen violation of clear and specific orders of this Court should not be allowed to benefit from his fraud and/or contemptuous acts.
2. The contemnors should not be allowed to enjoy or retain the fruits of their contempt.
3. In India the courts are not only courts of law but also courts of equity.
4. Where the corporate character is employed for the purpose of committing illegality or for defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned.

Headnote:
(i) Constitution of India-Articles 129 and 142-Contempt jurisdiction-Court s power under Article 142-Scope and width-Article 142 being a constitutional power it cannot be limited or conditioned by any statutory provision-Power is meant to supplement existing legal framework and not to supplant it-Object of doing complete justice between parties.
Held : 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 so that it remains elastic enough to be moulded to suit the given situation. The very fact that this power is conferred only upon this Court, and on no 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. (Para 16)
(ii) Contempt Jurisdiction-Contemnor should not be allowed to enjoy or retain the fruits of his contempt-A person who has defrauded a large number of persons by issuing advertisements in leading newspapers inviting people to come and purchase space in violation of orders of this Court-Should not be allowed to benefit from his fraud and/or contemptuous acts. (Paras 35)
(iii) Constitution of India-Articles 129 & 142-Contempt jurisdiction-Auction-Skipper Company offered highest bid in a sum of Rs. 9.82 crores-25 of the amount deposited immediately-Default in depositing balance amount-Proceedings for cancellation of bid-Revised agreement-Non-compliance-Court proceedings-Skipper failed to deposit amount as per direction of High Court-SLP-On January 29, 1991, this Court granted interim order subject to Skipper depositing an amount-Skipper was prohibited from inducting any person in the building and from creating any rights in favour of third parties-Skipper issued advertisements in newspapers inviting persons to purchase space in proposed building-It obtained interim orders staying re-auction of plot-Suo motu contempt proceedings against Skipper-Order of imprisonment with fine-Directions made regarding persons who have been defrauded by Skipper-Distinction made between persons who purchased space before 29.1.1991 and those who purchased space thereafter.
Held : That while acting under Article 142 of the Constitution, this Court must do complete justice between the parties and for that purpose, it is necessary to ensure that a person who has defrauded a large number of persons by issuing advertisements in the leading newspapers published from the capital inviting people to come and purchase space in the said building in open and brazen violation of clear and specific orders of this Court should not be allowed to benefit from his fraud and/or contemptuous acts. (Para 35)
Accordingly, it is directed that :
(1) the property at No.3, Aurangzeb Road, New Delhi, shall be attached, if not already attached - and if it has already been attached, it shall continue to be under attachment;
(2) the Embassy of Israel in India, New Delhi, the lessee of the said property, is requested to deposit the monthly rent payable in respect of the said building in this Court with effect from the date of receipt of a copy of this order and continue to deposit the same until further orders. Such deposit in Court shall discharge the Embassy of its obligation to pay rent to "Maple Leaf , its landlord.
(3) Tejwant Singh and his wife, Surinder Kaur, are directed to deposit in this Court a sum of Rupees ten crores within two months from today. In default, steps will be taken to sell the property at No. 3, Aurangzeb Road, New Delhi by inviting tenders from the public. The said amount of Rupees ten crores is tentatively arrived at as the amount required to reim- burse the pre-January 29, 1991 purchasers in full, as explained hereinabove, and also to reimburse the post-January 29, 1991 purchasers in full. (This shall not be treated as the final figure required in this behalf.) While fixing this amount, we have taken into account the fact that about Rupees six crores is now available with this Court as stated supra;
(4) the attachment of properties belonging to Tejwant Singh, 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. shall continue to be in force pending further orders. It is, however, open to any of them to come forward with a proposal to sell any of those properties and if this Court is satisfied about the bonafides of the deal, the attachment will be lifted on condition that the consideration so received is deposited into this Court. It is obvious that any such deposit will be treated as a deposit towards the direction regarding deposit of Rupees ten crores contained in Direction No.3 above;
(5) since it is necessary to ascertain the persons who have paid amounts to Skipper after January 29, 1991 for purchasing the space in the said building, and to exclude the claims of non-genuine persons, we appoint Sri. O. Chinnappa Reddy, a former Judge of this Court, as the one-man Commission to ascertain the number and identity of the persons who have purchased the space in the building being raised by Skipper after January 29, 1991 and also to determine the amounts paid by each of them. (Para 36)
(iv) Interim Orders-Before making the order, Court must be satisfied that it is a case which calls for such an order.
Held : Some of the courts have been granting interim orders - injunctions and stay orders without realising the harm such mechanical orders cause to the other side and in some cases to public interest. It is no answer to say that "let us make the order and if the other side is aggrieved, let it come and apply for vacating it". With respect, this is not a correct attitude. Before making the order, the court must be satisfied that it is a case which calls for such an order. This obligation cannot be jettisoned and the onus placed upon the respondents/defendants to apply for vacating it. (Para 39)
(v) Vicarious Liability-Delhi Development Authority-Where acts and deeds of officials are not only beyond their authority but are done with a malafide intent-It may not be just and fair to bind D.D.A. with such malafide acts and deeds. (Para 33)
(vi) Company Law-Corporate veil-Where corporate character is employed for purpose of committing illegality or for defrauding others-Court would ignore corporate character and will look at reality behind corporate veil to pass appropriate orders to do justice between parties. (Para 28)

ORDER

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 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 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 Court and on May 29, 1982 obtained stay of cancellation. D.D.A. applied for vacating the stay. Nothing happened but usual adjournments. 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 to D.D.A.) The committee recommended 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 agreement, Skipper appears to have been selling the place in the proposed building to various persons and receiving monies. Once it 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 installment under the revised agreement in time but only after some delay. It did not pay the second installment. Bank guarantees furnished by it in terms of revised agreement were also found to be defective. Every time the D.D.A. thought of cancelling the agreement on account of the said defaults, an argument was put forward that it would cause great hardship to hundreds of persons who have purchased space in the proposed building and that they would be deprived of their hard-earned monies. Skipper has been making some small token payments from time to 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 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 installments 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 and 6339 of 1990. Meanwhile, W

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1996 Supreme(SC) 910

Cases Referred (6)