DELHI DEVELOPMENT AUTHORITY versus SKIPPER CONSTRUCTLON CO. (P) LTD. AND ORS.

DELHI DEVELOPMENT AUTHORITY versus SKIPPER CONSTRUCTLON CO. (P) LTD. AND ORS.

Purchasers under genuine agreements possess a statutory charge under Section 55(6)(b) for purchase money and interest, enforceable against the vendor and those claiming under him, including substituted security. The period of limitation for enforcing such charge is twelve years from the date the money becomes due. Where the vendor has committed fraud, he cannot rely on contractual clauses to deny payment of interest to the purchasers. Both pre and post 29.1.1991 buyers are entitled to reimbursement in full, including appropriate interest.

Parties
Appellant: Delhi Development Authority; Respondents: Skipper Construction Co. (P) Ltd. and Ors.
Jurisdiction
India
Judgment Date
17 December 1999
Procedural Posture
Special Leave Petition (civil) / Disposal After Hearing Arguments and Deciding Remaining Legal Issues
Outcome
Petition disposed of.
Legal Topics
Statutory Charge of Purchaser, Interest on Refund of Purchase Money, Fraud and Contractual Rights, Limitation for Enforcement of Charge, Doctrine of Lifting Corporate Veil
Property Law Contract Law Statutory Charge of Purchaser Interest on Refund of Purchase Money Fraud and Contractual Rights Limitation for Enforcement of Charge Doctrine of Lifting Corporate Veil

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Parties

Delhi Development Authority

Appellant

Skipper Construction Co. (P) Ltd. and Ors.

Respondents

Procedural Posture

Special Leave Petition (civil) / Disposal After Hearing Arguments and Deciding Remaining Legal Issues

Legal Issues

  1. 1 Whether purchasers under agreements in respect of immovable property have a statutory charge under Section 55(6)(b) of the Transfer of Property Act, 1882 against the vendor's interest in the property
  2. 2 Whether such statutory charge can be enforced on substituted security if the original property is converted
  3. 3 Whether purchasers are entitled to interest on refunded purchase money

Ratio Decidendi

Purchasers under genuine agreements possess a statutory charge under Section 55(6)(b) for purchase money and interest, enforceable against the vendor and those claiming under him, including substituted security. The period of limitation for enforcing such charge is twelve years from the date the money becomes due. Where the vendor has committed fraud, he cannot rely on contractual clauses to deny payment of interest to the purchasers. Both pre and post 29.1.1991 buyers are entitled to reimbursement in full, including appropriate interest.

Court Disposition

Petition disposed of.

Orders

  • Purchasers under agreement with Skipper Construction Co. (P) Ltd. have a statutory charge under Section 55(6)(b) of the Transfer of Property Act, 1882 for the purchase money paid and interest thereon, enforceable against vendor and those claiming under him, including substituted security.
  • Such purchasers are entitled to interest from date of payment until delivery or execution of sale deed, whichever is earlier.