LexDELHI DEVELOPMENT AUTHORITY versus SKIPPER CONSTRUCTLON CO. (P) LTD. AND ORS.
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A DELHI DEVELOPMENT AUTHORITY v. SKIPPER CONSTRUCTlON CO. (P) LTD. AND ORS. DECEMBER 17, 1999 B [M. JAGANNADHA RAO AND U.C. BANERJEE, JJ.] Transfer of Property Act, 1882 : Section 55(6) (b)-Purchasers under agreement in respect of immovable C property-whether they have statutory charge against interest of vendor in property-Absence of contract to contrary and purchaser not declining to accept delivery-Held, purchaser will have statutory charge insofar as purchase money and interest on such amount are concerned-Charge available against vendor and all persons claiming under him-Property upon which charge created converted into another form-Effect of-Held, D charge will fasten against substituted security-Period of limitation for enforcing statutory charge-Held, twelve years from date when money becomes due-Limitation Act, 1963-Article 62. Interest-Term in agreement that builder not liable for in!~rest if transaction fails-Finding of fraud against builder-Whether builder can E invoke the term to deny payment of interest-Held, builder cannot rely upon term and escape payment of interest-Once there is fraud, inducement for payment cannot be traced to agreement. F Appellant S purchased land from Delhi Development Authority (D.D.A.) in auction, and default in making balance payment resulted in litigation between them. S was allowed to raise constructions over the land subject to certain conditions imposed by the court. S sold space in proposed building to buyers in excess of units available despite order dated 29.1.1991 expressly prohibiting creation of rights of third parties in the building. When S failed to deposit amount in court, DDA re-entered plot and took physical possession G alongwith building thereon and sold it for Rs. 70 crores with permission of the court. Thereafter, this court directed D.D.A. to deposit Rs. 16.75 crores and distributed it alongwith some other amount between pre and post 29.1.1991 buyers towards their principal amount deposited with S. This court vide judgement dated 6.5.1996 held that pre 29.1.1991 and post 29.1.1991 purchasers had to be reimbursed in full including interest at appropriate H rate. 512 .. .. . ' D.D.A. v. SKIPPER CONSTRUCTION CO. (P) LTD. 513 This judgement deals with claims of persons filed after delivery of A '> judgement dated 6.5.1996 and issues remaining undecided or not decided fmally in earlier orders of this court including whether D.D.A. should deposit amount in excess of Rs. 16. 75 crores in respect of disputed structure. D.D.A. contended that the issue had become final by judgement dated B 6.5.1996 and could not be re-opened. S contended that interest was not payable to buyer in case transaction failed in view of stipulation to that effect in sale agreement. Amicus Curiae contended that S could not rely on said clause in view of earlier finding relating to fraud against S by this Court. Disposing of the matter, the Court c HELD : 1.1. It is plain from the provisions in sub-clause 6 of Section 55 of the Transfer of Property Act that, in the absence of a contract to the contrary, the buyer will have a charge on the seller's interest in the property which is the subject matter of the sale agreement insofar as the purchase money and interest on such amount are concerned, unless the buyer has D improperly declined to accept delivery. The charge is available against the seller and all persons claiming under him. This charge in favour of the buyer is the converse of the seller's charge under Section 55 (4) (b). The buyer's charge under this Section is a statutory charge and differs from a contractual charge which a buyer may be entitled to claim under a separate E Contract. No charge is available unless the agreement is genuine. - [523-A, BJ Chettiar Firm v. Chettiar, AIR [1941] P.C. 47 and T.N. Hardas v. Babula/, AIR [1973) SC 1363, relied on. Mu/la's Commentary on Transfer of Property Act, 8th Ed. Page 411, F referred to • ... 1.2. When the property upon the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security. This is a general principle of law and the same principle applies G to cases of statutory charge under Section 55(6) (b). If immovable property is charged and is converted into another property or money, then the charge will fasten on the property or money into which the subject matter of the agreement is converted.
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