SKIN friction is usually a downward shear drag acting on a pile or pile group because of downward movement of surrounding soil relative to the piles. This shear drag movements are ANTICIPATED to occur when a pile penetrates into compressible soil layer that can consolidate.Factors that cause negative skin friction on piles and pile group1. Newly placed fill material on compressible soil before the completion of consolidation.2. If fill material is loose cohesion-less soil.3. When fill material is deposited over layer of soft soil or PEAT.4. Lowering groundwater which increases the effective stress causing consolidation of soil with resultant settlement and friction force being developed on the pile.Effect of negative skin friction on piles and pile groupsNegative skin friction contributes to the uneven settlement of piles or pile group.For piles in compressible soils where pile capacity is contributed by both point resistance and shaft adhesion, the problem of negative skin friction should be considered a settlement problem.In bearing piles where the settlement of the pile is negligible, negative skin friction becomes a pile capacity problem.So here the FILLED up or peat soils are not fully consolidated but consolidation will start due to their own overburden pressure causing a drag on the pile as a result of which negative skin friction will occur.So both Statement (I) and Statement (II) are individually true and Statement (II) is the correct explanation of Statement (I).