TMI Blog2016 (1) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor, the person that could be aggrieved can be the Managing Director and not the company. Significantly, the Managing Director himself had not preferred the revision petition. The company cannot be said to be aggrieved against the decision rendered against the Managing Director. The revision is by a person who cannot even be treated as a aggrieved person. If the counsel were to contend that the liability of the company and of the Managing Director are not to be mixed up, the petitioner's logic must be extended to apply to a situation that a direction against the Director ought not to be taken as a direction against the company also. The petitioner shall hang by his own petard on the arguments propounded before me. The token of logic if the company must be treated as aggrieved, it can be only in a situation when the line drawn between the Company and the Director itself is an effaced. If the petitioner is literally pleading the brief for the Managing Director, it vindicates the contention of the decree-holder that there exists no difference between the two and the petitioner company was not different from the Managing Director of the company itself. The enforcement of the decree mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit. The petitioner had stated, while seeking for attachment of the property of the Managing Director of the company that the company was a closely-held company with two directors, namely, the Managing Director Mr. Neeraj Bhardwaj and his wife being Director and holding 50% share each. The petitioner had founded the justification for proceeding against the assets of the director on a plea that the director had committed fraud by running away from execution process by filing an appeal and not complying with the condition for stay and similarly filing an appeal against the company court judgment and not complying with directions for making the payment, as directed to be done when the company court had admitted the winding up petition. 3. Since the execution process was sought against the personal assets of the director of the company, the objection was taken predictably on the ground that there was no decree personally against the director and hence he would not be personally liable. His own personal property could not be, therefore, proceeded against. It was the further objection that the execution petition itself was barred by limitation, for, after decree was passed on 30.08.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissal at the High court or the Supreme Court by dismissal in limine at the stage on moving an SLP cannot be treated as creating merger of the lower court judgment to the Appellate Court judgments. Consequently, if the decree dated 30.08.1990 had been appealed against to the District court and the latter dismissed it otherwise than on merits on the issue of delay in filing the appeal, the Appellate Court judgment cannot constitute a merger of the trial Court judgment and the petition filed beyond a period of 12 years is barred. The learned Senior counsel is fair to point out to me of yet another judgment which took a different view in Shyam Sundar Sarma versus Pannalal Jaiswal and others JT 2004 (9) SC 436 a judgment of a three member Bench that dealt with the same issue of whether an appeal disposed of otherwise done on merit on a preliminary point would constitute a merger, when it held that Rattan Singh's case (supra) was not correctly decided. Chandi Prasad's case (supra) which was again a three-member Bench decision was not brought before the judgment in Shyam Sundar's case (supra) although delivered a month later but the three-member Bench made reference to a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nflict with the propositions of either case. Shyam Sunder Sarma's case makes reference to Sheodan Singh's case (a 4 member Bench), although rendered in a different context to use that for deciding on the nature of a decree passed by a Appellate Court, even if it was otherwise than on merits. I will hold that the subordinate court will be bound by a three members bench of Shyam Sunder Sarma's case that has taken note of a 4 member Bench in Sheodan Singh's case to make for an interpretation in an identical situation for invoking Article 136 of the Limitation Act to hold that if an appeal had been preferred in a higher court against the 1st decree, the 2nd decree, even if disposed of otherwise than on merits will be considered as the starting point of limitation. Under the circumstances, the execution petition filed within 12 years period, when the appeal was disposed of, although otherwise than on merit, on 27.1.1997 must be taken to be within time. 10. The issue of competency of the decree-holder to proceed against the assets of the Managing Director could be taken only if it is a circumstance when it is possible to tear the corporate veil. There is no difficulty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the scope for lifting the veil will be available even at the execution stage, if a fraud was being committed to defeat the process of court and for realization of the decree, in case of a closely held company. We have already observed that the judgment debtor company in which the Managing Director and his wife are the only share holders, who hold 50% shares each and there was no other share holder. It is obvious that the Managing Director was trying to literally use the cloak of corporate entity for securing only immunity against enforcement of any liability contracted by the company. I, therefore, discard the argument placed by the learned Senior Counsel appearing on behalf of the petitioner that the decree cannot be enforced against the Managing Director. 12. There is yet another strong reason why the petitioner ought not to be permitted to bring the argument of non-enforcement against the Director of the Company. If the decree-holder was seeking for enforcement of the decree against the assets of the Managing Director, the person that could be aggrieved can be the Managing Director and not the company. Significantly, the Managing Director himself had not preferred the revis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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