TMI Blog2017 (8) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment-debtor and not assets of any other person. Though Order XXI Rule 41(1) also permits the Court to examine any other person but the words any other person are absent from sub-Rule (2) of Rule 41 which permits a direction only against the judgment-debtor where the judgment-debtor is a corporation, against any officer thereof and disclosure as aforesaid, of assets of the judgment debtor only and not of personal assets of such officer - Once the directors of a company are not judgment-debtor in a decree against a company, there can be no direction to them to disclose their assets. The direction contained in the impugned order dated 23rd February, 2017 directing the petitioners to on affidavit disclose their personal movable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petition was entertained and vide ad-interim order dated 19th May, 2017, the direction for issuance of bailable warrants was ordered to be kept in abeyance. 3. The counsel for the respondent no.1 appears. 4. I have already in order dated 19th July, 2017 in CM(M) No.731/2017 titled Ashu Sharma Vs. Framework Interiors dealt with the identical order of the same learned ADJ and allowed the petition. 5. In the present case, the respondent no.1 is the holder of a decree against the respondent no.2 for recovery of ₹ 30,66,740/- with interest and for mandatory injunction directing the respondent no.2 judgment-debtor to furnish TDS certificates and to pay arrears of electricity and maintenance charges. 6. In execution filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties of anyone other than the judgment-debtor company; (v) that the identity of a director or a shareholder of a company is distinct from that of the company-that is the very genesis of a company or a corporate identity or a juristic person;(vi) the classic exposition of law in this regard is contained in Solomon Vs. Solomon Co. Ltd. 1897 AC 22 where the House of Lords held that in law, a company is a person all together different from its shareholders and directors and the shareholders and Directors of the company are not liable for the debts of the company except to the extent permissible; (vii) that though a Single Judge of this Court in Jawahar Lal Nehru Hockey Tournament Vs. Radiant Sports Management 149(2008) DLT 749 observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not parties to the proceedings in which decree was passed and were not impleaded in the execution petition also and there were no averments in the execution petition of fraud or improper conduct or of incorporation of the company to evade obligations imposed by law and in which situations Supreme Court in Singer India Ltd. supra has held that the corporate veil must be disregarded. 10. Applying the aforesaid principles, the decree in favour of the respondent No.1 and against the respondent No.2 for recovery of money cannot be executed against the petitioners for the reason of the petitioners being directors of the respondent No.2 11. The High Court of Madhya Pradesh in Vimalchand Vs. Arora Distillery Pvt. Ltd. Co., Vidisha 2009 (3) MP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the judgment debtor company are required to furnish details of their personal properties. The direction to the Directors, in Bhandari Engineers Builders Pvt. Ltd. supra, was on account of the business relationship as found therein. There is no such finding in the present case. 15. Once the decree against the respondent No.2 cannot be executed against the petitioners as its directors, the next question is whether under Order XXI Rule 41 of the CPC, a direction to the directors to disclose their personal movable and immovable assets can be issued. 16. Order 21 titled Execution of Decrees and Orders , in Rule 41 thereof provides as under: 41. Examination of judgment debtor as to his property.- (1) Where a decree is for the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not assets of any other person. Though Order XXI Rule 41(1) also permits the Court to examine any other person but the words any other person are absent from sub-Rule (2) of Rule 41 which permits a direction only against the judgment-debtor where the judgment-debtor is a corporation, against any officer thereof and disclosure as aforesaid, of assets of the judgment debtor only and not of personal assets of such officer. 18. Once the directors of a company are not judgment-debtor in a decree against a company, there can be no direction to them to disclose their assets. Mr. Justice Chagla of the Bombay High Court, in Bachubai Manjrekar Vs. Raghunath Ghanshyam Manjrekar ILR 1942 Bombay 128 held that except in very exceptional circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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