Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2016 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 1322 - PUNJAB AND HARYANA HIGH COURTExecution of a money decree obtained under Order 37 CPC - lifting the corporate veil - non-enforcement against the Director of the Company - decree enforced against the Managing Director - Held that:- 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. 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. 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 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 must, therefore, proceed forth without any further obstruction and the revision itself must be taken as incompetent. The executing court has found if the assets of the Company are not satisfied, the assets of the Managing Director could also be proceeded with.
|