TMI Blog1993 (4) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... ributor in India with the right and licence to market and service the products of the third respondent. It is also claimed that they entered into a joint venture agreement dated June 10, 1986, for establishing a company in India with 40 per cent. equity participation by the third respondent or its nominee and 60 per cent. by the second petitioner or its nominee to manufacture, market and service NCR products. The petitioners allege that pursuant to the joint venture agreement they bought three acres of land, situate in the electronic city, developed by Electronic Development Corporation at Bangalore, for a sum of Rs. 5,10,100. According to the petitioners necessary application was made to respondent No. 1 for seeking approval for the joint venture. Besides, an application to the Government of India is also said to have been made for grant of industrial licence. It is further averred that the petitioners on June 19, 1987, and June 26, 1987, got the approval for foreign collaboration and industrial licence for the joint venture respectively from the Government of India. It is the case of the petitioners that they had also expended large sums of money to achieve the purpose of the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through their subsidiary for providing sales, marketing and servicing of their products in India in violation of the court's order in the aforesaid civil suit. Through the medium of this writ petition, the petitioner seeks a direction for restraining the first respondent, i.e., respondent No. 1, ( i ) Secretary, Department of Electronics, ( ii ) Secretary, Ministry of Commerce, Udyog Bhavan, New Delhi, ( iii ) Secretary, Ministry of Finance, New Delhi, and ( iv ) Secretary, Ministry of Industry, New Delhi, from granting the application of the third respondent for setting up a unit under the EHTP Scheme or putting up the unit through an Indian company to be set up by it. In the application for interim relief, the petitioners prayed for the same relief by way of interim measure as is being sought in the main writ petition. In a short affidavit filed by the first respondent it is averred that the third respondent had applied under the EHTP Scheme on November 23, 1992, for setting up of its unit for undertaking software development systems, engineering services and technical services including systems installation and maintenance, both hardware and software development and trainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g an efficient electronic component industry in the country. This scheme, which has been christened as Electronic Hardware Technology Park (EHTP) Scheme, permits foreign equity up to 100 per cent. in the case of EHTP units. Pursuant to this scheme, the third respondent filed an application for setting up of its subsidiary for manufacture of its products in India. A perusal of the application of the third respondent shows that the third respondent will be owning the entire equity of the proposed Indian subsidiary. No element of joint venture is involved in setting up of the subsidiary company as it is the third respondent alone who would be bringing into existence the Indian company. For the purpose of setting up of the unit, the third respondent will make an investment of US 15 million dollars over a period of five years. By no stretch of imagination, can the setting up of the subsidiary company by the third respondent be construed as a joint venture. Joint venture would come into existence when the resources of two different persons or entities are pooled together. In the instant case, none other than the third respondent is setting up the Indian company in accordance with the req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be achieved, the impugned conduct, the involvement of the element of the public interest and the effect on the parties who may be affected. After referring to several English and Indian cases, this court observed that ever since A. Salomon and Co. Ltd.'s case [1897] AC 22 (HL), a company has a legal independent existence distinct from its individual members. It has since been held that the corporate veil may be lifted and the corporate personality may be looked into. Reference was made to Pennington and Palmer's Company Law. It is high time to reiterate that, in the expanding horizon of modern jurisprudence, the lifting of the corporate veil is permissible. Its frontiers are unlimited. It must, however, depend primarily on the realities of the situation. The aim of the legislation is to do justice to all the parties. The horizon of the doctrine of lifting of the corporate veil is expanding. Here, indubitably, we are of the opinion that it is correct that Renusagar was brought into existence by Hindalco in order to fulfil the condition of industrial licence of Hindalco through production of aluminium. It is also manifest from the facts that the model of the setting up of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
