TMI Blog2016 (6) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... m the measures taken by the respondent no.1 Bank under the SARFAESI Act had the remedy available of approaching the Debt Recovery Tribunal (DRT) under Section 17 of the SARFAESI Act and which the petitioner has again failed to do. It is a well settled principle that jurisdiction under Article 226 will not be exercised when an alternative efficacious remedy is available. Reference in the said regard can be made to the recent judgment of the Supreme Court in Joshi Technologies International Inc. Vs. Union of India (2015 (5) TMI 521 - SUPREME COURT ). Liberty is however given to the petitioner to, if is able to make out a case and if permitted in law, make a claim against the respondent no.1 Bank with respect to the sale proceeds of the aforesaid two properties. To the said extent, none of the observations contained in this order shall come in the way of the petitioner. - W.P.(C) No. 4970/2016 & CM No. 20687/2016 (for stay). - - - Dated:- 26-5-2016 - MR. RAJIV SAHAI ENDLAW J. For the Appellant: Mr. Pankaj Garg, Mr. Milind Garg and Mr. A.S.M. Tripathi, Advs. For the Respondents: Mr. Vaibhav Dang, Adv. for R-1 with Mr. Surender Singh, Law Officer. MR. RAJI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the petitioner against the respondents no.3 4 Companies and the petitioner could not assume that the three were the same. It was further noted that under Section 8F(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (PF Act) though the petitioner was authorised to recover its dues from third parties which owed the said dues to the entity owing PF to the petitioner but the same had also not been done and it had not been established that the respondents no.3 4 Companies owed any money to the respondent no.2 Company which was stated to be owing PF dues to the petitioner. 7. The petitioner preferred LPA No.23/2016 against the aforesaid judgment allowing the writ petition of the respondent no.1 Bank but which LPA was dismissed vide order dated 13th January, 2016 affirming the reasoning given by the learned Single Judge. 8. Taking a cue from the aforesaid reasoning, the Recovery Officer of the petitioner claims to have issued a notice dated 22nd March, 2016 to the respondent no.1 Bank and to the respondents no.2 to 9 to show cause why the corporate veil should not be lifted and to have vide a very well written and reasoned order dated 17th May, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment or, as the case may be, of the employer. The remaining provisions 8C to 8G are found to be procedural in nature. However, Section 8G makes applicable the provisions of the Second and Third Schedules of the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962 to the said proceedings. 12. The counsel for the petitioner has drawn attention to Clauses 82 and 83 of the Second Schedule of the Income Tax Act. Clause 82 provides that a Commissioner and the Tax Recovery Officer in the discharge of their functions under the Schedule shall be deemed to be acting judicially within the meaning of the Judicial Officers Protection Act, 1850 and Clause 83 provides that the said officers shall have the powers of a Civil Court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents. 13. The said provisions, in my view would not make the petitioner or its Recovery Officer a Court, as the counsel for the petitioner contends. All that the said provisions vest in the petitioner are certain powers of the Civil Court and which would not include the inherent adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of another company from its holding company was upheld; (f) K. Ramasamy Vs. Commissioner of Income Tax MANU/TN/2670/2002 where a Division Bench of the High Court of Madras held that income tax authorities are entitled to pierce the veil of corporate personality and look at the reality of transaction; (g) Bhaskar Tea Industries Ltd. Vs. Employees Regional Provident Fund Organization MANU/WB/0483/2014 also holding that in the matter of realisation of statutory dues, the authorities can always lift the corporate veil to find out the real persons who are responsible for payment of such statutory dues. 15. Though a reading of the aforesaid judgments would indicate that the petitioner / its RO is entitled and empowered to pierce the corporate veil but I may mention that the judgments of the Supreme Court aforenoted are with respect to the clubbing of employees for the purpose of application of the beneficial legislations, provisions whereof are applicable only upon a certain minimum number of employees being employed therein and in the context of the definition and meaning of establishment and employer in the said statutes and the said judgments may not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es into a Civil Court to adjudicate disputed question of facts of lifting of corporate veil for recovery of dues of one company from another. I am further of the view that even where the statute does not provide for lifting of corporate veil, it can still be lifted under the common law if public interest so demands. However such lifting of corporate veil under the common law cannot be by the authorities under the statute and can be only by the Courts. To me it prima facie appears that the petitioner, if desirous of lifting corporate veil, will have to approach the Civil Court. The Bombay High Court in Oil and Natural Gas Corporation Ltd. Vs. Jindal Drilling and Industries Limited MANU/MH/0735/2015 and in Wind World (India) Limited Vs. Enercon GmbH MANU/MH/0411/2016 has held that Arbitral Tribunal has no power to lift the corporate veil and only a Court can lift a corporate veil of the company. The reason therefor, in my view is quiet obvious. In the absence of a statute permitting lifting of corporate veil and in which case lifting of veil will be for reasons given in the statute, corporate veil under common law is lifted to prevent fraud and finding in which respect can be ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
