TMI Blog1997 (11) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. It is again admitted that recovery proceedings have already been initiated against the property/assets of the Company namely, M/s Kavita Steels Private Limited. The learned judgment prepared by my esteemed brother Hon'ble M. L. Singhal, J. has to be respectfully concurred with but some reasons of this Court have to be specifically mentioned. ( 3. ) Under the Indian Companies Act a Company is an independent legal entity and can enter into transactions independently of the Directors. While it is true that the decisions regulating the working of the company may be taken by the Directors but as the law stands today the liability or responsibility of a contract entered into by the company shall have to be honoured and borne by the company itself. In this connection it has to be mentioned that while there cannot be any doubt that the Director of a company may be an agent of the company the Director's asset will not automatically become assets of the company unless provisions are made to exist in the Act to that effect. It is true that the word consumer would include its executors and successors etc. there is no provision in the Company's Act which will make it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, Provident Fund Act, Industrial Disputes Act etc. etc. There is no provision in the U. P. Government Electricity Undertaking (Dues Recovery), Act, 1958 or Electric Supply (Consumers) Regulations, 1984 or even in the Indian Electricity Act, 1910 which may make it possible to read that a DIRECTOR can be taken to be the successor of the Company which had entered into the agreement with the Board as a Consumer taking note of the definition of the word 'consumer' in any of the three laws referred to above. This Court is not happy that a Director's individual property/assets may not be proceeded with in these recovery proceedings because there are serious allegations of dissipation of the property and assets of the Company by the Directors and it is only the absence of specific provisions in that regard which was rightly highlighted by Shri Ravi Kiran Jain on behalf of the petitioners that the recovery proceedings against the Directors have to be quashed. It is for these reasons and the other reasons so effectively delineated by my esteemed brother in his Judgment that the writ petition of Adesh Kumar Jain and Naresh Kumar that the writ petition of Adesh Kumar Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further averments in the two writ petitions are that under U. P. Government Electricity Undertaking (Dues Recovery) Act, 1958, the respondents No. 1 and 2 issued a recovery under Section 3 of the Act for a sum of ₹ 86,72,177. 66 against the ex-Director Shri Ishwar Chand Agarwal on 13th June, 1996. By that time, as shown above, Ishwar Chand Agarwal had ceased to be the Director of the Company. An objection was preferred against the said recovery stating that Shri Ishwar Chand Agarwal had no connection whatsoever with the Company and so the recovery issued against him was illegal and without jurisdiction. Nothing was heard from the respondents on the objection preferred on behalf of Shri Ishwar Chand Agarwal and respondents have issued a citation, for a sum of ₹ 77,50,122. 80 against the Company and in pursuance thereof the property with land building etc. on the spot have been attached. The proceedings for recovery of the amount against the Company are going on, the petitioners absolutely have no objection thereto. The alleged recovery of ₹ 77,50,122. 80 does not represent the correct state of affairs, a sum of ₹ 23 lacs of security amount, apart from interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to clear the outstanding dues, the respondent are within their rights and are validly proceeding personally against the Directors of the Company for the recovery of the amount. As seen above, it is conceded to the respondents that they are proceeding against the Directors of the Company. They have no intention to proceed against the past Director but the electricity dues are recoverable from the personal assets of the Directors of the Company. A moot point for adjudication in the two instant two writ petitions is whether the amount of electricity dues, due from the consumer M/s. Kavita Steel Pvt. Ltd. Meerut can be recovered only from the Company as contended by the petitioners or can be recovered from the personal assets of and personally from the Directors of the Company also as contended by the respondents. Undisputedly, the two agreements on 13-12-88 (vide Annexure-7) and another agreement on 27-10-89 (vide An-nexure 8) were executed between M/s. Kavita Steels Pvt. Ltd. Company and respondents U. P. Electricity Board. A perusal of the two agreements as contended by the learned Counsel for the respondents shows that these two agreements had been entered into between M/s. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be stated that the expressions cannot be expanded to include the Director. In Section 2 (c) of the Indian Succession Act, 1925, the word 'executor' means a person to whom the execution of the last will of the deceased person is, by estator's appointment confided . The expression 'administrator' in Section 2 (a) of the said Act means a person appointed by the competent authority to administer the estate of the deceased person when there is no executor . The Director of a Company is an agent of the Company, he cannot also be described as legal representative or successor of the petitioner Company. Thus, the Director of a Company cannot be equated with an administrator, executor, legal representative or a successor of the Company. The contention of the learned Counsel for the respondents is absolutely devoid of merit. ( 10. ) Under Clause 7 (a) of the two agreements (Annexures-7 and 8), the consumer shall pay for the supply of electric energy at the rates enforced by the supplier from time to time as may be applicable to the consumer. In Section 2 (c) of the Indian Electricity Act, 1910, the definition of 'consumer' is as under: (C ). consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only the public at large but also statutory authority causing loss to the Public revenue and as such they are personally liable to pay the electricity dues. The learned Counsel relied upon the decision of the Hon'ble Supreme Court in New Horizons Limited and another v. Union of India and others, 1995 (1) SCC 478 (pg. 27 to 37) and State of U. P. and others v. Renusagar Power Co. and others, AIR 1988 SC1737 (pg. 50 to 63) where the principle of 'lifting the Veil' was applied by the Hon'ble Supreme Court. The facts of those cases were different. In the instant case, there is an agreement between the parties and also the statutory provisions under which the only consumer company is liable for payment of the arrears of electricity dues and the Director of the Company cannot be made personally liable. Hence the doctrine of lifting the Veil cannot be invoked in the instant case. Further the learned Counsel for the respondent relied upon the decision of the Hon'ble Supreme Court in Natwar Textile Processors Pvt. Ltd. and another v. Union of India and others, 1995 (2) JT 31 (para 14); U. P. Financial Corporation v. M/s. Gem Cap (India) Pvt. Ltd. and others, JT 1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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