TMI Blog2009 (1) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant No.2 for deletion of his name. 2. The plaintiff has filed the suit for recovery of ₹ 75,20,000/- by way of compensation against the Defendants claiming the joint and several liability of the Defendants. The Defendant No.1 is a company incorporated under the Companies Act, 1956 and Defendants No.2 and 3 are the promoters/directors of the Defendant company who are alleged to be liable for their fraudulent acts of using the corporate personality as a cloak to defraud the functioning of the company and thereby diverting the funds of the Defendant company to their own personal advantages or building projects in their individual names. In the suit, the allegation relating to fraud and misrepresentation are specifically av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 30 months refused to audience to the plaintiff. It was alleged that the withdrawals made by Defendant No.2 were used for setting up of a shopping mall by trade name of One Style Mile and restaurant Olive Bar and Restaurant in a old haveli near Qutub, New Delhi. 6. In the reply filed by the Defendant No.3, it is denied that he has diverted any funds of the Defendant from the Defendant company for his personal use or committed any fraud. The Defendant No.3 also denied existence of any veil which is required to be lifted. 7. In the reply filed by Defendant No.2 it is submitted that since the Defendant No.2 has ceased to be the director of the Defendant No.1 company since 1st January, 2000, there was no privity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... author has said that there is no consistent principle beyond refusal by the legislature and the judiciary to apply the logic of the principle laid down in Solomon's case where it is too flagrantly opposed to justice, convenience or the interest of the Revenue. In the cases where veil is lifted, the law either goes behind the corporate personality to the individual members, or ignores the separate personality of each company in favour of the economic entity constituted by a group of associated companies. The principal grounds where such a course of action can be adopted are to protect the interest of the Revenue and also where the corporate personality is being blatantly used as a cloak for fraud or improper conduct. Fraud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of law should not be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation. It is also no more res integra that pre-trial amendments are allowed more liberally than those which are sought to be made after the commencement of trial or after conclusion thereof. Mere delay usually cannot be a ground for refusing a prayer for amendment because merits of amendment sought to be incorporated by way of amendments are not be judged at the stage of allowing prayer for amendment. The Apex Court in G. Nagamma v. Siromanamma, (1996) 2 SCC 25, at page 26 had held that it is settled law that the plaintiff is entitled to plead even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate veil. CS (OS) No.195/2007 16. The suit was listed before the Joint Registrar on 01.10.2008 when it was reported that the Defendant No.1 has been served on 11.08.2008 by the publication in the newspaper 'The Statesman' Delhi edition but no one appeared on behalf of the Defendant No.1 before the Joint Registrar on the said date and even before the Court on 09.01.2009 when the two applications under Order 6 Rule 17 CPC filed by the plaintiff were considered. The Defendant No.1 is accordingly proceeded ex parte. 17. The matter be listed before Joint Registrar on 24th February, 2009 for completion of the pleadings and pending application. I.A. No.10454 /2007 (U/o X Rule 1 CPC r/w 151 CPC (By Defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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