Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 2005 (9) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (9) TMI 305 - SUPREME COURTWhether the Directors of a private limited company had personal liability to meet the demand of contribution arising under the Employees’ State Insurance Act, 1948? Held that:- The appeals filed by the Directors are allowed and the appeals filed by the functionaries under the Act and the State are dismissed. As the High Court has proceeded to hold the Directors liable by introducing the expression "occupier", which expression is used in the Factories Act and not in the Act, the basic premises on which the High Court proceeded are clearly untenable. Therefore, on a plain reading of the language of the governing statute, it cannot be held that the Directors had any personal liability. The judgments of the High Court are therefore not sustainable and are set aside. In view of the aforesaid conclusion, the appeals filed by the functionaries under the Act lack merits. However, it shall be in the interest of employees if the properties of the Company which are stated to be under the control of Official Liquidator are disposed of early so that the employees can be paid whatever is legally payable to them. Similarly the other creditors can be paid and the liability can be discharged.
|