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Violation of clause 8 of the license deed by the petitioner/appellant. Analysis: The case involved an appeal against the dismissal of a writ petition by a learned Single Judge. The petitioner was allotted a shop in 1975 by the Union of India, subject to the conditions of the license deed, including clause 8 which prohibited the use of the premises by any other person without prior consent. The petitioner incorporated a company in 1976, holding a majority share, and continued to operate the business from the shop. The respondent alleged a violation of terms in 1987, leading to eviction proceedings. The Estate Officer ordered eviction in 1990, upheld by the learned ADJ in 1992. The key contention was whether the incorporation of a company by the petitioner, while maintaining majority ownership, constituted a violation of clause 8. The appellate authority and the Single Judge upheld the eviction, considering the company as a separate legal entity. However, the High Court applied the principle of 'piercing the veil of corporate personality' to determine that the petitioner had not violated the clause. The Court cited various precedents supporting this principle, emphasizing the need to recognize the reality of the situation in cases where a business expands and changes its legal form. The Court disagreed with the Single Judge's view, highlighting the common practice of converting businesses into different legal entities as they expand. It noted that in such cases, the principle of piercing the corporate veil should be applied to acknowledge the continuity of ownership and control, rather than as a means to prevent wrongdoing. Referring to relevant provisions in the Companies Act and legal precedents, the Court concluded that the petitioner's actions did not breach clause 8, allowing the appeal and directing the respondents not to dispossess the petitioner from the premises. In summary, the judgment focused on the interpretation of clause 8 in light of the petitioner's incorporation of a company to run the business from the allotted shop. By applying the principle of piercing the corporate veil, the High Court concluded that the petitioner had not violated the terms of the license deed and overturned the previous decisions, allowing the writ petition and directing against eviction.
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