2002 (3) TMI 915 - HC - Indian Laws

Summary

Issues:
1. Whether the appellant's name can be included in the certificate proceeding for corporate liability.
2. Whether the appellant should exhaust the statutory remedy of revision under section 62 of the Bihar Public Demands Recovery Act before filing a writ petition.
3. Whether the liability of the company can be enforced against its officers, including the Director or Managing Director.

Detailed Analysis:
1. The appellant argued that his inclusion in the certificate proceeding for corporate liability was unwarranted and illegal. The Certificate Officer initially deleted the appellant's name from the proceedings, but the Board later sought to include it again. The appellant contended that he cannot be held personally liable for the company's dues. Legal precedents were cited to support the argument that individual officers of a company cannot be held liable for corporate debts. The High Court agreed with the appellant's submissions, stating that the liability of the company cannot be enforced against its officers. The Court referenced previous judgments to emphasize that debts of an incorporated company can only be realized by seizing the company's assets, not by holding individuals personally liable.

2. The Electricity Board argued that the appellant should exhaust the statutory remedy of revision under section 62 of the Act before approaching the High Court with a writ petition. However, the appellant contended that forcing him to deposit a significant amount for revision when he is not personally liable for the dues would be unjust. The High Court acknowledged that the existence of an alternative remedy does not always bar the High Court from entertaining a writ petition under Article 226 of the Constitution. The Court cited a case where the deposit requirement for revision was not considered onerous, but in this case, asking the appellant to deposit a substantial sum when he is not liable for the dues would be unfair. Therefore, the High Court decided to examine the case on its merits rather than compelling the appellant to exhaust the revisional remedy.

3. The High Court concluded that the appellant could not be held personally liable for the company's dues and that his name should not have been included in the certificate proceeding. The Court modified the Collector's order to clarify that the appellant would not be personally liable for the certificate dues, even if his name was included for descriptive purposes. The writ petition and the appeal were disposed of based on these clarifications and modifications made by the High Court.