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TMI Blog1987 (3) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... total sum of Rs. 30,60,000. A sum of Rs. 2 lakhs was to be paid to the respondents on execution of the said agreement. A sum of Rs. 1 lakh was to be paid on furnishing proof to the petitioner of having taken possession of the plot by the respondents from the DDA. The remaining amount of Rs. 27,60,000 was to be paid to the respondents on completion of the building and at the time of delivery of possession of the said floors. Clause 5 of the agreement provided that time shall always be the essence of the contract. It further provided "any payment made by jyoti within 30 days of its becoming due for payment to the Builders shall be deemed to have been made in time". The sum of Rs. 2 lakhs which under the agreement was to be paid on the execution of the agreement was admittedly not paid on March 3, 1980, when the agreement was executed. By letter dated March 15, 1980, the agreement of sale was cancelled by the respondents alleging breach of the term of the contract by the petitioner relating to the payment of the said sum of Rs. 2 lakhs which had not been paid even by that date. On March 22, 1980, the petitioner sent a letter to the respondents with a bank draft dated March 13, 1980, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the complete third and fourth floors of the said building and had thus wilfully disobeyed and flouted the said orders of the court. The wilful, deliberate and contemptuous disobedience and flagrant violation of the said orders of the court made the respondents liable to action. It was prayed that the respondents be directed to revoke their actions contrary to the aforesaid orders and the court may direct the attachment of the property of the respondents and/or in the alternative direct the respondents to be detained in a civil prison. On the same date, i.e ., February 8, 1983, the petitioner filed a separate petition (Civil Contempt Petition No. 5 of 1983) under article 215 of the Constitution and sections 11 and 22 of the Contempt of Courts Act, 1971, and section 151 of the Code of Civil Procedure for initiating contempt proceedings against the respondents under article 215 of the Constitution of India and the Contempt of Courts Act, 1971, and inflicting such punishment on them as the court deemed just and proper and also a direction to the respondents to comply with the orders of the court dated May 13, 1980, and October 8, 1980, and revoke their actions taken contrary to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exceeding three months, unless in the meantime the court directs his release". Section 2( b ) of the Contempt of Courts Act, 1971 : "Civil contempt means willful disobedience to any judgment, decree, direction, order, writ or other process of a court or willful breach of an undertaking given to a court;" Section 12(1): "Save as otherwise expressly provided in this Act or in any other law, a contempt of court may be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both : Provided that the accused may be discharged or the punishment awarded may be remitted on apology being made to the satisfaction of the court". Explanation. An apology shall not be rejected merely on the ground that it is qualified or conditional if the accused makes it bona fide". Section 12(3): "Notwithstanding anything contained in this section, where a person is found guilty of a civil contempt, the court, if it considers that a fine will not meet the ends of justice and that a sentence of imprisonment is necessary, shall, instead of sentencing him to simple imprisonment, direct that he be detained in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onality of a company and has investigated the personal qualities of its shareholders or the persons in control of it because there was an overriding public interest to be served by doing so. All these cases involved questions of nationality and all of them except one were decided in wartime when the nationalities involved were those of enemy aliens". In Life Insurance Corporation of India v. Escorts Ltd. [1986] 59 Comp. Cas. 548 (SC), the Supreme Court, after examining the law on the subject, said (at page 628): "Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of the public interest, the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers ( Peckham ) Ltd. [1963] 3 All ER 493, 496 (Ch D) Cross J. said: "As is pointed out in Halsbury's Laws of England, third edition, volume 8, pages 20, 21, where there has been wilful disobedience to an order of the court and a measure of contumacy on the part of the defendants, then civil contempt, what is called contempt in procedure,' bears a two-fold character, implying as between the parties to the proceedings merely a right to exercise and a liability to submit to a form of civil execution, but as between the party in default and the state, a penal or disciplinary jurisdiction to be exercised by the court in the public interest'". Thus, it is clear that the law of contempt is conceived in the public interest. In the present case, I have no doubt, the corporate veil is being blatantly used as a cloak to wilfully disobey the orders of the court an improper purpose. Lifting the corporate veil, in these circumstances, is imperative to punish improper conduct. Public interest requires that the corporate veil must be lifted to find out the person who disobeyed the order of the court. Once the corporate veil is lifted, it is crystal clear that the orders of the court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion orders were granted. However, nothing turns on it. The fact that the company was incorporated earlier is no justification for disobeying the orders of the court. I may add here that the leasehold rights in respect of the plot in question were transferred in favour of the company only on November 12, 1980, i.e. , after the injunction order. Prior to that, the company had no right, title or interest in this property. Arguments on these applications were partly heard on December 10, 1986. Mr. G. S. Vohra, learned counsel for the respondents, on that date, made a request for permission to file additional affidavits. This request was allowed. The arguments were thereafter heard from February 9, 1987,onwards. On February 16, 1987, when the arguments had already been completed, the respondents filed affidavits tendering unconditional apology. Paragraph 4 of the affidavit of Smt Kanwaljit Kaur Bhasin dated February 16, 1987, reads as under: "That I humbly tender unconditional apology, which may be placed on the record. My counsel, Sh. G. S. Vohra, tendered apology on my behalf before he closed his opening arguments on February 11, 1987. I have utmost respect for the orders and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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