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TMI Blog2009 (1) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed the suit for recovery of Rs. 75,20,000 by way of compensation against the defendants claiming the joint and several liability of the defendants. Defendant No. 1 is a company incorporated under the Companies Act, 1956 and defendant Nos. 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 averred to allege the liability of the defendants and their liability as the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. Defendant No. 3 also denied the existence of any corporate veil which is required to be lifted. 7. In the reply filed by defendant No. 2 it is submitted that since defendant No. 2 has ceased to be the director of defendant No. 1 company since 1-1-2000, there was no privity of contract between the plaintiff and defendant No. 2 and thus, there is no personal liability of defendant No. 2 against the plaintiff. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A. Salomon & Co. Ltd. 1897 AC 22 (HL), where it is too flagrantly opposed to justice, convenience or the interest of the revenue. In the cases where the corporate 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. 12. Fraud is, therefore, a necessary element for piercing the corporate veil, which is already present in the original plaint in the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 inconsistent pleas. In this case, the plaintiff were seeking alternative reliefs. The application for amendment of the plaint whereby neither cause of action could change nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewspaper The Statesman, Delhi edition but no one appeared on behalf of defendant No. 1 before the Joint Registrar on the said date and even before the court on 9-1-2009, when the two applications under Order 6, rule 17 of the CPC filed by the plaintiff were considered. Defendant No. 1 is accordingly proceeded as ex parte. 18. The matter be listed before the Joint Registrar on 24-2-2009, for completion of the pleadings and pending application. I.A. No. of 2007 (under Order X, rule 1 CPC read with rule 151 CPC (by defendant No. 2 for deletion of name) (to be numbered) 19. In view the order passed in the application filed by the plaintiff under Order 6, rule 17 read with rule 151 of the CPC, the present application for deletion of the name ..... X X X X Extracts X X X X X X X X Extracts X X X X
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