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TMI Blog2009 (11) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... ued against the petitioner (annexure 1 to the petition) is quashed. - Writ Petition Nos. 28886,28892, 28901 - - - Dated:- 11-11-2009 - PRAKASH KRISHNA , J. By means of this writ petition, the petitioners are seeking a writ of certiorari or any other appropriate writ, order or direction for quashing the recovery proceedings against the personal assets of the petitioners and further proceedings pursuant thereto, as well as seeking a writ of mandamus commanding respondents and restraining them from recovery proceedings against the petitioners. The facts of the case in brief are that the petitioners were directors in M/s. Piyarey Lal Rajendra Kumar, 45, Fatehganj, Buland Shahar, a company registered under the Companies Act, 1956. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent Rs. 35,000. The amount of personal security of late Chhajju Mal can be recovered from the assets of late Chhajju Mal which has been inherited by his legal heirs and representative. The sole controversy involved in this writ petition is whether the tax dues from the corporate body can be recovered from the assets of the directors of corporate body. Undisputedly, the petitioners were directors of the company and dues are against the company. The question is whether such dues can be recovered from the personal assets of the directors of the corporate body. The learned counsel for the petitioner has placed reliance on the decision reported in [2008] UPTC 600 (Meekin Transmission Ltd., Kanpur Nagar v. State of Uttar Pradesh). The Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, this doctrine is not to be applied as a matter of course, in a routine manner and as a day to day affair so as to recover the dues of a company, whenever and for whatever reason they are unrecoverable, from the personal assets of the directors. If such a course is permitted, it would lead to not only disastrous results but would also destroy completely the concept of juristic personality conferred by various statutes. In order to find out as to who are the persons responsible personally when the veil is lifted it would be wholly irrelevant as to whether such person is a director or a promoter shareholder or otherwise of the company since the purpose of lifting the veil is to find out the persons who are operating behind the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision reported in [1987] UPTC 473 (Satish Chand Singhal, Kanpur v. Assistant Commissioner (Assessment) 1, Sales Tax, Kanpur) it has been held that in the recovery proceedings against private limited company, the recovery proceedings may continue against assets of company and not against private assets of directors of the company. On the other hand, learned standing counsel for the respondents has placed his reliance on the decision reported in [2003] 23 NTN 995 (All) (Sri Ram Gupta v. Assistant Collector) wherein it has been held that the dues against a company can be recovered from the director of the company. The facts of this case are distinguishable from the case of Meekin Transmission Ltd., Kanpur Nagar v. State of Uttar Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en if lawful but not otherwise permissible, the corporate personality being the result of such fraudulent activity would have to be discarded but not otherwise. These are the things based on positive factual material and cannot be presumed in the absence of proper pleadings and material to be placed by the person who is pleading to invoke the doctrine of piercing the veil and to ignore the juristic personality of the corporate body. Once relevant material is made available by the authority or person concerned, thereafter it would be the responsibility of the other side to place material to meet the aforesaid facts but the mere fact that the company has failed to pay the Government dues or public revenue, that by itself would not invite the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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