9911796707
TMI Blog2024 (11) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, there was no occasion for the respondent to attach the bank accounts of the petitioner for recovery of its dues as against the concerned company. A perusal of Section 83 (3) of Companies Act also reflect that the recovery from the director of a company can only be made when such a company has been wound up. Even under the Companies Act, 1956, the provision for recovery from the director is not available at the stage prior to winding up of the company - There is also no case of allegation of mismanagement of the company and in such circumstances also, the order would have to be obtained from the concerned NCLT. The order of attachment of the saving accounts of the petitioner and the notice dated 12.02.2021 are quashed and set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 as extended to Chandigarh (hereinafter to be referred as the Act ) whereby the liability of the private limited company can be fastened on the director of the company, especially when the company is functional. Also submits that the director would be liable for recovery only under Section 18 of the Central Sales Tax Act, 1956 in cases where the private limited company has gone into liquidation and has been wound up. 3. Learned Senior counsel has invited our attention to a recent judgment of Hon ble the Supreme Court in Civil Appeal No. 10433 of 2024 (arising out of SLP (Civil) No. 20534 of 2019) Shankar Rudra vs The State of Uttarakhand and others, decided on 10.09.2024 , wherein the provisions of Section 12(1) of the Uttarakhand Value Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent submits that the petition is pre-mature and the proceedings are to be taken against the company. 6. We have considered the pleadings and find that as per the reply filed by the respondent, the company has itself filed an appeal before the appellate authority, which is still pending. It is also noticed that the company is functional and the petitioner is no more a director of the said company. In the circumstances, there was no occasion for the respondent to attach the bank accounts of the petitioner for recovery of its dues as against the concerned company. The provisions of Section 83 (3) of the Act reads as under:- 83 (3) Notwithstanding anything contained in the Companies Act, 1956, when any private company is wound up and any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts of the petitioner as bad in law as we find that it is a clear case of arbitrary exercise of power by the respondent and is wholly without any authority. 9. The order of attachment of the saving accounts of the petitioner and the notice dated 12.02.2021 are quashed and set aside. The petitioner is held to be entitled to receive a sum of Rs. 1 lac as penal cost for wrongful attachment of his bank accounts putting him in unnecessary financial distress. The amount of Rs. 1 lac shall be paid by the respondent authorities and deposited in his bank account within two months, failing which interest @ 18% shall also be paid, which may be recovered from the concerned delinquent officer, who has arbitrarily issued attachment order without author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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