( 1 ) DEFENDANT Nos. 1 and 3 in O. S. No. 30 of 1986 on the file of learned Subordinate Judge, Kovvur had preferred the appeal being aggrieved by the judgment and decree dated 1-11-1994 in the aforesaid suit. The respondent herein, the plaintiff in the suit instituted the suit for recovery of Rs. 34,042-83 together with interest at 14% per annum on Rs. 27,184-50, being the value of the tobacco sold to the defendants by the plaintiff in the month of february, 1983. The trial Court, on appreciation of the evidence of P. W. I and d. W. 1 and Exs. A. l and A. 2 and Ex. B. 1, ultimately decreed the suit as against the 1st defendant - company and 3rd defendant personally for Rs. 30,042-83 Ps. with subsequent interest at the rate of 14% per annum on the principal amount of Rs. 27,184-50 Ps. from the date of suit till the date of realization and the suit against the 2nd defendant was dismissed without costs. Hence this appeal.

( 2 ) SRI P. Radha Krishna, learned counsel representing the appellants-defendant nos. 1 and 3 - would contend that the 1st defendant is a company and the 3rd defendant is the Managing Director of the said Company. The defence is one of discharge. Learned Counsel also would submit that in the light of evidence of d. W. 1 and also Ex. B. 1, receipt, the stand taken by the appellants-defendant Nos. 1 and 3 - should have been accepted by the trial Court and the suit should have been dismissed in toto. Learned Counsel would also submit that it is no doubt true that when the element of fraud is there, there can be lifting of corporate veil for fastening the liability. But without deciding the said question, the 3rd defendant was also personally made liable and hence the said finding cannot be sustained. Learned Counsel would also submit that initially the 3rd defendant was not impleaded as a party; and by the order dated 26-7-1989 in LA. No. 915 of 1989, the 3rd defendant was impleaded as a party and there is no specific order while allowing the application, the suit is deemed to have been instituted even as against the 3rd defendant within the period of limitation and in the absence of the said order, the limitation is not saved; and even on the ground of limitation, the suit as against the 3rd defendant may have to fail.

( 3 ) LEARNED Counsel representing the respondent-plaintiff had taken this Court through the findings recorded by the trial court and would maintain that it is a case where the 3rd defendant played fraud and who had made to initiate action for recovery of amount in relation thereto and hence the trial Court had recorded correct findings relating to the involvement of element of fraud and lifting of corporate veil and ultimately decreed the suit.

( 4 ) HENCE both the Counsel and perused the oral and documentary evidence available on record and the findings recorded by the trial Court. The parties hereinafter will be referred to as plaintiff and defendant Nos. l and 3. As already referred to supra, the suit was dismissed as against the 2nd defendant.

( 5 ) THE suit O. S. No. 30 of 1986 on the file of learned Subordinate Judge, Kovvur, was filed for recovery of an amount of rs. 30,042-83 Ps. It was pleaded in the plaint that the plaintiff is a tobacco grower. He sold tobacco worth Rs. 27,184-50 Ps. , to the 1st defendant in the month of february, 1983. The 1st defendant issued a voucher. The 1st defendant gave a letter authorizing the 2nd defendant to pay the said amount to the plaintiff. The 2nd defendant undertook to pay the said amount. But the 2nd defendant did not pay the amount. A notice was issued to the defendants on 22-12-1984 demanding the said amount. But there is no reply from the defendants. The 3rd defendant is the sole Proprietor of the 1st defendant. He defrauded the creditors in the name of the 1st defendant. Hence the Corporate veil has to be lifted.

( 6 ) THE 1st defendant filed a written statement stating that the amount of rs. 27,184-50 Ps. , had been paid to the plaintiff in full

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