A company incorporated under the Companies Act, 1956, is a separate legal entity and its telephone connection cannot be disconnected due to arrears of another company.

S.B.Sinha, J.

1. In this writ application the petitioners have prayed for a writ of or in the nature mandamus directing the respondents to restore their telephone connection bearing No. 25711 and 23094 which has been disconnected allegedly because one Susmit Sangeeta Intermagnetics (P) Ltd. did not pay its dues in respect of its telex No. 203 and teledhone No. 25213. By an order dated 25-3-87 while this application was admitted, it was directed that the telephone connection of petitioner No. 2, Shanti Modi should be connected forthwith. I am told that this order has been complied with.

2. The respondents although were directed to file a counter affidavit within one month from the aforementioned date of admission i. e., 25-3-1987 but they have not filed any counter affidavit. The petitioners in the writ application have stated that the petitioners No. 1 is a limited company registered and incorporate under the Companies Act, 1956. It has further been stated that the petitioner No. 2 has got nothing to do with M/s. Sum it Sangeeta Inter-magnetics (P) Ltd. It is further alleged that Nirmal Modi who was Director of the aforementioned company was also a Director of the petitioner Company. The said Nirmal Modi was one of the sons of late Daya Nand Modi whose widow is the petitioner No. 2. The petitioner in paragraph 7 of the writ application clearly asserted that the telephone connection held by them have absolutely no connection with the telex or telephone of M/s. Sumit Sangeeta Intermagnetics (P) Ltd. It is contended in the writ petition that in view of that the petitioner No. 1 as also the aforementioned M/s. Sumit Sangeeta Intermagnetics (P) Ltd.- are two different companies and being separate legal entities, the telephone connection of one could not have been disconnected owing to non-payment of alleged dues by another company.

3. When questioned, Mr. Debi Prasad, learned Counsel appearing on behalf of the respondents could not point out any law, rule or any circular having the force of law or any agreement which entitles the respondents to take recourse to such an action. In view of the fact that no counter affidavit has been filed on behalf of the respondents, the allegation made in the writ petition have to be accepted as correct.

4. It is a well settled principle of law that a company which is incorporated under Sec.34 of the Companies Act has a separate legal entity and is a juristic person for all purposes. Reference may be made to a well-known decision in Salomon V/s. Salomon and Co. Ltd. 1897 A.C. 22, wherein it has been held that a company when registered and incorporated is at law a different person altogether from the subscribers of the memorandum of association. It is now well settled that the directors or the shareholders of a company are not liable for legal liability incurred by such limited company. This decision has been cited with approval in various decisions of High Courts and the Supreme Court. Reference may be made to a decision of the Supreme Court in State Trading Corporation of India V/s. The Commercial Tax Officer and Ors. A.I.R. 1963 S.C. 1811 as also a decision of this Court in Sarala Devi Agarwala V/s. The State of Bihar 1979 B.B.C.J. 213.

5. In view of the fact that the two companies namely, petitioner No. 1 and aforementioned Sumit Sangeeta Intermagnetics (P) Ltd. were two different companies and thus two separate juristic persons, the telephone connection of the petitioners could not have been disconnected owing to any arrears which may be due in respect of the Telex No. 203 and Telephone No. 25213 belonging to the later company.

6. It must be borne in mind that power to disconnect a telephone connection like that of electrical connection is given in addition to realise arrears. It is now well settled that in view of the fact that a statutory right of disconnection has been conferred upon the respondent, the said right should be exercised with due care and caution.

7. The respondent No. 1