The main legal point established in the judgment is the court's authority to set aside an award if it is in violation of the Public Policy of India, particularly in cases where the corporate veil is used to commit fraud or evade liabilities.

MAHMOOD ALI KHAN, J. - This application is filed under section 34 of the Arbitration and Conciliation Act (for short the Act) for setting aside the award dated 31.10.2002 rendered by the sole arbitrator, Mr. Justice (Retd) K. Ramamoorthy so far as it is based on the finding on issue No. 6, that the respondent No. 2 is not liable to pay the awarded amount personally. The facts of the case may be stated as follows :

1.1 The respondent No. 1 is a company incorporated under the Indian Companies Act and respondent No. 2 is its President, Managing Director and CEO. Respondent No. 1 entered into an agreement, dated 7.5.1999, for having premises situated at Block A, House No. 1, Dr. Jha Road, Okhla, New Delhi, fitted. The said contract contained an arbitration clause for reference of the dispute which may arise between the parties. The petitioner executed the contract and certain disputes with regard to the payment of the running account bills and final bill submitted by the petitioner to the respondent have arisen. The respondent No. 1 did not have any assets in India, and it would have been impossible to recover money found due against it in the award passed against it. The petitioner, to safeguard its interest, filed a petition under section 9 of the Act bearing OMP No. 329/99 before this court. The court issued notice to the respondents and by an ex parte order, restrained respondent No. 2 from leaving the country during the pendency of that proceeding. With the consent of the parties this court referred the dispute between the parties to the arbitration of Mr. Justice (Retd) K. Ramamoorthy on 5.9.2001. The respondents had filed two applications bearing IA Nos. 12645/2000 and 58/2001 for recall of the interim ex parte restraint order passed against the respondents in the said proceeding. In the latter application, inter alia, it was stated that respondent No. 2 would make himself available after visiting his family and Mauritius, London, Hongkong and Singapore for business purpose. The petitioner conveyed its no objection provided the respondent No. 2 is permitted to travel abroad subject to securing the claim of the petitioner to the extent of Rs. 76,59,714. In reply, the respondent No. 2 offered to furnish surety of his mother that in case the respondent No. 2 failed to return to India within 30 days, she would make herself liable to the extent of the amount which would be finally found due from the respondents No. 1 and 2. With the consent of the parties, the court directed the property bearing No. 6, Nizamuddin East, New Delhi, which is owned by the mother of the respondent No. 2 be accepted as security to the extent of Rs. 76,00,000 and interest thereon; and that would be charged for the amount which was ultimately awarded by the arbitrator. The respondent No. 2 undertook to execute the necessary surety bonds, to the satisfaction of the Joint Registrar. Subject to furnishing of the surety bond the respondent No. 2 was allowed to go abroad, but before the Joint Registrar the mother of the respondent No. 2 resiled from her undertaking and declined to furnish the surety bond. As a result, the court clarified that the permission granted to the respondent No. 2 to go outside India was conditional. The respondent No. 2 thereafter filed another application for recalling the order, inter alia, stating that he was not a party to the agreement between the petitioner and the respondent No. 1 and could not be restrained from leaving the country and could not be held personally liable for the debts of the respondent No. 1 which had a distinct legal entity and he himself was not a necessary party to the petition. The petitioner traversed this claim of the respondent No. 2 and pleaded that the respondent No. 1 did not have any asset in India; respondent No. 2 was the only person in control and in-charge of the affairs of the respondent No. 1 company; respondent No. 2 owns 10 shares in the said company worth Rs. 100 and another 10 s