IMPORTANT POINTS
Lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. When there is deliberate attempt to avoid a legal obligation or to avoid force of law, or when the formation of companies are merely to defy the law as well to defeat the rights of the customers dealing with them, the court will break through the corporate shell and apply the principle of lifting of corporate veil. Though, a company is a separate legal entity distinct from its members in fact, it is an association of persons that carry out the business on behalf of the incorporated corporation. Doubtless, that a court can lift the corporate veil in appropriate cases to reach the person behind the veil to reveal the true form, character, realities, real state of affairs etc of the company. The Directors or shareholders can not be allowed to take shelter or protection behind corporate personality when there is act of wrong doing, violation of law or injustice to the public, customers/third parties who approach them for their business.

JUDGMENT :

1. The decree holder in O.S. No. 417 of 2011 on the file of the Subordinate Court, Ernakulam has come up with this appeal aggrieved by the order dated 30.08.2018 whereby allowing the claim petition filed under Order XXI Rule 58 of the Code of Civil Procedure as E.A. No. 288 of 2018, in E.P. No. 232 of 2017, and lifting the attachment effected by the execution Court.

2. The claim petitioner is M/s. Nippon Infra Project (P) Ltd. represented by its Director Sri.John George. The property scheduled in the petition is having an extent of 41.997 Ares comprised in Sy. Nos. 85/19/A/1 and 85/18 of Edappally south Village. It forms part of a larger extent of 83.06 Ares of Edappally south village. The property has been purchased by the claim petitioner as per sale deed bearing No.2892/2008 of SRO Edappally and it is being enjoyed by the company by effecting construction of a 16 storied commercial building. But it was attached in execution of the decree in the suit (O.S. No.417/2011). The claimant is not liable to compensate the Decree holder or to satisfy the decree debt and hence the petition was filed to lift the attachment and to allow the claim petition.

3. The decree holder resisted the petition inter alia contending that M/s. Nippon Infra Project (P) Ltd is one of the projects of the judgment debtor, namely, M/s. Infra Housing Project (P) Ltd. Both the companies have common Directors and investors. The property attached is in the joint ownership of the claim petitioner as well the judgment debtor and hence the claim petitioner has no exclusive right over the property under attachment.

4. Before the court below, the Director of the claim petitioner was examined as PW 1 and Exts. A1, A2 and A4 to A6 were marked. No oral or documentary evidence was adduced on the side of the respondent/decree holder. The court below, on appreciation of the evidence, allowed the claim petition and lifted the attachment of the property .

5. Heard Adv. K. Ramakumar, the learned Senior Counsel for the appellant/decree holder, Adv. Vinay V. Menon, the learned counsel for the first respondent/claim petitioner and Adv. George Cherian Karipparambil, the learned counsel for the 2nd respondent/Judgment debtor.

6. The appellant is the decree holder in the execution petition (herein after referred to as the appellant). M/s. Infra Housing Pvt. Ltd is the defendant in the suit as well the judgment debtor, represented by its Director Sri. George E. George. As per Ext.A2 Sale Deed No.2892/2008, the property attached was purchased along with a larger extent by M/s. Nippon Infra Project (P) Ltd, a company registered under the Companies Act,1956. Ext.AI is the certificate of incorporation of M/s. Nippon Infra Project (P) Ltd. As borne out from Ext.A2, Sri.George E. George, the Director of M/s. Infra Housing Pvt. Ltd is also a Director of M/s. Nippon Infra Project (P) Ltd, the claim petitioner. It is pertinent to note that the Memorandum and Articles of Association of both the companies have not been produced and therefore the entire details of the Directors of the Companies are not available. According to the appellant, both the companies, M/s. Infra Housing Pvt. Ltd and M/s. Nippon Infra Project (P) Ltd, have common Directors and investors. The said fact was fairly admitted by PW1, a Director of the claim petitioner when examined before the court below. He had also admitted that Sri.George E. George, the Director of the Judgment debtor company is a Director of M/s. Nippon Infra Project (P) Ltd, and the Directors have right over the assets of the company. PW1 has admitted before the court that he is one of the Directors of M/s. Infra Housing Pvt. Ltd, the judgment debtor, and George E. George its' Director is also a Director of the claim petitioner company. Admittedly, M/s Nippon Infra Project (P) Ltd, is constructing commercial buildings whereas M/s. Infra Housing Pvt. Ltd, is engaged in housing projects as admitted by PW1. It appears that the business run by both