The main legal point established in the judgment is the requirement to implead Directors in their personal capacity for the attachment of personal property in execution and the inapplicability of the doctrine of piercing the corporate veil in the absence of such impleadment.

JUDGMENT

(Prayer: This Civil Miscellaneous Appeal is filed under Order 21 Rule 58(4) of the Code of Civil Procedure, to set aside the fair and decretal order dated 22.12.2021, passed in E.A.No.292 of 2014 in E.P.No.189 of 2014 on the file of the learned Principal District Judge at Tiruppur. This Civil Miscellaneous Appeal is filed under Order 21 Rule 58(4) r/w Order 43 Rule 1 of the Code of Civil Procedure, to set aside the fair and decretal order dated 22.12.2021, passed in E.A.No.206 of 2015 in E.P.No.189 of 2014 on the file of the learned Principal District Judge at Tiruppur.)

1. The third party objectors viz., legal heirs of late P.Nachimuthu Gounder, who filed E.A.No.292 of 2014 in E.P.No.189 of 2014, are the appellants in CMA No.805 of 2022.

2. One another E.A. i.e. E.A.No.206 of 2015 in E.P.No.189 of 2014, was filed by the third party objector viz., N.Ganesan and against the order passed in the said E.A., he has filed CMA No.813 of 2022.

3. Contesting 1st respondent has entered appearance.

4. The appellant herein N.Ganesan, is the Director of the Judgment Debtor Company. Arbitration proceedings have been initiated before the Delhi High Court, resulted in appointment of an Arbitrator and passing of the award that will be discussed infra and further proceedings under Arbitration and Conciliation Act, 1996, has also concluded.

5.(a) The 1st respondent herein has preferred Execution Petition i.e. E.P.No.189 of 2014, before the Civil Court at New Delhi and claims to have obtained an order of attachment, thereafter, it was transmitted to Tiruppur District for execution.

(b). In the execution proceedings, some of the properties ie., personal properties of the Director were included and hence, he has moved EA Nos.292 of 2014 and 206 of 2015 for lifting the earlier order of attachment. By an order dated 22.12.2021, the Execution Court [Principal District Judge], Tiruppur has dismissed the applications and hence, these Civil Miscellaneous Appeals.

6. The learned Senior Advocate appearing for the appellants submitted that the principal issues that arises for consideration in these appeals are as under:

1) Whether the Civil Court at New Delhi can pass an order of attachment in respect of the property at Tiruppur District in Tamil Nadu State and hence, the same lacks territorial jurisdiction to pass such an order?

2) Whether the personal property of the Director be attached in execution in respect of the claim against the Judgment Debtor Company?

3) Admittedly, whether did the Company had any property or not is a different issue?

4) Whether the personal property of the Director of the Judgment Debtor can be attached in execution proceedings, without making them as party either in Arbitration or in Execution Petition?

7. Therefore, the appellants have challenged the findings rendered by the Execution Court at Tiruppur that lifting of corporate veil is not applicable and the same ought to have been taken in the arbitration proceedings. In the absence of any plea during the arbitration proceedings, such a plea of lifting of the corporate veil cannot be raised for the first time in the execution proceedings. Besides, Directors are not added as party in the Execution Proceedings.

8. The learned counsel Mr.Sanjay Agnihotri appearing for the 1 st respondent has made reply, that are discussed infra.

9. The chequered history of this case leading to the filing of these Civil Miscellaneous Appeals are as under.

(a) Between the 1 st and 2 nd respondent, judgment debtor and decree holder, respectively, there was an arbitrable agreement for supply of equipments on lease in the year 2007. The said agreement captioned as “Equipment lease agreement'' was entered into between the parties on 23.05.2007. The Schedule-I that has been annexed to Equipment Lease Agreement was exchanged between the parties.

(b) The decree holder is a partnership con