JUDGMENT

A. S. NAIDU, J. : Company Act Case No.3/67 relates to Orient Weaving Pvt. Ltd (OWML for short). The following were the Board of Directors of the said Company.

(I) Naba Kishore Mohanty (dead),

(II) Bansidhar Mohanty (dead),

(III) Khetramohan Biswal (dead),

(IV) R. P. Nanda,

(V) Harmohan Das and

(VI) Manmohan Das.

Company Act Case No.7/68 relates to National Foundary and Rolling Mills Pvt. Ltd. (NFRL for short). The following were the Board of Directors of the said Company.

(I) Bansidhar Mohanty (Dead),

(II) Khetramohan Biswal, (dead),

(III) Uchhabananda Samantaray (dead),

(IV) Baman Charan Das (dead),

(V) Manmohan Das and

(VI) R. P. Nanda,

Company Act Case No.5/92 relates to Utkal Distributors Pvt. Ltd. (UDPL for short). The following were the Board of Directors of the said Company.

(I) Bansidhar Mohanty (dead)

(II) Naba Kishore Mohanty (dead).,

(III) Khetramohan Biswal (dead) and

(IV) Radhika Prasad Nanda (only director alive)

The facts and points of law involved in all these Cases being same as directed by order dt.22.2.1995, all the cases were heard together and are disposed of by this common judgment.

2. In the three Company Act Cases most of the Directors are closely related to each other. This Court while dealing with the Company Act cases feels it prudent to lift the veil of corpo¬rate entity and also the economic realities behind legal facade, as has been observed by the Supreme Court in the case of The Commissioner of Income-tax, Madras v. Sri Meenakshi Mills Ltd., Madurai reported in AIR 1967 Supreme Court 819.

Out of the three, two Companies, namely, M/s. National Foundary & Rolling Mills Pvt. Ltd. and M/s. Orient Weaving Mills Pvt., Ltd. were put to liquidation in consonance with the orders passed by this Court. After liquidation the movable and immovable assets of the said two companies were sold, the amounts realized were kept in fixed deposits as directed by this Court.

3. M/s. Utkal Distributors Pvt. Ltd. is admittedly a sister concern of the aforesaid two companies. On the basis of an application filed by M/s. Paradip Port Trust seeking liquidation of the said Company, Company Act Case No.5/92 was initiated. The liabilities of M/s. Utkal Distributors Pvt. Ltd., it was submit¬ted, was sufficient to be mitigated from the amounts realized towards sale proceeds of other two companies, i.e. National Foundary & Rolling Mills Pvt. Ltd. and M/s. Orient Weaving Pvt. Ltd. In course of hearing of these three Company Act Cases, petitions were filed by the United Bank of India and Sri Ranjit Kishore Mohanty in Company Act Case No.3/67 seeking permission to compromise Title Mortgage Suit No.261/69. The terms and condi¬tions of the compromise were that the Official Liquidator would make payment of a sum of Rs.44,46,000/- to the Bank in full and final satisfaction of the dues of the Bank and on such payment, the Bank would abandon its claim in respect of the suits filed by it against M/s. Orient Weaving Pvt. Ltd. (T.M.S. No.261/69) and the First Appeal filed against M/s. Utkal Distributors Pvt.Ltd., i.e. F.A. No.208/86, arising out T.M.S. No.265/69 and the Bank would accept the said sum in full and final satisfaction of all its claims. Another application was filed seeking permission to compromise T.M.S. No.264/69 relating to M/s. National Foundary & Rolling Mills Pvt. Ltd. The terms of said compromise was that the Official Liquidator would pay Rs.43 lakhs and the Bank would accept the same in full and final settlement of its claims in T.M.S. No.264/69 and would release the properties.

4. While the matters stood thus, it was brought to the notice of this Court by filing a memorandum by the Official Liquidator indicating that Paradip Port Trust and some Government Departments have raised certain claims against M/s. Utkal Dis¬tributors Pvt. Ltd. At this juncture Company Act Case No.5/92 was tagged to the proceedings. This Court called upon the parties to suggest suitable measures to decide the inter se dispute. By order dated 17.1.2003