Back
PUNJAB & HARYANA HIGH COURT
D.S.Tewatia, J.
Kundan Singh
Versus
Moga Transport Co P Ltd
Civil Writ Petition No. 2010 of 1978,
Decided On : APRIL 5, 1983
Personal Liability - Managing Director's Liability for Company Dues - The court held that unless the statute in question made the managing director of a company personally liable for the dues recoverable from the company, he could not be held personally responsible. Neither in the company law nor in the Industrial Disputes Act does any provision making the managing director personally liable for recovery of dues against the limited company exist.
Fact of the Case:
The petitioner, as the managing director of a company, challenged the direction to recover workers' wages from his personal property, arguing that he could not be made personally liable for the company's dues.
Finding of the Court:
The court found the direction to be illegal and quashed it, stating that there was no provision in the relevant statutes making the managing director personally liable for the recovery of dues against the limited company.
Issues: The issue was whether the managing director could be made personally liable for the company's dues recoverable from the workers' wages.
Ratio Decidendi: The court's decision was based on the absence of any provision in the company law or the Industrial Disputes Act making the managing director personally liable for the recovery of dues against the limited company.
Final Decision: The writ petition was allowed, and the direction to recover the dues from the managing director's personal property was quashed.
D. S. Tewatia, J.
1. Kundan Singh, petitioner, who was the managing director of Moga Transport Co. (P,) Ltd. at the relevant time has impugned the direction contained in letter No. EMP/3232, dated February 16, 1976, from the Labour Commissioner, Punjab, Chandigarh, to the Collector, District Faridkot (annexure P-4), to effect recovery of the wages of the workers found due against the company under various awards from the personal property of the petitioner, on the ground that the managing director could not be made personally liable for the dues recoverable from the limited company.
2. No written statement has been filed nor any opposition has been entered to this writ petition despite service.
3. Mr. Ramesh Kumar, counsel for the petitioner, has sought to sustain the afore-mentioned ground from the ratio of a Division Bench decision, of this court in Surinder Nath Khosla V/s. Excise and Taxation Commissioner Punjab [1964] 15 STC 838 (P and H ). This court in Surinder Nath Khoslas case held that unless the statute in question made the managing director of a company personally liable for the dues recoverable from the company, he could not be held personally responsible.
4. Neither in the company law nor in the Industrial Disputes Act does any provision making the managing director personally liable for recovery of dues against the limited company exist.
5. In view of the above, I hold that the direction contained in annexure P-4 is clearly illegal and the same is, therefore, quashed. The writ petition is allowed, but with no order as to costs.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
