Fraud vitiates all proceedings and the doctrine of piercing the veil of corporate personality can be applied to avoid tax dues.

M. Katju, J.—This writ petition has been filed for a mandamus directing the respondent Nos. 1, 2 and 5 to release the petitioner’s factory at D-100 Sector II, NOIDA, District Gautambudh Nagar and to restrain respondents from interfering with the petitioner’s business carried out in the aforesaid factory.

2. Heard learned counsel for the parties.

3. The facts of the case are that respondent No. 3 Smt. Poonam Suri purchased the industrial plot in question along with building thereon from the previous owner M/s. Wazid Sons Exports Ltd., New Delhi by a registered sale deed dated 23.6.1987. The respondent No. 4 was allegedly in occupation of the said premises as tenant under its earlier owner M/s. Wazid Sons Exports Ltd. and as such he became the tenant of the respondent No. 3 by operation of law. The respondent Nos. 3 and 4 decided to enter into fresh terms of tenancy and as such executed a registered lease deed dated 17.7.1987 with respect to the aforesaid disputed plot on a monthly rent of Rs. 10,000 vide Annexure-1. Respondent No. 4 who was only the tenant of respondent No. 3 handed over possession of the disputed premises to respondent No. 3 on 10.4.1997 and respondent No. 3 obtained possession certificate. Hence respondent No. 3 came into possession of the disputed premises w.e.f. 10.7.1997.

4. The petitioner is a proprietorship firm of which Gurmeet Singh is the sole proprietor dealing in electronic goods. In connection with its business Gurmeet Singh contacted the respondent No. 3 offering to purchase the aforesaid industrial plot/shed No. 100 Block-D in Sector II, NOIDA and on 13.1.1998 the NOIDA issued the transfer memorandum in his favour vide Annexure-3. Accordingly transfer-cum-sale deed was executed on 31.3.1998 and possession certificate was issued on 1.4.1998 by the respondent No. 3 handing over actual and vacant possession of the said factory vide Annexure-4. It is alleged in para 10 that on 19.1.1999 all of a sudden and without any prior notice or information the respondent No. 5 sealed the factory of the petitioner. The petitioner made enquiry and it was revealed that there were outstanding trade tax dues against respondent No. 4 who was the tenant of respondent No. 3. The petitioner made representations vide Annexures-VI to IX that there were no such tax dues against the petitioner and the respondent No. 3 and hence the impugned recovery action of the respondent No. 5 was illegal. It is alleged in para 15 of the petition that the petitioner has a licence of importer and exporter and he is suffering a set back in his business and is incurring huge loss. It is alleged in para 23 that the respondent No. 3 was in no way concerned as he has made a transfer of vacant possession of the factory building. It is alleged that the petitioner’s factory has been sealed without giving opportunity of hearing.

5. A counter-affidavit has been filed and we have perused the same. In para 3 (i) it is alleged that the respondent No. 4 M/s. Krisons Electronics System Pvt. Ltd. Company is owned by one family. Its Managing Director, Shri R. K. Suri is husband of respondent No. 3 Smt. Poonam Suri. No other outsider persons are involved in the said company. The respondent No. 3 is the wife of the Managing Director, Ramesh Kumar Suri. The land in question was purchased by respondent No. 3 on behalf of Ramesh Kumar Suri for business purpose as disclosed in the transfer deed 23.7.1987 photo copy of which is Annexure-C.A. 1. Respondent No. 4 was already operating before the purchase of the said plot. The plot was actually purchased by the respondent No. 4 through respondent No. 3 who is the wife of the respondent No. 4. The new deed of tenancy itself mentioned that payment of any dues of electricity or water supply is to be made by the tenant, but regarding other dues nothing has been mentioned in the said agreement, and it appears that the other dues are to be recovered from the landlord. The respondent No. 3 had neither purcha