Corporate veil can be pierced only in exceptional circumstances by the courts with caution and circumspection and in a restrictive manner.

JUDGMENT :

Pankaj Bhatia, J.

1. Heard Sri Rohan Gupta, learned counsel for the petitioner in Writ Petition No. 33100 of 2019 and Shri Gagan Mehta learned counsel for the Petitioners in Writ Petition No. 32727 of 2019, learned Standing Counsel for the State-respondent and Sri Kaushalendra Nath Singh, learned counsel, on behalf of Noida Authority.

2. The above two petitions are filed challenging same recovery certificate and on similar grounds and as such are being decided by this common judgment.

3. The Petition No. 33100 of 2019 has been filed challenging the acts of the respondent authorities in trying to recover the amounts in default against PAN Realtors Pvt. Limited from the petitioner being a Director in the Company known as Nirala Developers Pvt. Limited which is a shareholder in Pan Realtors Pvt Ltd.

4. The Petition No. 32727 of 2019 has been filed challenging the acts of the respondent authorities in trying to recover the amounts in default against PAN Realtors Pvt. Limited from the petitioner company being a sister concern of the Company known as Nirala Developers Pvt. Limited which is a shareholder in Pan Realtors Pvt Ltd.

5. The brief facts leading to the filing of the present petitions are as under:

The respondent no. 2, New Okhla Industrial Development Authority (hereinafter referred to 'Authority') floated a Scheme of allotment of plots for Group Housing at Noida for interested developers. In pursuance of the said Scheme/announcement made by respondent-Authority, one Consortium of Companies in the name of style of Pan Ventures filed an application showing interest in allotment of the land for Group Housing at Noida. In pursuance of the said application, a letter of allotment dated 21.7.2009 was issued by the respondent no. 2-Authority proposing to allot Group Housing Plot No. GH-01, Sector 70, Noida under the Group Housing Scheme GH-2009(ii). The said allotment letter is on record as Annexure-1 and was issued in the name of Consortium known as PAN Venture.

6. A perusal of the allotment letter dated 21.7.2009 shows that the said allotment letter was issued to PAN Venture, a Consortium comprising of Patel Engineering Limited (leading member), Advance Construction Company (relevant member), Nirala Developers Pvt. Limited (relevant members) at their office situate at H-13, First Floor, Main Market, Vijay Chowk, Lakshmi Nagar, Delhi.

7. The said allotment letter envisaged the allotment of a plot for Group Housing Rights and manner of payment specified in the letter of allotment itself. Peculiar feature of the said allotment letter as under:

“You are also requested to form the SPC duly registered in ROC and also submit the Memorandum of Article of Association of SPC, List of Directors and Shareholders duly certified by CA and Board of director's Resolution of Constituted Special Purpose Company.”

8. It was further specified that the Special Purpose Company to be created would be comprised of following Company:

9. It was further provided that in the event of default in payment the allotment offer would be considered as cancelled and the registration money shall be forfeited and no interest shall be paid to the proposed allottee.

10. It was further specified that the proposed allottee shall issue an indemnity bond indemnifying the Authority against all disputes arising out of non-completion of project, quality of construction and any dispute arising out of allotment/lease to the final purchaser. The other conditions relevant for the purposes of the present case, as contained in the allotment letter, were as under:

“In case the Lessee does not construct building within the time provided