Kapil Kumar v. M/S M & A Designs

judgment debtor is a Firm/Company/HUF/Trust, the Court shall direct the judgment debtor to disclose its assets and income in the format of Annexure-B. This affidavit of the Firm/Company/HUF/Trust shall be sworn by all Partners/Directors (other than independent/non-executive and nominee directors)/Members/Managing Trustee, as the case may be.

¶52If any ground for lifting of the corporate veil is made out, then all the Directors (other than independent/non-executive and nominee directors) of the judgment debtor Company be directed to disclose their personal assets and income in the format of Annexure-A. …"

¶11The Trial Court has, however, prior to deciding the liability of the Managing Director, directed filing of assets. This approach would not be correct. As held in Bhandari Engineers (supra), the Court, before directing filing of assets, would have to arrive at a finding as to why the corporate veil needs to be pierced. Upon rendering a finding on the said aspect, Directors including the Managing Director can be directed to file an affidavit of assets.

¶12Accordingly, it is directed that on the next date i.e., 6th March, 2020, the Executing Court would hear the parties as to whether there are any grounds made out for lifting the corporate veil. Only after arriving at a finding in respect of this issue, the Managing Director/Other Directors can be directed to disclose their personal assets.

¶13Accordingly, the impugned order, to the extent that it directs the Petitioner to disclose his assets, is set-aside and the matter is remanded back for hearing and orders, as set out above.

¶14With these observations, the petition is disposed of. It is clarified that

this Court has not given any opinion on the merits of the matter and on the question as to whether any ground is made out for lifting the corporate veil in the present case.

¶15Order dasti.

PRATHIBA M. SINGH

JUDGE FEBRUARY 28, 2020 Rahul/T

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 28th February, 2020 + CM(M) 267/2020 & CM APPLs. 8083/2020, 8084/2020 KAPIL KUMAR ..... Petitioner Through: Mr. R. Ramachandran, Mr. Lakshmi & Ms. Shobhana Takiar, Advocates (M-9868211477) versus M/S M & A DESIGNS ..... Respondent Through: Mr. Kapil Kumar, Advocate (M- 9818927234) CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral) 1. On an oral prayer of the Petitioner, M/s Brushman (India) Ltd. is impleaded as Respondent No.2 in this petition. Amended memo of parties be filed within one week. 2. The Respondent has filed an execution petition seeking execution of the judgment and decree dated 11th February, 2015 by which the Trial Court had decreed the suit of the Respondent in the following terms: "In view of decisions of above issues, suit of the plaintiff is decreed for a sum of Rs.3,72,772/- from the defendant towards principal amount as on 07.01.2009 with interest @12% p.a., from 07.01.2009 till its realization. Costs of the suit is also awarded in favour of the plaintiff. Decree sheet be prepared accordingly. File be consigned to Record Room." 3. By the impugned order dated 17th January, 2020, which is under challenge in this petition, the ld. ADJ has directed as under: - "Objections are filed by the DH to the affidavit dated 25.04.2019. Heard from both the parties. Additional affidavit and previous affidavit of Sh. Kapil Kumar, the Managing Director of the JD is perused. However keeping in view citation in case titled M/s. Bhandari Engineers & Builders Pvt. Ltd. V. M/s. Maharia Raj in execution petition no. 275/12 dated 05.12.2019 all Directors and Managing Director of JD are directed to file fresh affidavit in Form 16A of Appendix-E of CPC and also as per Annexure-A, B and C as per citation referred above. The said affidavits must be filed strictly in terms of annexures provided. JDs are informed in terms of Sub-Section (3) of Section 55 of CPC, 1908 that they are at liberty to get declared as insolvent as applicable under Law of Insolvency. Affidavits as directed above be submitted by the Directors and Managing Directors of JD within 06 weeks from tomorrow with advance copy to the opposite party. It is made clear to the Directors of JD and Managing Director that on failure to submit affidavit as directed they will be liable to be detained in Civil Imprisonment. It is submitted for Manging Director Sh. Kapil Kumar that Managing Director cannot be held liable as Managing Director has independent standing than of company. The same will be considered after submission of affidavits. However in the meanwhile all the Directors are directed to file affidavit as directed. After filing of such affidavit DH to submit reply on the same as to personal liability is made out on the disclosure made in the affidavit read with decree. Advance copies of these affidavits be supplied by all the Directors and by the Managing Director of the company to the DH within 06 weeks from tomorrow. Ld. Counsel for DH has referred to order in CM (M) 635/2019 dated 24.04.2019 titled Kapil Kumar v. M/s. M&A Designs before Hon'ble High Court of Delhi wherein it is submitted by the ld. Counsel for DH that the petitioner himself had stated that he was ready and willing to file his assets and liability in view of order dated 30.03.2019 subject to which his presence was dispensed with. The ld. Counsel for JD submits that the present Court is satisfied for filing of this affidavit before present Court on 26.04.2019. Heard. There is no issue as to satisfaction of the Court as to liability of the JD but for satisfaction of execution. Put up for further consideration after filing of reply on the above affidavits on 06.03.2020." 4. The submission of Mr. R. Ramachandran, ld. counsel appearing for the Petitioner, is that in terms of the decision of this Court in M/s. Bhandari Engineers & Builders Pvt. Ltd. v. M/s. Maharia Raj Joint Venture & Ors. [Ex.P.275/2012, decided on 5th December, 2019],