Anirban Roy & Anr v. Ram Kishan Gupta & Anr

RAJIV SAHAI ENDLAW, J. AUGUST 03, 2017 "gsr"/"R" (Corrected & released on 29th September, 2017)

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 3rd August, 2017 + CM(M) 559/2017 & CM No.19057/2016 (for stay) ANIRBAN ROY & ANR ..... Petitioners Through: Mr. J.P. Sengh, Sr. Adv. with Mr. Lalit Bhardwaj, Ms. Priya Sharma & Ms. Manisha Mehta, Advs. Versus RAM KISHAN GUPTA & ANR ..... Respondents Through: Mr. Hemant Malhotra & Mr. K.J.S. Kalra, Adv. for R-1. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. This petition under Article 227 of the Constitution of India impugns the orders [dated 23rd February, 2017 and 17th March, 2017 in Execution No.97/2017 of the Court of Additional District Judge (ADJ)-03, New Delhi District, Patiala House Courts, New Delhi] in exercise of powers under Order XXI Rule 41 of CPC, directing the petitioners viz. Anirban Roy and Romira Roy being the Directors of the respondent no.2 / judgment-debtor Seed Infrastructure & Solutions Pvt. Ltd. to disclose their personal movable and immovable assets in terms of judgment dated 11th January, 2016 of this Court in Execution Petition No.275/2012 titled Bhandari Engineers & Builders Pvt. Ltd. Vs. Maharia Raj Joint Ventures & Ors. and on failure of the petitioners to do so, issuing bailable warrants in the name of the two petitioners. 2. The petition was entertained and vide ad-interim order dated 19th May, 2017, the direction for issuance of bailable warrants was ordered to be kept in abeyance. 3. The counsel for the respondent no.1 appears. 4. I have already in order dated 19th July, 2017 in CM(M) No.731/2017 titled Ashu Sharma Vs. Framework Interiors dealt with the identical order of the same learned ADJ and allowed the petition. 5. In the present case, the respondent no.1 is the holder of a decree against the respondent no.2 for recovery of Rs.30,66,740/- with interest and for mandatory injunction directing the respondent no.2 judgment-debtor to furnish TDS certificates and to pay arrears of electricity and maintenance charges. 6. In execution filed by the respondent no.1 of the said decree, an order under Order XXI Rule 41 of the CPC was issued and subsequently the directions as contained in the impugned order dated 23rd February, 2017 directing the petitioners, being the Directors of the respondent no.2 / judgment-debtor, to also disclose their personal movable and immovable assets was issued. 7. A routine direction against Directors and shareholders of judgment-debtor companies turns the elementary principle of company law, a company being a legal entity, is distinct from its shareholders and Directors, on its head. 8. It is settled principle of law that the Directors and shareholders of a company are not liable for the dues of the company except to the extent permitted by law. 9. I have in V.K. Uppal Vs. Akshay International Pvt. Ltd. 2010 SCC online Delhi 538 held; (i) that there is no provision in the CPC for execution of a money decree against a Pvt. Ltd company, against its directors; (ii) that though Order XXI Rule 50 of the CPC does provide for execution of a money decree against a firm, from the assets of the partners of the said firm mentioned in the said Rule but there is no provision with respect to directors of a company; (iii) that the Executing Court cannot go behind the decree and can execute the same as per its form only; (iv) that if the decree is against the company, the executing Court cannot execute the decree against anyone other than the judgment-debtor company or against the assets and properties of anyone other than the judgment-debtor company; (v) that the identity of a director or a shareholder of a company is distinct from that of the company—that is the very genesis of a company or a corporate identity or a juristic person;(vi) the classic exposition of law in this regard is contained in Solomon Vs. Solomon & Co. Ltd. 1897 AC 22 where the House of Lords held that in law, a company is a person all together different from its shareholders and directors and the shareholders and Directors of the company are not l