COMPANY LAW-I

STUDY MATERIAL

This study Material is Prepared by

Dr. Pradip Kumar Das, Associate Professor,
Department of Law and Governance,
CUSB,
for the students
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
A corporation is clothed with a
distinct personality

Supported Case: Saloman vs.

Saloman & Co(1897)A.C.22 & Lee vs.
Lee’s Air firming Ltd.(1961) A.C. 12

Principle of separate legal

entity/corporate personality may be
called as “the veil of the corporation”
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
There is a fictional veil/legal fiction
between company and its members

But, people started to use this veil of

corporate personality blatantly for fraud
and improper conduct

As a result, it becomes necessary for

courts to break through or lift the
corporate veil
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
Lifting of the corporate veil under judicial
interpretation/ Cases when veil of the company
may be lifted:
(i). For Protection of revenue-
- Juggilal vs. Commissioner of Income Tax, U.P., A.I.
R. (1969)S.C.932
- Union of India Vs. Playword
Electronics(pvt).Ltd.(1990)68 Comp.Cas 582(S.C.)
(ii).For Determining the character of the Company-
-Daimler Co. Ltd. Vs, Continental Tyre & Rubber Co.
Ltd., (1916)2 A.C., 307
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
(iii). For preventing fraud or improper conduct-
-Jones vs. Lipman(19620All.E.R. 442
(iv). Where company acting as agent or trustee of
the shareholders-
- In Re R.G. Films Ltd.(1953)1 All.E.R. 615
(v). To Protect Public Policy-
-In connors Bros. vs. Connors(1940)4 All.E.R.179
(vi).In Case of Economic Offences-
-Santanu Roy vs, Union of India[1988(18)ECC51Del.]
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
(vii). Avoidance of Welfare Legislation-
-The Workmen of Associated Rubber Industry Ltd.
Vs, Associated Rubber Industry Ltd.
(1986)59Comp.Cas.134(S.C.)
(viii). Where the Company is a sham-
- Gilford Motor Co. Ltd. vs. Horne(1933)Ch.935 C.A.

(ix). For determination of Technical Competence of a

Company-
 Concept of Corporate Personality &
Doctrine of Lifting of the Corporate Veil
- The New Horizons Ltd. Vs. Union of
India(1995)SCC(1)478.

(x)To punish for Contempt of Court-

-Jyoti Ltd. Vs. Kanwaljit Kaur
Bhasin(1987)62Comp.Cas.626, Delhi.