CASE LIST AND REFERENCES

S.no. Case Name Issue/ Keywords Judgement Topic

1. Tenant v. Stanley ● Meaning and scope of No strict technical Introduction

the word “company” meaning of the
● The will gave trustees word “company”.
the power to invest in
any stocks, funds and
securities of “any
corporation or
company”, municipal,
commercial or
otherwise.

2. Salomon v. Salomon Leather merchant converted The Company is at Separate corporate

into a company with wife and law a separate personality
five children as members (one person. Act
share each). Salomon as MD created limited
held 20,001 shares and liability companies
company was wound up with as legal persons
70,000 unsecured creditors. separate and
distinct from the
shareholders.

3. The Kondoli Tea The 8 gentlemen for both The company is a Separate Corporate
Estate tansferer and transferee separate person Personality
company. Not conveyance but regardless of
transfer by way of sale. whether the
shareholders are
different or not.

4. Lee v. Lee’s Air Lee was both the director and The Co. is not an Separate Corporate
pilot for his company, died in agent of the Personality
the course of his employment. members or its
Issue in director or employee employees. Lee
for compensation? had a contractual
relationship with
the company and
died while
working for the
company as an
employee
5. Merchandise A subsidiary company formed The transfer of the Piercing through the
Transport v. British for the purpose of obtain shareholding and corporate veil.
Transport licenses was denied. subsequently the
Commissioner licenses between
The subsidiary and the parent the parent and the
were acting as one unit – subsidiary
subsidiary was to obtain an company must be
advantage for the parent treated as a sham.
company.

6. Dinshaw Maneckjee ● Formed 4 pvt Sole purpose of Separate Corporate

companies, executed a the company was Personality
trust deed making him to evade tax.
a trustee of all of them Lifting the corporate veil.
while the legal owners The sum total of
were his nominees. all business of the
Held all the shares companies was the
except 3. business of giving
● The company was loan to the
doing no business other defendant.
than receiving Corporate veil was
dividends and lending lifted.
that to Dinshaw as a
loan with an interest.
No interest was
actually ever paid – no
record.
● It was actually his
profit/dividend which
he was avoiding to be
taxed by showing it as
loan.

7. State of UP v. Renusagar, a WOS of Own source of Lifting the corporate veil.

Renusagar Power Co. HINDALCO, supplied generation, WOS
electricity to this particular and no other
company, alterations to supply consumer -
were influenced by corporate veil
HINDALCO’s needs and lifted.
approvals were sought from
the latter.
An exemption was sought for
taxes based on sale and self-
consumption.

8. Daimler Co. v. Continental, a German A company can Lifting of corporate veil.

 Continental Tyre Company in England, sold
tyres to a British Company.
After WW1, a suit by them
was seen as trading with an
alien enemy company.
9. Macaura v. Northern Sale of timber by owner to
Assurance company, sole shareholder,
insured under his own name,
insurance claim and insurable
interest as a shareholder or
creditor challenged.
10. Khanji Udyog A takeover of a company as a
WOS by Ultra Tech Cement
which switched from a
partnership to a company
having a mining lease in its
name. The purpose of transfer
of lease and sale of company
is questioned in violation of
Rule 15.
11. Vodafone HTIL had invested through a
International JV in HEL which had a
majority ownership (52%) of a
WOS CGP which got
transferred to Vodafone
International. Capital Gains
tax was not paid for acquiring
an underlying Indian asset.
only act through
agents properly
authorized.
Assumed to be of
enemy character in
the name of public
policy. Corporate
Veil Lifted.
Whole interest of There is no means by which
the company with such an interest can be
him. The definitely measured and no
appellant’s standard which can be fixed
position as of the loss against. The
shareholder, must corporate veil was not
be independent of lifted.
the extent of his
share interest
No full disclosure Lifting of corporate veil.
of facts, sale of
shareholding by
GLKUPL to
UTCL is a private
unauthorized sale
of mining lease
which being in
violation of rules
is void.
Substance over Lifting the corporate veil
form principle.
The “look at”
principle which
states that the
Revenue or the
Court must look at
a document or a
transaction in a
context to which it
properly belongs
to. HTIL has been
existence since
1994 and paid its
taxes timely. There
exists a continuity.
12. Prest v. Petrodel During divorce proceedings,
Resources wife claimed over the
properties and businesses
remotely owned by the
husband. The issue was
establishing power of the
courts to transfer the
companies when the real
owners were the companies
itself and not the husband.

13. Erangler An island was bought by the
defendant and sold at double
the price to a company in his
complete control. Such
transaction was not disclosed
in the prospectus.
The company was Incorporation
asked to refund the
excess amount to
the shareholders.

14. Gluckstein v. Barnes The prospectus of a company
did not disclose an additional
discount of 20,000 on
purchase, to its investors.
The Liquidator Incorporation - full
claimed repayment disclosure
of the discount.
Bound by a duty to
make explicit
declarations of the
profits made.

15. Kelner v. Baxter The plaintiff entered into a The promoters Pre-Incorporation
contract to sell wine to a were held
company not yet incorporated. personally liable.
The promoters drank the wine
and before payment was due,
the company went into
liquidation. Company or
promoters liable?

16. Ashbury v. Iron Co. A railway contract was
considered to be financed by
the company (MoA stated
general contractors) which due
to payment dispute, was
cancelled. Issue on being ultra
vires?
The objects of this The Memorandum is the
company, as stated Charter of the company.
in the MoA, were
to supply and sell
the materials
required to
construct railways,
but not to
undertake/finance
their construction.
The contract here

17. Lakshmanaswami ● The company has the
Mudaliar v. L.I.C status of an insurer
under LIC Act 1939. In
1955, the shareholders
passed a resolution to
donate 2 lakhs to a
trust made with the
object of promoting
technical or business
knowledge including
knowledge in
insurance.
● This was called for a
refund under the LIC
Act 1956 stating it to
be ultra vires because it
being outside “any
useful object” by virtue
of the MOA.
18. Royal British Bank v. A particular company called
Turquand Coalbrook Steam through its 2
directors and a secretary
borrowed 2000 GBP from the
Royal British Bank through a
bond. The settlement deed had
a clause which allowed them
to borrow funds by passing a
general resolution. The bank
sued for non-payment of the
money.
19
was to finance a
railway.
The primary object Ultra vires - any useful
of the company is object
to carry on life
insurance and
charity is not
incidental to or
naturally
conducive to that
object. There is in
fact no discernible
connection
between the
donation and the
object of the
Company. (TOO
INDIRECT) (Ye
meri expertise nhi
hai, I am out)
Doctrine of Indoor Turquand’s rule:
Management: States that a person dealing
Protects outsiders with a company is entitled
from the company to assume, in the absence of
for irregularities facts putting him on inqury,
within the that there has been due
company. It gives compliance with all matters
the power to the of internal management and
outsiders to procedure required by the
assume that corporate constitution
internal company
rules are complied
with even if they
are not.