TaxTMI 
TaxTMI 
2012 (6) TMI 465
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appellants/defendants. 2. The facts of the case are that the respondent/plaintiff pleaded that he gave a loan totalling to Rs. 3,00,000/- to the appellants/defendants in three parts, i.e. Rs. 1,00,000/- on 3.10.1994, Rs. 1,00,000/- on 8.10.1994 and a further sum of Rs. 1,00,000/- on 12.10.1994. The loan was given in cash, and the appellants/defendants had issued receipts for the same. It was pleaded that the receipts were given back by the respondent/plaintiff to the appellants/defendants when the defendant no.2/appellant no.2 issued and gave to the respondent/plaintiff a cheque for Rs. 3,00,000/- bearing no.903586 dated 12.11.1995 in discharge of the loan. It was pleaded that in addition to giving the cheque towards the loan amount....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tain clearances on its behalf for taking out public issue of shares in the market. Since the respondent/plaintiff failed to arrange the services of the corporate consultant as promised, the cheque had been wrongly presented. 5. Trial Court has dismissed the leave to defend application by making the following pertinent observations: "As has already been noticed hereinabove, defendant NO.2, Sh. Vipin Sehgal, has not denied that the cheque in question dated 10.12.94 was executed by him. The only explanation that he has given for his having issue the cheque is that the plaintiff held out a promise to defend No.1 that he would engage for it the services of some corporate consultant and obtain all clearances on its behalf to enable it to ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... write to the plaintiff that he had backed out from its promise to arrange consultancy services, and as such, the cheque issued by defendant no.2 was no longer valid for payment." [Emphasis supplied] 6. I completely agree with the reasoning given by the Trial Court, inasmuch as firstly, a cheque which is issued is always ordinarily issued for consideration and for which there is a presumption of consideration for issuing of the cheque vide Section 118(a) of the Negotiable Instruments Act, 1881. The presumption of the cheque not being issued for consideration could have been rebutted if the appellants/defendants would have shown that there was in fact an agreement whereby the respondent/plaintiff was to provide the services of a corporate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed cheque. I frankly fail to understand this argument inasmuch as there is no requirement of law that if a suit is filed for recovery of an amount due on a dishonoured cheque, and which is thus based on a specific/particular cause of action, yet the respondent/plaintiff in the said suit must necessarily mention each and every other cause of action of other dishonoured cheques between the parties. Surely, this is not the legal position and therefore I do not find any legal force in argument as urged on behalf of the appellant. 8. The other issue which was urged on behalf of the appellants/defendants was that the appellants no. 2 and 3 could not be made liable for the dues of the appellant no.1/defendant no.1 who had issued a cheque. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned. It follows from the above judgment that a court is competent to pierce through the veil of a Private Limited Company to find out the true entities of the persons constituting the same. I have no manner of doubt that defendants no. 2 & 3 who are husband and wife formed defendants no.1 company to run the same as a joint venture. Hence, I hold that all the three defendants are liable to pay the cheque amount of Rs. 3 lac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Court, inasmuch as, if I allow such a plea, it would amount to using the corporate veil to defraud the creditors. 11. Finally, I put it to the counsel for the appellants/defendants as to what was the result of the suit which was filed by the respondent/plaintiff for recovery of Rs. 1,72,000/- and which was at the relevant time pending before the Court of Smt. Manju Goel, ADJ, Delhi, and to which query of the Court counsel for the appellants/defendants states that he has no details at this time. In my opinion, this aspect is another aspect which should go against the appellants/defendants and show their malafides inasmuch as the impugned judgment has been passed almost 12 years back on 23.1.2001, and still the appellants/defendants have....