TaxTMI 
TaxTMI 
2020 (1) TMI 904
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....o the Defence Secretary, MOD, officially informed them that investigation wing of the Income Tax Department at Delhi had come across photocopies of some classified documents. A search and seizure action under Section 132 of the Income Tax Act, 1961 was carried out on 27.04.2016 in the case of the OIS group of companies, Mr. Sanjay Bhandari and other connected cases. One of the premises covered u/s 132 of the Act was A-341, First Floor, Defence Colony, New Delhi. This was a residential premise occupied by Sh. Ashok Shankar, allegedly a close associate of Sanjay Bhandari and also the Director of some of the OIS group of companies, namely Santech Petro Global Private Limited and Santech Infrastructure Private Limited. 4. It is further alleged that examination of the seized documents resulted in the recovery of some photocopies of documents of Ministry of Defence, Government of India marked 'Secret' and 'confidential'. Details of the alleged secret and confidential documents may be found in the FIR. 5. Accordingly, the Ministry of Defence Vide MoD I.D. No. 01/TS/AS(J)2016 dated 30.08.2016, addressed to CISC, HQ IDS and verbal/telephonic Instructions thereon had issued HQ to file an F....
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....nvestigating officer filed a report with respect to the process under Section 83 Cr.P.C., wherein he stated that he was still in process of identification of properties belonging to accused Sanjay Bhandari and he sought further time for the same. Thereafter, he further gave details of the partial attachment carried out by him. The Trial Court vide order dated 24.03.2017, extended the process under Section 83 Cr.P.C. and sought a detailed report in this regard on 18.04.2017. On the said date, petitioner company moved an application under Section 84 Cr.P.C. seeking release of the properties wrongly attached by the Investigating Officer. Thereafter, an application also came to be filed on behalf of the Kotak Mahindra Prime Ltd. under Section 451 Cr.P.C. seeking release of the two vehicles to them on superdari. The bank sought repossession of the vehicles since allegedly been hypothecated to the bank in lieu of a loan, which had not been paid. The Ld Trial Court vide the impugned order dismissed application filed by the Petitioner and further allowed the application filed by Kotak Mahindra Prime Ltd. 7. It is further submitted, it is not the case of the police that Petitioner company....
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....tion in law is equal to a natural person and has a legal entity of its own. The entity of the corporation is entirely separate from that of its shareholders; it bears its own name and has a seal of its own; its assets are separate and distinct from those of its members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the corporation. This position has been well-established ever since the decision in the case of Salomon v. Salomon & Co. (1) was pronounced in 1897; and indeed, it has always been the well- recognised principle of common law. However, in the course of time, the doctrine that the corporation or a company has a legal and separate entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the corporation can be lifted and its face examined in substance. The doctrine of the lifting of the veil thus marks a change in the attitude that law had originally adopted towards the concept of the....
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....on applicability of the said doctrine. 71. In recent times, the law has been crystallized around the six principles formulated by Munby J. in Ben Hashem v. Ali Shayif, [2008] EWHC 2380 (Fam). The six principles, as found at paragraphs 159-164 of the case are as follows- (i) ownership and control of a company were not enough to justify piercing the corporate veil; (ii) the Court cannot pierce the corporate veil, even in the absence of third party interests in the company, merely because it is thought to be necessary in the interests of justice; (iii) the corporate veil can be pierced only if there is some impropriety; (iv) the impropriety in question must be linked to the use of the company structure to avoid or conceal liability; (v) to justify piercing the corporate veil, there must be both control of the company by the wrongdoer(s) and impropriety, that is use or misuse of the company by them as a device or facade to conceal their wrongdoing; and (vi) the company may be a 'façade' even though it was not originally incorporated with any deceptive intent, provided that it is being used for the purpose of deception at the time of the relevant transactions. ....
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....ites. Firstly the court has to satisfy itself either by affidavit or otherwise that the person in relation to whom the proclamation is to be issued is about to dispose of whole or any part of the property or secondly that he is about to remove whole or part of the property from the local jurisdiction of the court. Thus the orders passed by learned MM in this regard suffer from gross illegality and inherent infirmity." 15. In the case of Kishori Devi vs. State of Bihar & Anr.: 1995(2) BLJR1430 decided by High Court of Patna, Ranchi, whereby held that "Section 83 as noticed above, contemplates that both movable or immovable properties can be attached, which belongs to be a 'proclaimed person'. The word 'belonging to the proclaimed person', in my opinion cannot be given wider sense by including the property of the family members also." Thus, the impugned order deserves to be set aside. 16. Learned APP appearing on behalf of the State/respondent submits that M/s. OIS Advanced Technology Pvt. Ltd is a shell company or the company which has been incorporated for the beneficial interest of accused Sanjay Bhandari as 90 percent share of the said company is with Sanjay Bhandari and r....
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....d Technology Pvt. Ltd. For reference, Section 84 Cr.P.C. is reproduced as under: "Section 84 Cr.P.C. : Claims and objections to attachment (1) If any claim is preferred to, or objection made to the attachment of, any property attached under section 83, within six months from the date of such attachment, by any person other than the proclaimed person, on the ground that the claimant or objector has an interest in such property, and that such interest is not liable to attachment under Section 83, the claim or objection shall be inquired into, and may be allowed or disallowed in whole or in part: Provided that any claim preferred or objection made within the period allowed by this Sub-Section may, in the event of the death of the claimant or objector, be continued by his legal representative. (2) Claims or objections under Sub-Section (1) may be preferred or made in the Court by which the order of attachment is issued, or, if the claim or objection is in respect of property attached under an order endorsed under Sub-Section (2) of Section 83, in the Court of the Chief Judicial Magistrate of the district in which the attachment is made. (3) Every such claim or objection shall....
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....., the attachment can be ordered of any property belonging to such persons means the accused therein. In the present case, the charge-sheet has not been filed, therefore, at this stage, it cannot be concluded that the company is not made an accused. 24. It is pertinent to note, even otherwise, in a case, if any person incorporated a company and purchased or transferred all properties in the name said company and thereafter leaves the country. However, while staying in abroad, he can operate the company through authorised representatives and enjoy the proceeds of same. In that eventuality, when 100% shares of the company are with an accused, proceedings under Section 82 & 83 Cr.P.C. can be initiated and executed and in my considered opinion, the property of such company can be attached. The proposition of law as argued by learned senior counsel appearing on behalf of the petitioner is applicable only in cases, where there are different shareholders and company is doing business, but in the present case 90% shares belongs to accused Sanjay Bhandari and 10% to his wife. Thus, it is a private limited company, being run by the same family only but without conducting any business, trans....