Important case laws of lifting of corperate veil

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1-Jones v. Lipman,(1962) I.W.L.R. 832

                     (prevention of fraud)

   Lipman agreed to sell a land to Jones in a agreement later on his mind changes and he don't wanna sell so for avoiding the agreement he incorporated a company and transferred land to it.

When the matter went to court than the decision came was here we lift the corperate veiland look the real person behuind the name of comapany and the corperate personality feature will be ignored as the company was not doing any business it was only formed for the purpose of fraud.

2-Dailmer co. ltd v.Continental tyres and rubber co.,(1961) 2 A.C.307

                        (determining enemy character of company or trading with enemy)

A german company incorporated a company in england whose all the shareholders were german residents trade with another company of england during the war period.
some trade debt were left which the england company refused to pay. 
When the matter went to court the judgement came that it was an alien company since the company is incorporated in england but the real persons behind the company are germans. hence this is the case of trading with alien enemy.

3-Sir Dinshaw Manakjee Petit,A.I.R. 1927 Bombay 371

                               (tax evasion)

Mr. Dinshaw incorporated 4 pvt. companiesin which he invested all his investments hence the company have return +dividend but the company was not doing any business and he pretended loan to Dinshaw which was never repaid.
when the matter went to the court than the judgement came that all 4 companies was not other than Mr.Dinshaw and the company formed was just for distribution of income for the purpose of tax evasion. 

4-Kapila Hingorani v. State of Bihar,2003(4) scale 712

                            ( Ignoring of legal obligations)

Here the petitioner alleged that sytate of bihar has not paid salaries to his employees in PSUs etc. for long period resulting to starvation  deaths.
the court observed that state may not be liable for daily activities .
it is found that a company has abused its corperate personality for an unjust an inequitable purpose,the court give the order to lift the corperate veil.




Code to learn the above case laws

  1. Jones ne kiya lipman k sath dhokha
  2. aur Dailmer ka ho gya uski enemy rubber co. k sath roka.
  3. Dinshaw maneckjee ne diya revenue to nation.
  4. and rubber industry ne avoid kiya legal obligation.


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