Venture Global Engineering v. Satyam Computer Services Ltd.
- 2022-02-17
Citation: 1996 AIR 2005
Facts: A plot of land was put to auction by the Delhi Development Authority [D.D.A.] in October 1980. Skipper Construction Company [Skipper] offered the highest bid in A sum of Rs. 9.82 crores. It was supposed to be a record bid at that time. According to the conditions of auction, twenty five percent of the amount was payable immediately and the rest within ninety days. Skipper deposited the twenty five percent but did not deposit the balance. It asked for extension repeatedly and it was granted repeatedly. As many as seven extensions were granted spread over the period January, 1981 to April, 1982.
Since Skipper failed to deposit the balance consideration even within the last extended period, proceedings were taken for cancelling the bid. Skipper went to Court and on May 29, 1992 obtained stay of cancellation*. D.D.A. applied for vacating the stay. Nothing happened but usual adjournments. Skipper was simultaneously making representations to D.D.A. to give him further time. In January 1983, D.D.A. constituted a committee to consider the request of Skipper and other similar requests and to devise a formula for ensuring timely payments by such purchasers.
Issue: Whether corporate veil can be lifted in this case?
Judgement: The court held that in a situation wherein there is an involvement of this doctrine, there is a need to disclose the members and the directors of the company. They are liable for the obligations ignoring the concept of separate legal entity of the company.
It was held that the idea of independent substance was endorsed to the organization for to energize exchange and trade however it is rather being utilized to submit illicit and unseemly activities. The corporate cover obviously can be punctured when the corporate personality is seen to be against equity, comfort and enthusiasm of the wage or worker or against public interest.
