The Court held that a director is not liable for company dues absent a specific statutory provision. Consequently, Rule 1 in Writ Petition No. 4117 of 2009 was made absolute, dismissing the respondents' petition against the petitioner who had resigned as director.
Rule made absolute in terms of prayer (a).
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 4117 of 2009
Chandrakant Bhalchandra Garware ..Petitioner
Versus
The Union of India & Ors. ..Respondents
Mr. Prakash Shah i/b. PDS Legal for the petitioner.
Ms. S.I.Shah for the respondents.
CORAM: F.I.REBELLO AND
J.H.BHATIA,JJ.
DATE: 5th May, 2009.
P.C.
1. Rule. Heard forthwith.
2. The respondents are seeking by communication
dated 1st January, 2009 to realise from the petitioner
the dues of M/s. Garware Paints Limited.
3. To make a director liable, there has to be
statutory provision under which a director is made
personally liable for the dues of a company. This very
2
issue had come up for consideration before a Division
Bench of this Court in Sunil Parmeshwar Mittal vs. Dy.
C.(Recovery Cell), C.Ex.,Mumbai-I, 2005 (188) ELT 268
(Bom.). The learned Division Bench, after considering
the law in extenso, has come to conclusion that director
is not liable. In the instant case, the petitioner had
resigned on 1.12.1994. The bill of entry had been filed
on 19.1.1994. However, no statutory provision has been
shown under the Customs Act or for that matter under the
provisions of Customs (Attachment of Property of
Defaulters for recovery of Government Dues) Rules, 1995
making a Director liable for the dues of a company. In
our opinion, the Judgment in Sunil Parmeshwar Mittal
(cited supra) will have to be followed.
4. In the light of that, Rule is made absolute in
terms of prayer (a).
(J.H.BHATIA,J.) (F.I.REBELLO,J.)
2 issues framed by the court
Whether a director of a company is personally liable for the company's dues under the Customs Act.
Whether the Customs (Attachment of Property of Defaulters for recovery of Government Dues) Rules, 1995 make a director personally liable.
Colour shows how this judgement treated each authority
Sunil Parmeshwar Mittal vs. Dy. C.(Recovery Cell), C.Ex.,Mumbai-I, 2005 (188) ELT 268Followed¶19
Sunil Parmeshwar Mittal vs. Dy. C.(Recovery Cell), C.Ex.,Mumbai-I, 2005 (188) ELT 268 (Bom.)
1 provisions across 1 enactments
Chandrakant Bhalchandra Garware
The Union of India and Ors.
F.I. Rebello
J.H. Bhathia
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court