Ravi S.Dhavan, J. - (1.) THE petitioner before the Court is a State Corporation, namely, Uttar Pradesh Avas Evam Vikas Parishad. THE writ petition has been filed against the State, though not made a party. THE party respondent is the Collector, Kanpur Nagar, Kanpur, and the Sub-Divisional Magistrate, Kanpur Nagar, Kanpur. THE State of Uttar Pradesh ought to have been made a party and this writ petition in the absence of the State of Uttar Pradesh would be bad for non-joinder of parties. THE Court is mentioning this matter because if the State of Uttar Pradesh is arrayed as a party, then, a very peculiar situation which cannot happen and is not meant to happen will happen in this case, contradicting settled law as has been laid down by the Supreme Court. In that eventuality, that is, if according to the norms of law the State of Uttar Pradesh is a party respondent and was to be arrayed as such and if the Court were to lift the corporate veil of the personality of this State Corporation, then, the persona designata of those incharge will emerge, thus ; the Chief Secretary is the ex officio Chairman of the Corporation. THE Chief Secretary is also the head of the administration of the State of Uttar Pradesh. Is it possible that the Chief Secretary would permit this writ to be filed against the Chief Secretary? This aspect was the subject matter of a very serious concern by the Supreme Court in the matter of Oil and Natural Gas Commission and others v. Collector of Central Excise, JT 1991 (4) SC 158. Lifting the corporate veil of a corporation is a known concept in corporate law to find out the personality of a corporation in civil law. Very recently this principle has been applied to determine liability in criminal law also, Delhi Development Authority v. Skipper Construction Company (P.) Ltd., AIR 1996 SC 2005.
(2.) THE essence of the decision of the Supreme Court is that the State should not be seen in litigation between its constituents. THE Supreme Court noticed that there was a bad tendency of departments of the State fighting with another department of the State or a State Corporation taking up an issue with the State. This reflects badly on the administration and rather that certain matters of public policies be made an issue by the State itself, such litigations should not be encouraged. It was held that it would be best that before a litigation enters a Court with two departments in lis or a State Corporation with the State, it would be best that a Committee specially constituted resolves issues so that such matters are kept out of Court. A Division Bench of this Court also had an occasion to reflect on a similar situation when another State Corporation filed a writ petition against the Sales Tax Department. This was the matter of Pradeshiya Industrial and Investment Corporation, U. P., Ltd., PICCUP Bhawan, Lucknow v. Deputy Collector (Collection/Sales Tax), Nainital and others. Writ Petition No. 1135 of 1993, decided on 6th July, 1993. The standing counsel, Mr. Krishna Prasad, at the outset raised a preliminary objection that he has instructions to oppose this writ petition as not being maintainable for more than one reason. In so far as the counter-affidavit filed on behalf of the respondents is concerned, i.e., on behalf of the Collector and the Sub-Divisional Magistrate, it is shabby. But, the standing counsel intimated to the Court that he has clear instructions to oppose the petition by giving the background that what in fact is the subject matter of recovery is otherwise a direction in a pending first appeal before the High Court arising out a reference decided by the Additional District Judge in land acquisition cases where the Division Bench in the first appeal has given directions, to the effect, that fifty per cent of the compensation be deposited within a certain time. This direction was to be complied with by the U. P. Avas Evam Vikas Parishad. The direction was not complied within the time given by the Division Bench in the first appeal. Subsequently, when the period during which the order was to be complied with was over and the deposit was not made. The U. P. Avas Evam Vikas Parishad made an application in the First Appeals (First Appeals Nos. 39 of 1993, 40 of 1993 and 41 of 1993) by seeking a prayer that further time be granted to comply with the orders of the Division Bench for depositing the fifty per cent of the compensation.
(3.) CLEARLY, seeking further time to make the deposit implies that the order would be complied, but a little more time is required. Acquiesing to comply with the order was an undertaking placed on record of the first appeals which are pending before a Division Bench. In those first appeals, the State of Uttar Pradesh is one of the respondents. The application seeking further time to make the deposit of fifty per cent of the compensation is still pending consideration before the Division Bench. An aspect which is clear on the record of the first appeal needs to be noticed that proceedings of like nature have already been before the Supreme Court. These were cases from Uttar Pradesh. A copy of the order of the Supreme Court dated 23 October, 1992 is appended as Annexure 1 to the writ petition to the application of the U. P. Avas Evam Vikas Parishad. The contents of which are reproduced below: "IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (CIVIL) NO. 7818 OF 1992 Meerut Development Authority Petitioner Versus Nawab and others Respondents. ORDER By order dated 27.11.1991, the High Court directed the Government to pay one half of the decretal amount. We are of the view that one half of that amount should be paid in cash and for the balance a bank guarantee should be furnished. There will be an interim stay in respect of the remaining 50% of the decretal amount. The amount which has to be paid in cash, as aforesaid, has to be paid to the respondents within one month from the date of receipt of a copy of this order. The special leave petition is, accordingly, disposed of. Sd./- (T. K. Thomman) Sd./- (K. Jayachandra Reddy) New Delhi. 21st September, 1992." ;