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"7. There is no dispute that under Section 446 the Company Court can pass orders in relation to the company in liquidation. The real question in issue in the case was whether the liability with respect to money due from the company in liquidation towards its workers could be fastened on an independent corporation. The Company Court has chosen to fasten liability on a third party, i.e., the PSIDC while seized of proceedings with respect to the company in liquidation (The PNFC). Was it legally permissible?
9. After drawing our attention to the legal status of the two companies involved, the learned counsel for the appellant drew our attention to the note of the Chief Minister of Punjab. It is submitted with reference to the said Note that it can neither be said to be an order of the State Government no can it has any binding force so far as the PSIDC is concerned. The submission of the learned counsel for the appellant is that the note is in the nature of a suggestion/ request by the Chief Minister and the PSIDC has no legal liability so far as the dues of the PNFC to its workers are concerned. Both the companies were separate legal entities. Though PSIDC might have been involved in promotion and thereafter in guiding the affairs of the PNFC, that is not enough to fasten the liabilities of the PNFC to the PSIDC.
10. In reply, the learned counsel appearing for the respondent-
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workers association submitted that as the affairs of PNFC are entirely managed and controlled by the PSIDC, the corporate veil has to be lifted to show that PSIDC was responsible for the acts of PNFC and liabilities of PNFC and it was therefore liable for the dues of the workers. In their application under Rule 9 of the Companies (Court) Rules the workers have pleaded that the PSIDC exercised control over financial and administrative affairs of the PNFC. It is also submitted that the fact that the PSIDC holds 46.13% shares in the PNFC shows the financial interest of the PSIDC in the PNFC. The officers of the PSIDC are also said to have been posted from time to time in the PNFC to manage its affairs. The learned counsel relied o Section 446 of the Companies act to suggest that a Company Judge has wide powers with respect to a company in liquidation. He invited reference to Sudarsan Chits (I) Ltd. v. O.Sukumaran Pillai and Ors., (1984) 4 S.C.C. 657 in support of this contention. In our view, this judgment does not help the respondent. Under Section 46 the powers of the company Judge qua company under liquidation may be wide, but that does not empower the Company Judge to pass an order making a distinct and separate corporation, a third party, liable for the liabilities of the company in liquidation. This aspect unfortunately has not been adverted to either by the learned Company Judge or by the Division Bench of the High Court."

stated that he is merely a tenant in the same and it actually belonged to respondent no.2.

It is a case where public money is at stake. The financial body which the P.S.I.D.C. having financed the collaboration agreement is naturally keen to protect its interest. Order dated 5.9.2007 puts an embargo on the sale and alienation or creating a charge on House No. 115, Sector 9- B, Chandigarh which is said to be owned by respondent no.2.

In the instant case, in my opinion, the Court is duty-bound to lift the veil and see for itself as to whether the property, in fact, belongs to respondent no.2 and and has no concern with respondent no.1 with whom a dispute is pending. If the observations of the Apex Court in Punjab State Industrial Dev.Corporation Ltd. V. P.N.F.C. Karamchari Sangh & Anr. (supra) are to be seen, which is a judgment relied upon by the learned counsel for the respondents, then it is clear that their Lordships observed while holding that PNFC & PSIDC were two separate entities and liability on account of dues of workmen of PNFC could not be fastened upon PSIDC as it was a separate company.