Case: M/S. Sardesai Transhippers Private Limited Vs. The State of Goa, Through The Ministry of Surface Transport and Inland Water, Panaji, Goa and Others

T.K. CHANDRA SHEKHARA DAS, J.As a common grievance arise in these two writ petitions, though the petitioners are different, we are proposing to dispose of these matters with a common Judgment.2. The petitioners are limited companies. The petitioners in Writ Petition No. 10 of 1996 own a barge, called as "MAHAMAYA" and petitioners in Writ Petition No. 202 of 1996 own a barge by name "MAHADURGA". These petitioners Companies, as usual applied for survey certificates under section 9 of the Inland Vessels Act, 1917, enabling them to ply those vessels in the inland waters of Goa. When the petitioners in Writ Petition No. 10 of 1996 applied for the survey certificate, though the survey was conducted, the certificate was not issued by the authorities, whereas in Writ Petition No. 202 of 1996, the authorities refused to carry out survey of the vessel at all. According to the petitioners, they satisfied all the conditions as stated in section 8 of the Inland Vessels Act and the Masters and the Engineers of these vessels are also certified to be having requisite qualifications. Therefore, the petitioners contention is that the respondents have no authority either to withhold the survey certificate or to deny carrying out survey of the vessels. 3. The respondents filed their reply to the writ petitions. The only ground for withholding the survey certificates and denying the survey, as stated in the reply is that one M/s. Sardessai Engineering Works, which is a partnership firm, defaulted to make payment to the Port Authorities by way of lease rent, which comes to about Rs. 13,00,000/- and that one Mr. Prakash Dessai, who is the Managing Director of both the petitioners Companies is also the partner of the aforesaid M/s. Sardessai Engineering Works. Therefore, it is contended by the respondent that in all practical purpose, all these Institutions are one and the same and because of the default of the firm, it should be treated as default of the Company and, therefore, it is justified in withholding the survey certificate in Writ Petition No. 10 of 1996 and denying to conduct survey of the vessel in Writ Petition No. 202 of 1996.4. We do not consider the objection raised by the State Government to be based on any sound principle of law and reasons. It is a well known principle in corporial law that a share-holder and the Company are two different entities. The company cannot be made liable for the default of the shareholder or the fault of his director individually. Of course, we are aware that in certain circumstances under the Company Law or under food Adulteration Act, etc., due to the fault of the Company, sometimes, the Director of the company may be liable, but in any circumstances it is not vice-versa. Therefore, for any remittance to be made by Prakash S. Desai in his individual capacity or as partner of the aforesaid firm/the petitioner Company, of which he is the Managing Director, cannot be made liable and for that reason, the Government is not justified in withholding the survey certificate or denying to carry out survey of the Vessels, in question. For this simple ground, the objection raised by the State Government is liable to be over-ruled.

Decision:
1[ds]4. We do not consider the objection raised by the State Government to be based on any sound principle of law and reasons. It is a well known principle in corporial law that aand the Company are two different entities. The company cannot be made liable for the default of the shareholder or the fault of his director individually. Of course, we are aware that in certain circumstances under the Company Law or under food Adulteration Act, etc., due to the fault of the Company, sometimes, the Director of the company may be liable, but in any circumstances it is notTherefore, for any remittance to be made by Prakash S. Desai in his individual capacity or as partner of the aforesaid firm/the petitioner Company, of which he is the Managing Director, cannot be made liable and for that reason, the Government is not justified in withholding the survey certificate or denying to carry out survey of the Vessels, in question. For this simple ground, the objection raised by the State Government is liable to be