ABSTRACT
“Corporate crime is a conduct of a corporation or its employees acting on behalf of the corporation, which is prescribed and punished by law”.[1]
– J. Braithwaite
The principle that the company is an artificial person having a separate legal entity from that of its shareholders and members forms the basic foundation of corporate governance.[2] The concept of piercing of corporate veil provides substantial justice to this foundation by making the individuals personally liable for their wrongful acts. Although the theory is widely accepted across jurisdictions, it is not accustomed to situations where shareholders try to evade their personal liability by taking advantage of the corporate shield. The evasion can eventuate by transferring personal properties or funds of the shareholder to the corporation or from a subsidiary to the parent company. In such situations, the personality to be punished is baffling and traditional piercing is not suitable to handle such instances. Therefore, the doctrine of reverse piercing has evolved to deal with the changing corporate trends. This doctrine makes a corporation’s assets liable for the shareholder’s personal liability. It’s crucial to understand that, the conventional vision of not holding the corporation accountable has to be overshadowed. The aim of this article is to identify the meaning of reverse piercing and its applicability in India by critically analyzing the concept and existing challenges to reverse piercing. In conclusion, the article tries to provide a way forward by introducing an integrated approach to the doctrine that will allow it to craft its position in the existing legal system.
INTRODUCTION
The tribulations of multifaceted economic realities cannot be addressed by the parochial observance of separate legal entities.[3] This has lead to the unfolding of ‘Reverse Piercing of Corporate Veil’. In simple words, it can be defined as, the charge on a corporation’s assets to satisfy debts of third parties occurring due to the shareholder’s wrongful act. The major difference between the traditional and the reverse piercing is that in the former, the individual was held liable for the wrongs committed, whereas in reverse piercing the corporation as a whole is held liable for the acts of the individual. The emergence of the doctrine of reverse piercing has witnessed a shift from the concept of single patrimony to common patrimony, thus disregarding the corporate principle of a separate legal entity and subsuming the personality of the corporation with that of its shareholders.
The corporate concept of legal entity flows from the subject of asset partitioning. The concept of asset partitioning means drawing a fine distinction between the assets of the corporate from that of the owners/shareholders.[4] It helps in the protection of the assets of the corporate from the creditors of the owner/shareholder and vice versa. The former is known as affirmative asset partitioning and the latter is known as defensive asset partitioning. This establishes the separate legal entity concept and is considered as “the sine qua non of the legal entity.”[5] The doctrine of reverse piercing of corporate veil defeats this concept of asset partitioning as it does not differentiate the liability of assets on the basis of the creditors, but it makes the corporation liable even for the wrongful acts of the shareholder. Thus, a shift from the traditional concept of separate form to the blurring of lines of corporate entity has been witnessed in the recent years.
This shift was recognized by the courts of the United States of America for the first time and therefore, it is also said to be of American origin.[6] The courts in the United States welcomed the doctrine and introduced it in the legal jurisprudence, intriguing the courts of other countries to determine the concept of reverse piercing and delve into its applicability. This further led to the emergence of various tests, majorly by US courts, to establish the applicability in the cases that come before the court dealing with such issues, due to the lack of an already existing legal jurisprudence or a specific law. The doctrine is not yet applied plainly in India by the courts and there are instances where the Indian courts prima-facie rejects to accept the doctrine of reverse piercing.
Due to the lack of acceptability and the rigid approach of the Indian courts, the question in relation to the applicability and implementation of the doctrine of reverse piercing has remained in question till date. The Indian courts have not been able to determine certain specific guidelines or tests that can be followed for the smooth implementation of the doctrine in the legal jurisprudence, as is done by the other courts of different jurisdictions, such as Unites States of America and Singapore. The problem of a non-existent governing law in India further amplifies the dilemma relating to the determination and implementation of the said doctrine. Therefore, taking into consideration the rapidity of the increase of the doctrine and its acceptance all over the world, it is of utmost importance to at least consider the doctrine and lay down certain specific guidelines or tests that can act as a tool for aiding the Indian Judiciary in implementing the doctrine.
The research objective of the article is to undertake the jurisprudential analysis of Reverse Piercing, its viability in India and the way forward. The paper applies a combination of a variety of legal research methodologies. Firstly, Analytical legal research methodology has been used to break down the concept of reverse piercing as it currently exists. Qualitative legal research methodology has been used to examine legal jurisprudence that has been developed by the courts over the years. Lastly, Comparative legal research methodology has been used to compare Indian jurisprudence with the elements of foreign law. The usage of this method includes comparing the stance taken by Indian courts with the United States of America (USA), where the doctrine was first evolved, the European States and Singapore, where it has been interpreted recently. The legal research methods undertaken will be beneficial for examining and analyzing the concept and to lay down the meaning of reverse piercing, its difference from traditional piercing, its advantages and limitations and lastly, the feasibility of the doctrine in India. The methodology adopted will also be useful in tapping various information resources that have developed in the field of reverse piercing by carrying out qualitative and comparative research. The legal research methods adopted in the paper will further help to pave the way forward for the successful implementation of the doctrine in India.
The research revolves around the concept of reverse piercing, its existing implementation challenges in India and the analysis of the various tests laid by different jurisdictions with the objective of paving a way for India to move forward and to determine a test that best suits its peaceful implementation. Henceforth, the research questions are:
1. What is the present position of India regarding reverse piercing of corporate veil and the challenges, if any, faced in its implementation?
2. What is the position of other countries regarding the doctrine of reverse piercing of the corporate veil?
3. Whether a specific test should be laid down to determine the question of implementation of the doctrine in India?
CHAPTER OVERVIEW
The article is categorized into three parts. The first chapter titled ‘The Reverse Piercing Doctrine – Its Position in India’ discusses the concept of reverse piercing stating the meaning of reverse piercing, its types and its differences from the traditional veil piercing. This part also highlights the existing challenges in the implementation of the doctrine in India and deciphers the jurisprudence available in India regarding the concept of reverse piercing.
The second chapter titled ‘Application of Reverse Piercing Doctrine – Comparison with Foreign Jurisdictions’ discusses the doctrine under various other jurisdictions such as the Unites States of America, European Countries and Singapore. This comparative analysis through case laws will help in recognizing the various factors and guidelines that are adopted by the foreign jurisdictions for the smooth implementation of the doctrine.
The third and final chapter titled ‘A Practical Way for Future-Mapping’ deals in detail with the various tests as discussed in the article. This concluding chapter determines the tests that can be applied in India by underlining the need to develop and adopt a fusion test to ensure better evaluation and implementation of the doctrine.
1. THE REVERSE PIERCING DOCTRINE – ITS POSITION IN INDIA
a. MEANING OF REVERSE PIERCING
The meaning of reverse piercing is the start of analyzing the framework of the applicability of the doctrine in India. The company law does not define the term ‘reverse piercing’ but it has been defined by various authors as the tool by which the courts can make the corporation legally responsible for wrongful acts of shareholders. It gives power in the hands of the creditor to make the assets of the corporation liable rather than that of a single shareholder, thus making it different from the traditional piercing.
In traditional piercing, the veil is pierced to impose liability on single shareholder for wrongful acts committed by him, as differentiated from the reverse piercing, wherein the company as a whole is held liable for the wrongful acts of one or more shareholders. Hence, a paradigm shift can be seen in terms of the change from separate patrimony to a common patrimony. While in a separate patrimony, the company was seen as a different entity from that of its shareholders, and thus, the company was not held liable for any fraudulent or malafide act of the shareholder, but in common patrimony, the company is held accountable even for the acts of shareholder, leading to harm the doctrine of the separate entity as envisaged in the Indian jurisprudence on the basis of the landmark judgment of Salomon v. Salomon.[7] Thus, it can be said that “The doctrine of reverse piercing is the anti-thesis of traditional piercing.”[8]
b. TYPES OF REVERSE PIERCING
The doctrine of reverse piercing is further categorized in two types, i.e., “inside reverse piercing” and “outside reverse piercing”, depending upon the relationship of the party and the corporation.[9] The types of reverse piercing were first introduced and discussed in detail by the court of California, in the case of Postal Instant Press Inc v. Kaswa Corporation[10], where a distinction was marked between the two on the basis of the party bringing the claim.
Insider Reverse Piercing – The insider reverse piercing includes the claims that are filed by an internal individual of a corporation, like a shareholder or the owner of the corporation, to make the assets of the corporation liable for the wrongful acts of an individual.[11] Here, the shareholder files such a claim with an intention to forgo his liability and to impose the same on the corporation. In such cases, many courts have disallowed the reverse piercing of the corporate veil[12], as the disregard of corporate entity in such cases would lead to greater harm to the innocent third parties having an interest in the corporation.
Outside Reverse Piercing – These claims involve, piercing by third parties, to satisfy their debts by bringing a claim against the corporate assets for the act of one or more shareholder(s).[13] This is also known as “third-party reverse piercing”.
In Jhaveri Darsan Jitendra v. Salgaocar Anil Vassudeva[14], the court categorically differentiated between inside and outside reverse piercing, stating that “In the former, the shareholder invites the court to disregard separate legal personality of the company and in the later a third party invites the court to disregard separate legal personality of the company and to hold the company liable for the shareholder’s obligations.”[15]
c. IMPEDIMENTS TO IMPLEMENTATION OF REVERSE PIERCING IN INDIA
The Indian courts have a divided opinion on the application of the doctrine, with the majority being reluctant to apply it,[16] due to several limitations, like harm to innocent shareholders, third parties and creditors. Moreover, in NEPC (National Energy Processing Company) India Ltd. v. Securities and Exchange Board of India (SEBI)[17], the tribunal while determining the question on reverse piercing observed that “the doctrine of reverse piercing is outlandish and inconceivable.”[18] This hesitation by courts to consider the applicability of the doctrine is due to the deep-rooted corporate principle of “separate legal entity”.
The two most important cases, where Indian courts dealt with the dogma are State Bank of India v. Kingfisher Airlines[19] and Punjab and Sind Bank v. Skippers Builders Pvt. Ltd.[20] In the former case, considering the recovery of debt from Vijay Mallya, the doctrine of reverse piercing was applied to make the personal and company assets of Vijay Mallya liable on the ground that he was the chief promoter of the companies and was controlling all the companies single-handedly, thus making all the companies as one. In the latter case also, the company was held liable instead of a single person by applying the doctrine of reverse piercing on the ground that the single person was responsible for the control and management of the company, thus making them a single entity.
Thus, the above cases make it clear that the courts in India do not plainly accept the doctrine, but the jurists try to find its shadowed presence in the concept of vicarious liability and alter-ego. The doctrine means that there is a principal-agent relationship between the corporation and shareholders, and therefore, the corporation should be held liable for the wrongful acts of shareholders committed under the shield of a corporate, in the same way as the principal is held liable for the acts of the agent. Indian courts have always been restrictive in their approach with regard to the doctrine and reluctant to even appreciate its applicability in corporate matters due to, firstly, the deeply engraved “concept of corporate entity”, secondly, due to the absence of mens-rea (guilty mind), thirdly, due to inability to confer penalty of imprisonment and fourthly, due to the mindset that corporations are non-living personal and can only function through human beings, i.e., the owners/shareholder’s and therefore, any wrongful acts of a corporation can only be attributed to living persons.
The landmark cases of Standard Chartered Bank v. Directorate of Enforcement[21] and Aneeta Handa & Ors. v. Godfather Travels[22], have manifested the implied initiation of the doctrine into the Indian legal system. In both cases, the courts held the corporation can be held liable for their wrongful acts even if the business of the corporation is handled by a group of persons. This was the first open approach adopted by the courts to consider the entities as a separate body corporate and to recognize the concept of holding the corporation accountable for the criminal acts of an individual. But the courts have done so by not simply applying the doctrine of reverse piercing but by using the foundation of alter-ego and corporate piercing together, or by taking into consideration the provisions of the Indian Penal Code.
Therefore, the Indian courts are restrictive in their approach and reluctant to even appreciate the applicability of the doctrine of reverse piercing but on the other hand, the courts have wholeheartedly accepted the existence of the doctrine and applied it to matters relating to a property, matrimonial disputes, corporate crimes, tax, bankruptcy and tort, as evident from the cases discussed above. Therefore, the reluctance of the Indian judiciary to explicitly recognize the concept can be attributed to the various impediments that follow the doctrine of reverse piercing;
- Injustice to Innocent Shareholders
The funds in a corporation are invested by numerous shareholders and reverse piercing of the veil would expose the investments of the non-culpable shareholders[23] for the satisfaction of a shareholders debt or some third party debt.[24] This will cause injury to the shareholders, and specifically, the minor shareholders who will have to give up their shares and assets in the company to repay any debts of the third party or the major shareholder.
- Prejudice the Rights of Creditors
A corporation has various creditors, who invest in the company with the aim of receiving certain profits or with the aim to grow their business. If the doctrine of reverse piercing is allowed then along with the corporation’s assets, the assets that are pledged by the creditors would also be traded to satisfy the claim that is unrelated to the corporation as a whole. This would impact the keenness of creditors to lend loans, discrediting the ability of the corporation to incur debts or raise capital.[25]
- Injustice to Third Parties
A company is regulated by primary and secondary constituents;[26] the latter are known as the third parties such as the employees, customers, workers and the community in which the corporation operates.[27] The effect on a corporation’s viability may intangibly affect these secondary constituents, in terms of reduced workforce, charity and support from the community.
- Hindrance to Commercialization
The unforeseen exposure to reverse piercing and attaching of corporate assets may reduce the investor’s faith in the company’s standing and deter investments, leading to a closed economy.[28] If the doctrine of reverse piercing is allowed, then it might lead to the situation of shifting from an open to a closed economy, as the foreign financial institutions may withdraw the investments from Indian companies because of the fear of losing their resources and assets at the behest of the said doctrine.
- Overlook the Corporate Entity
“The corporation is considered as a separate legal entity due to the corporate personality that is conferred by law.”[29] The settling-off of an individual’s debts with the corporate assets blurs the lines of the corporate form by disregarding the distinction between an artificial and a real person. If the doctrine is made applicable, then in such case the blurred lines would harm the corporate principle of separate legal entity by subsuming its corporate form with that of an individual.
As discussed above, the doctrine of reverse piercing is prevalent in Indian jurisprudence but not in its plain form, but rather in the form of some other doctrine or principle of corporate law or any other provisions of law as can be applied to such specific cases, due to the challenges that are faced by the innocent shareholders or creditors or third parties or to the economy or the corporation. The cases cited do not move towards the solution to the challenges rather they simply ignore the existence of any such doctrine. Therefore, it is of utmost importance to address the issue of its applicability.
2. APPLICATION OF REVERSE PIERCING DOCTRINE COMPARISON WITH FOREIGN JURISDICTIONS
a. POSITION IN UNITED STATES OF AMERICA
The United States of America (USA), was the first country to have seen the earliest application of reverse piercing in Alfred Booth v. Jeremiah Bunce[30], wherein the New York court made the parent and subsidiary company liable for the debts of the creditors on the ground that the owners of the parent company had transferred its funds to the subsidiary company, thus considering the corporation an alter-ego of the owners and making the companies liable for acts of an individual. The US Courts had held the same view in, In Re DiLoreto[31], where various corporations were held liable on the ground that even after having different owners on papers, the corporations were in control of a single person. Thus, the courts in the US are not reluctant like India in the application of the doctrine if facts so demand for.[32]
One of the landmark cases for applicability of the doctrine in the US is, FMC Finance Corp. v. Murphee[33], wherein the court introduced a three-prong test to determine the applicability. The test consisted of three elements, i.e., degree of control acts leading to improper or fraudulent purpose leading in the violation of a legal right of the plaintiff. The court categorically laid down these three elements and discussed in detail each one of them. The first relates to the ‘degree of control’, which states that it is the duty of the court to determine whether the acts of the corporate and the individual are subsumed in such a way that it is impossible to make any one of them liable, and on the basis of such determination if the acts cannot be categorized separately then make the corporation liable as a whole. Secondly, the courts would look into the acts of the corporation to determine whether the acts were done or being carried on for some ‘fraudulent or irregular purpose’; if so then the corporation would be held liable even if the acts were of some specific individual. Thirdly, the court needs to assess whether any kind of damages has occurred to the person bringing the claim. The court further held that if all elements are satisfied, then the court would have no option but to apply the doctrine.
In the recent case of 2021, the Supreme Court of Delware permitted to apply the doctrine in the case of Manichaean v. Exela[34], and held that if the case is filed by a third party due to some violation of his legal right and that the facts of the case fulfill the elements of traditional veil piercing, then in such cases, the court can reverse pierce the veil. Another important aspect that the court considered was that even if the abovementioned essentials are satisfied, the court would weigh the effect of reverse piercing on one hand with the interests of the innocent shareholders and creditors on the other. The court would try to balance out the interests of such persons with the interest of the third party, and if in the view of the court, a balance is struck between the two interests, then in such case the court would reverse pierce the veil to satisfy the third party.
Therefore, when it comes to USA and India, it can be clearly seen that US courts have been open to the idea of introducing the budding doctrine and are taking initiatives for its smooth implementation, but India on the other hand is reluctant due to the impediments discussed in chapter 1. The US courts have tried to analyze the different situations where the veil can be pierced, such as, where a balance between the interests of several parties is met, where the company acts only as an alter-ego of the individual who has the actual control of the corporation, where a subsidiary company is created for the benefit or fraudulent transfer of property by the parent company. Thus, it can be said that US courts have adopted a progressive view as compared to India.
b. POSITION IN EUROPEAN STATES
The position of the European States is similar to that of India, as they also have a rigid stance. The courts in Europe have held in several cases, like Macaura v. Northern Assurance Company Ltd. and Others[35], Tunstall v. Steigmann[36], and Prest v. Petrodel Resources[37] that the English Law does not support the doctrine of reverse piercing due to the lack of availability of any authority and precedence in the English Jurisprudence. They further held that if the doctrine is invoked then in such a case, it would harm the corporate principle of ‘separate entity’, the interests of innocent shareholders and creditors and other third parties that might have interest in the corporation.
In the case of Macaura, the insurance company had rejected to lend money for the loss suffered by the petitioner’s company, even though he was the sole owner, on the ground that the policy was not in the name of the company but in the name of petitioner. The court sustained the contention of the insurance company and stated that the doctrine cannot apply on the ground of a “separate legal entity”.
Similar to this, in the matrimonial dispute under Prest case, the wife had claimed money out of the property of the husband’s company stating that he is the sole owner. The court went on to first explain the difference between concealment and evasion. The judge stated that the corporate veil can be lifted in cases of evasion where the person is trying to evade the legal consequences or fraud and not in cases of concealment. Thus, he held that the case did not fall under evasion o the ground that the husband had not started the companies in order to evade the legal divorce proceedings and therefore, the assets of the husband’s company cannot be held liable in the case and cannot be transferred to the wife.
The analysis of Prest shows that the terms concealment and evasion are analogous to reverse piercing and traditional piercing and the reluctance of the judge to even use the term reverse piercing and his apprehensiveness to apply the doctrine on the ground of corporate form.
c. POSITION IN SINGAPORE
The Singapore High court has viewed the doctrine of reverse piercing in Jhaveri Darsan Jitendra & Ors. v. Salgoacar Anil Vassudeva and Ors.[38], where the claim was bought by a shareholder to reverse pierce the corporate veil by stating that the company’s assets ought to be treated as his own personal assets. After considering the facts and the circumstances of the case, the court stated a clear demarcation between the three types of veil piercing. First being the “Standard Piercing”, where the individual shareholder is held liable for his criminal acts, and second being the “Outside Reverse Piercing”, where the corporation is held liable for the acts of an individual on the claim by a third party and lastly, “Insider Reverse Piercing”, where the corporation is held liable for the act of an individual when the case is filed by a shareholder.
The court accepted the first two kinds of piercing but was reluctant to ignore the principle of “separate economic entity” with regard to the third kind of piercing, i.e., “Insider Reverse Piercing”. It stated that the third kind is not supported by any authority of the Singapore courts or under the Singapore laws. The court placed reliance on the English cases of Macaura v. Northern Assurance Company Ltd. and Others[39] and Tunstall v. Steigmann[40] to reject the claim of the plaintiff and further held that the third kind of piercing is in contravention of the principle of traditional piercing, as it allows the shareholder to hide behind the corporation.[41]
The Singapore Courts do not have much jurisprudence on the reverse piercing of the corporate veil[42], and the abovementioned case is the most recent. If we have a closer look and analyze the decision, it is a very reasoned judgment.[43] The court has disallowed the shareholder to take advantage of the wrongful acts committed by him in the name of a corporation. Thus, the court has provided the rights in the hands of only the third parties who would not be aware of the functionality of a corporation in the true sense and could be put at a disadvantage due to the overt acts of the shareholder alone or by the shareholder in the wake of the corporate.
Therefore, while comparing the foreign jurisprudence with India, it can be said that the European Courts are reluctant just like India to introduce the doctrine of reverse piercing in its legal system, whereas the Singapore Courts are reluctant to introduce only the insider reverse piercing which can harm the corporation’s reputation and assets due to the wrong committed by the shareholder and the US Courts have openly commenced the execution of the growing doctrine so as to deal with specific cases that cannot be dealt with the present law.
3. A PRACTICAL WAY FOR FUTURE MAPPING
a. TESTS DERIVED BY DIFFERENT JURISDICTIONS
- Two-prong test
Washington was the first jurisdiction to adopt the doctrine of reverse piercing in W.G. Platts v. Platts[44], where the court applied the ‘two-prong test’, consisting of two elements that must be proved so as to apply the doctrine. Firstly, personality integration of the corporation and an individual person[45], the circumstances in which the acts of the individual owner and that of a corporation cannot be distinguished. This element is also termed as the instrumentality, agency, integrated enterprise and unitary interest test or in simple terms the doctrine of alter-ego by various courts.[46] Secondly, the act done by the corporation alone would result in an ‘inequitable result’ or ‘fraud’ or ‘injustice’ to the third parties.[47]
- Three-prong test
The three-prong test is the extension of the two-prong test, which is used for analyzing the cases of traditional and reverse piercing in Colorado.[48] In the case of State v. Easton[49], the court observed the three elements that have to be satisfied in order to reverse pierce. The first two elements are the same as included in the two-prong test and the third element introduced determines the extent of damages leading to the violation of a legal right of some third party due to the ‘degree of control’.[50]
- Equitable Results Approach/ Weighted Approach/Balancing Approach
The courts in Colorado discovered that the applicability of the doctrine of reverse piercing can negatively impact innocent shareholders and creditors.[51] Therefore, the Supreme Court in the case of In re Phillips[52], introduced equitable results approach, wherein the doctrine would be applied only if it does not harm the innocent shareholders, creditors or any other third party. This doctrine aims to achieve equitable results both for the plaintiff and the third parties by balancing and weighing the interests of all the interested parties.[53]
- Carefully Circumscribed Reverse Piercing Rule
In Manichaean v. Exela[54], the Delware court permitted the reverse piercing of the corporate veil and laid down the abovementioned rule, stating that the veil can be pierced in reverse gear if the following elements of the above rule are satisfied, i.e., factors of traditional veil-piercing, no alternate remedy with the third party and no harm to the innocent shareholders or creditors.
b. CONCLUSION – A WAY FORWARD
With the increase in the multifaceted economic realities and the blurring of lines between the principles of a separate corporate entity, the doctrine of reverse piercing cannot be ignored by terming it “too radical” or “not compatible” with principles of company law. The doctrine should be given full consideration just like the traditional veil piercing. This emerging doctrine can also find its place in the company law by becoming another exception to the corporate principle of a separate entity, just like the doctrine of traditional piercing.
The Indian courts cannot act reluctant for long, as the doctrine is emerging at a fast pace. The US courts have also recognized the fact that where the law is ambiguous or is not well defined to deal with such circumstances, then the courts should consider the doctrine of reverse piercing.[55] In my opinion, the implementation should not form a general rule, but only an exception to the general rule of “separate legal entity”. Indian courts should also consider an appropriate approach towards the implementation of the doctrine and more specifically the one laid down in the case of Manichaean v. Exela[56], as it includes not only the elements of traditional piercing but also considers the extent of harm caused to the innocent parties. Such type of guidelines can help fight the challenges prevalent in India as discussed in the article. The acceptance of doctrine would further strengthen our legal system by arming it to deal with the specific deceptive cases where the acts of the individual or the company as a whole are criminal in nature.
In my opinion, any one test cannot be applied to all circumstances due to the difference in facts in each and every case that crops up in the court of law. Therefore, a fusion test should be adopted by India, as it includes the various factors incorporated under the different tests that has been applied by the courts of different jurisdictions. The fusion test would include the following tests, degree of control test, alter-ego test, public policy test, equitable consideration test and the balancing test. All these tests considered together would eliminate the various obstacles and further help the courts in India to clear the cloud of confusion and reluctance and help them determine the cases in which the doctrine of reverse piercing can be applied. Also, the fusion test would ingurgitate the limitations of all or any one of the tests and make it more bullet-proof to leave no room for further impediments in the implementation of the doctrine in India.
BIBLIOGRAPHY
a. PRIMARY SOURCES – Legislation and Case Laws
1. The Companies Act, 2013
2. Alfred Booth v. Jeremiah Bunce, 33 N.Y. 139 (N.Y. 1865)
3. Aneeta Handa & Ors. v. God-father Travels, (2012) 5 SCC 661
4. Commissioner of Environmental Protection v. State Five Industrial Park Inc., 304 Conn. 128 (Conn. 2012)
5. FMC Finance Corp. v. Murphee, 632 F.2d 413 (5th Cir. 1980)
6. In re Barcelona Traction, Light and Power Co Ltd, (1970) ICJ 3
7. In Re DiLoreto, 266 Fed. App’x. 140 (3d Cir.: 2008)
8. In re Phillips, 139 P.3d 639 (Colo. 2006)
9. Jhaveri Darsan Jitendra v. Salgaocar Anil Vassudeva, [2018] SGHC 24 at [47]
10. Macaura v. Northern Assurance Company Ltd. and Others, [1925] AC 619
11. Manichaean v. Exela, A. No. 2020-0601-JRS (Del. Ch. May 25, 2021)
12. NEPC (National Energy Processing Company) India Ltd. v. Securities and Exchange Board of India (SEBI), (2003) 3 Comp L.J 170 SAT
13. Postal Instant Press Inc v. Kaswa Corporation, 162 Cal. App. 4th 1510, 1520-24, 77 Cal. Rptr. 3d 96 (2008)
14. Prest v. Petrodel Resources, [2013] UKSC 4 at [35]
15. Punjab and Sind Bank v. Skippers Builders Pvt. Ltd, 2016 SCC OnLine DRAT 1
15. Salomon v. Salomon, [1896] UKHL 1
16. Standard Chartered Bank v. Directorate of Enforcement, AIR 2005 SC 2622
17. State Bank of India v. Kingfisher Airlines, Debts Recovery Tribunal, (Karnataka, Bangalore), SBIKingfisher Airlines Ltd., OA No. 766 of 2013, decided on January 19, 2017.
18. State v. Easton, 169 2d 282, 289, 647 N.Y.S.2d 904, 909 (Sup. Ct. Albany Cnty. 1995)
19. Tunstall v. Steigmann, [1962] 2 QB 593
20. G. Platts v. Platts, 298 P.2d 1107 (Wash. 1956)
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- Online Journals/Working Papers
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9. Mark A Olthoff, ‘Beyond the Form – Should the Corporate Veil Be Pierced’ (1995) 64:2 UMKC L Rev 311, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/umkc64&i=319>
10. Masoom Agrawal and Vaidehi Pareek, ‘Piercing through the Corporate Veil’, 2019 2(2) IJLMH, ISSN: 2581-5369, <https://www.ijlmh.com/wp-content/uploads/2019/06/Piercing-through-the-Corporate-Veil.pdf>
11. Michael J. Gaertner, ‘Reverse Piercing the Corporate Veil: Should Corporation Owners Have It Both Ways’ (1989) 30 Wm & Mary L Rev 667, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/wmlr30&i=677>
12. Michael Richardson, ‘The Helter Skelter Application of the Reverse Piercing Doctrine’ (2011) 79 U Cin L Rev 1605, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/ucinlr79&i=1613>
13. Nicholas B. Allen, ‘Reverse Piercing of the Corporate Veil: A Straightforward Path to Justice’, (2011) 85 St John’s L Rev 1147, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/stjohn85&i=1153>
14. Vijay P. Singh, ‘The doctrine of reverse piercing of corporate veil: its applicability in India’ (2021) 27(1-2), Trusts & Trustees, Pages 108–117, <https://academic-oup-com.opj.remotlog.com/tandt/article/27/1-2/108/6065776?searchresult=1>
15. W Lawrence Fletcher, ‘Piercing the Corporate Veil: It Can Work in Reverse’ (1982) 33 Mercer L Rev 633, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/mercer33&i=645>
16. Zhong Xing Tan, ‘New Era of Corporate Veil-Piercing: Concealed Cracks and Evaded Issues’ (2016) 28 SAcLJ 209, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/saclj28&i=209>
- Websites/Blogs and Newspaper Articles
1. Biswas, Liton Chandra and Biswas, Liton Chandra, Approach of the UK Court in Piercing Corporate Veil (January 13, 2011), SSRN: <https://ssrn.com/abstract=2438217> or <http://dx.doi.org/10.2139/ssrn.2438217>
2. Rooha Khurshid, Reverse Piercing of Corporate Law: An unemployed Phenomenon in India, Corporate Law Reporter, <http://corporatelawreporter.com/2017/07/12/reverse-piercing-of-corporate-veil-an-unemployed-phenomenon-in-india/>
3. Spiro, Peter, Piercing the Corporate Veil in Reverse: Comment on Yaiguaje v. Chevron Corporation (2019) Canadian Business Law Journal, (2019), 62 C.B.L.J. 231., SSRN: <https://ssrn.com/abstract=3223136 or <http://dx.doi.org/10.2139/ssrn.322313>
4. Thomas K. Cheng, The Corporate Veil Doctrine Revisited: A Comparative Study of the English and the U.S. Corporate Veil Doctrines, (2011) 34 B.C. Int’l & Comp. L. Rev. 329, <https://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1660&context=iclr>
[1] Masoom Agrawal and Vaidehi Pareek, ‘Piercing through the Corporate Veil’ (2019) 2(2) IJLMH, ISSN: 2581-5369, <https://www.ijlmh.com/wp-content/uploads/2019/06/Piercing-through-the-Corporate-Veil.pdf>, assessed 18 July 2021
[2] Rooha Khurshid, ‘Reverse Piercing of Corporate Law: An unemployed Phenomenon in India’, Corporate Law Reporter, <http://corporatelawreporter.com/2017/07/12/reverse-piercing-of-corporate-veil-an-unemployed-phenomenon-in-india/>, assessed 18 July 2021
[3] Ibid
[4] Hansmann, Henry, and Reinier Kraakman, ‘The Essential Role of Organizational Law’ (2000) 110(3) The Yale Law Journal, pp. 387–440, <https://www.jstor.org/stable/797521>, assessed 10 December 2021
[5] Henry Hansmann, Reinier Kraakman and Richard Squire, ‘Law and the Rise of the Firm’ (2006) 119 HARV. L. REV. 1338, pp. 1333–403, <http://www.jstor.org/stable/4093574>, assessed 12 December 2021
[6] Spiro, Peter, ‘Piercing the Corporate Veil in Reverse: Comment on Yaiguaje v. Chevron Corporation’ (2019) Canadian Business Law Journal, 62 C.B.L.J. 231, <https://ssrn.com/abstract=3223136> or <http://dx.doi.org/10.2139/ssrn.3223136>, assessed 20 August 2021
[7] [1896] UKHL 1
[8] Vijay P Singh, ‘The doctrine of reverse piercing of corporate veil: its applicability in India’ (2021) 27 (1-2), Trusts & Trustees, <https://academic-oup-com.opj.remotlog.com/tandt/article/27/1-2/108/6065776?searchresult=1>, assessed 21 July 2021
[9] Nicholas B Allen, ‘Reverse Piercing of the Corporate Veil: A Straightforward Path to Justice’ (2011) 85 St John’s L Rev 1147, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/stjohn85&i=1153>, assessed 26 July 2021
[10] 162 Cal.App. 4th 1510 (Cal. Ct. App. 2008)
[11] Gregory S Crespi, ‘The Reverse Pierce Doctrine: Applying Appropriate Standards’ (1990) 16 J Corp L 33, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/jcorl16&i=43>, assessed 20 July 2021
[12] Macaura v. Northern Assurance Company Ltd. and Others, [1925] AC 619 and Tunstall v. Steigmann, [1962] 2 QB 593
[13] Allen, ‘Reverse Piercing of the Corporate Veil: A Straightforward Path to Justice’ (n 9)
[14] [2018] SGHC 24 [47]
[15] Ibid
[16] Khurshid, ‘Reverse Piercing of Corporate Law: An unemployed Phenomenon in India’ (n 2)
[17] (2003) 3 Comp L.J 170 SAT.
[18] Ibid
[19] Debts Recovery Tribunal, (Karnataka, Bangalore), SBI v. Kingfisher Airlines Ltd., OA No. 766 of 2013, decided on January 19, 2017
[20] 2016 SCC OnLine DRAT 1
[21] AIR 2005 SC 2622
[22] (2012) 5 SCC 661
[23] Elham Youabian, ‘Reverse Piercing of the Corporate Veil: The Implications of Bypassing Ownership Interest’ (2004) 33 Sw U L Rev 573, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/swulr33&i=583>, assessed 20 July 2021
[24] Ariella M. Lvov, ‘Preserving Limited Liability: Mitigating the Inequities of Reverse Veil Piercing with a Comprehensive Framework’ (2017) 18 UC Davis Bus LJ 161, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/ucdbulj18&i=161>, assessed 29 July 2021
[25] Singh, ‘The doctrine of reverse piercing of corporate veil: its applicability in India’ (n 8)
[26] Lvov, ‘Preserving Limited Liability: Mitigating the Inequities of Reverse Veil Piercing with a Comprehensive Framework’ (n 24)
[27] Youabian, ‘Reverse Piercing of the Corporate Veil: The Implications of Bypassing Ownership’ (n 23)
[28] Ibid
[29]Arjya B. Majumdar, “Corporate Personality in India” (2007), <https://papers.ssrn.com/abstract=2256140>, assessed 18 July 2021
[30] 33 N.Y. 139 (N.Y. 1865)
[31] 266 Fed. App’x. 140 (3d Cir.: 2008)
[32] Michael Richardson, ‘The Helter Skelter Application of the Reverse Piercing Doctrine’ (2011) 79 U Cin L Rev 1605, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/ucinlr79&i=1613>, assessed 15 September 2021
[33] 632 F.2d 413 (5th Cir. 1980)
[34] C.A. No. 2020-0601-JRS (Del. Ch. May 25, 2021)
[35] [1925] AC 619
[36] [1962] 2 QB 593
[37] [2013] UKSC 4 [35]
[38] Jhaveri Darsan Jitendra (n 14)
[39] Macaura (n 35)
[40] Tunstall (n 36)
[41] Prest (n-37)
[42] Zhong Xing Tan, ‘New Era of Corporate Veil-Piercing: Concealed Cracks and Evaded Issues’ (2016) 28 SAcLJ 209, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/saclj28&i=209>, assessed 10 October 2021
[43] Hans Tjio and Clara Tung, ‘Reverse Veil-Piercing in Singapore and Its Consequences’ (2018) 30 SAcLJ 1133, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/saclj30&i=1150>, assessed 10 October 2021
[44] 298 P.2d 1107 (Wash. 1956)
[45] Michael J. Gaertner, ‘Reverse Piercing the Corporate Veil: Should Corporation Owners Have It Both Ways’ (1989) 30 Wm & Mary L Rev 667, <https://heinonline-org.opj.remotlog.com/HOL/P?h=hein.journals/wmlr30&i=677>, assessed 18 July 2021.
[46] Prest (n-37)
[47] Allen, ‘Reverse Piercing of the Corporate Veil: A Straightforward Path to Justice’ (n 9)
[48] Ibid
[49] 169 Misc. 2d 282, 289, 647 N.Y.S.2d 904, 909 (Sup. Ct. Albany Cnty. 1995)
[50] Susan A. Kraemer, Corporate Law, 76 Denv. U. L. Rev. 729 (1999), <https://digitalcommons.du.edu/cgi/viewcontent.cgi?article=1866&context=dlr>, assessed 10 October 2021.
[51] Lvov, ‘Preserving Limited Liability: Mitigating the Inequities of Reverse Veil Piercing with a Comprehensive Framework’ (n 24)
[52] 139 P.3d 639 (Colo. 2006)
[53] Ibid
[54] Manichaean (n 34)
[55] Commissioner of Environmental Protection v. State Five Industrial Park Inc., 304 Conn. 128 (Conn. 2012)
[56] Manichaean (n 34)
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