Abstract

The foul play and danger to the greater public interest has given a momentum to break open the insulation of the protective covering (veil), which in legal terminology referred to as “ Corporate veil”. For the determination of the character especially the negative one which a company might acquire in its long run ruining the public interest and prima facie indulge in such activities which are per se illegal. The piercing of this veil is solely to find out the persons who in reality control the company’s affairs. We are aware of the scenario in todays world how the corporate existence are used as vehicles of fraud, sometimes to defraud creditors or to avoid the legal obligations, so this can be only stopped only when the covering is lifted and the real person behind this kind of transaction is pointed. Here we will understand the concept of lifting of corporate veil and the rationale behind doing so, along with judicial pronouncements and interpretation with help of various types of Indian and foreign cases, which will help us to understand the nature and ways the illegalities are committed by the Directors or shareholders or as a whole in the camouflage of the company. The lack of any particular uniformity in Indian and foreign courts in the application of the principles of lifting of corporate veil due to lack of clarity and unanimously accepted appellations gives rise to legal issues on legal jurisprudence and the framework, which we will try to resolve in our current research paper.

Keywords