Lifting The Corporate Veil: Judicial Trends In India
- IJLLR Journal
- 3 hours ago
- 1 min read
Pooja S, JSS Law College, Mysuru
Dr Jagadish A.T, JSS Law College, Mysuru.
ABSTRACT
The doctrine of Lifting the Corporate Veil represents a critical judicial exception to the principle of "separate legal entity" established in Salomon v. Salomon & Co Ltd. While Indian law generally recognizes a company as a distinct persona, this "veil" is not an absolute shield for practitioners of fraud or illegality.
This abstract examines the evolving judicial landscape in India, exploring how courts navigate the tension between maintaining corporate autonomy and ensuring accountability. By analyzing landmark precedents under the Companies Act, 2013, and common law developments, the study highlights the transition from a rigid adherence to corporate form toward a substance- over-form approach. Through an investigation of instances involving tax evasion, sham incorporation, and the "alter ego" theory, the research underscores how the Indian judiciary utilizes the "Economic Reality" test to prevent the abuse of the corporate structure, ensuring that the legal personality of a company is not used to circumvent statutory obligations or public policy.
Keywords: Separate Legal Entity, Corporate Personality, Judicial Activism, Fraudulent Trading, Economic Reality Test, Alter Ego, Companies Act 2013.
