In Matrimonial Dispute Case, Delhi High Court Directs Wife To Return Audi Q7 To Husband's Company

In a case connected to a matrimonial dispute, the Delhi High Court on Friday directed a woman to return an Audi Car to a private company, while ruling that the corporate veil cannot be permitted to be lifted to hold that even though the vehicle belongs to the company, it is owned by her husband.

The woman had been permitted by a Mahila Court to retain the car last year after she initiated proceedings under Protection of Women from Domestic Violence Act against her husband, who was a 75 percent shareholder in the company and had been given the vehicle for official use.

Setting aside the Mahila Court order permitting her to retain the car, Justice Jasmeet Singh in the judgment clarified, "However, this order is only for the return of the Audi car and in no way determines the right of respondent No. 2 [wife] to seek maintenance, right of residence commensurate with her stature and her living lifestyle, from respondent No. 3 [husband]. She shall be at liberty to initiate any/all such proceedings for getting a car/maintenance for herself and her children which if already filed or which may be filed in future, shall be determined in accordance with law".

The judgment was passed by Justice Singh on a petition filed by Radical Arc Ventures Pvt. Ltd., a company which is engaged in the business of construction and real estate. The company is the registered owner of the vehicle Audi Q7.

The car had been returned by the man to the company at the time of resignation on July 2 last year. However, the woman on July 19 allegedly took the car from the company's possession. A complaint was filed at Sector 49, Noida Police Station regarding theft of the car. There were original title documents of 24 properties of the company's clients in the car at that time.

Subsequently, the company came to know that the car is in possession of the woman and the same is protected by an order of the Mahila Court. On September 15 last year, the MM Court had directed that the Audi car will remain in power and possession of the woman till the matter is heard on merits. An application filed by the company for review of the order was dismissed, saying there exists no power of review under Protection of Women from Domestic Violence Act. The court had also noted that the man resigned from the company only after an order dated July 26, 2021 was passed.

The high court in July had referred the husband and wife to mediation and counsel representing the man had made a statement that the Audi car must be returned by his wife and instead, he would provide a BMW car to her. However, the counsel representing the husband later retracted from the statement.

The counsel representing the company argued before the court that it is suffering at the hands of the couple without any fault. The court was also told that certain original property papers were lying in the car and one person has initiated criminal proceedings against the company in this regard.

However, the counsel representing the woman called it a proxy litigation and told the court that she will return the Audi, if he agrees to provide a BMW car. It was also argued that he resigned from the company only to play mischief with the court and deprive her of the benefits of the MM Court orders.

Justice Singh in the order rejected the argument that the company should have filed an appeal under Section 29 of the Protection of Women from Domestic Violence Act and said the company is neither a respondent nor an aggrieved person in those proceedings.

The court further said the woman under Section 12 of the Domestic Violence Act can only have a grievance only against her husband.

"Section 19 and 22 of the Act entitles the respondent No. 2 [wife] with right of residence as well as relief of compensation and damages against the respondent who has been defined under Section 2(q). The petitioner company does not come within the ambit of the said definition. The lifting of corporate veil and to hold that the Audi car even though belongs to petitioner company but in fact belongs to respondent No. 3 [husband], would not be legally tenable. The company and its shareholders and Directors are separate legal entities," it said.

On the argument that the husband has been fraudulently showing incorrect dates of resignation, the court said the same is irrelevant for the purpose of adjudication as the proceedings in the case cannot be brought within the ambit of the phrase "fraud".

"The act and conduct of the respondent No. 3 [husband] does not come within the said definition of fraud. The respondent No. 3 is entitled to resign as a director from the petitioner company as and when he desires. The law permits him to do so. Once the respondent No. 3 has done a legally permissible act, the same cannot be considered a fraud in any way. Hence, there cannot be a declaration to hold that the said Audi Car belongs not the petitioner company but to the respondent No. 3," it added.

Allowing the petition, the court said the Audi car must be returned to the petitioner company within one week

Title: RADICAL ARC VENTURES PVT LTD versus STATE NCT OF DELHI

Citation: 2022 LiveLaw (Del) 1020

Click Here To Read Order/Judgment