Those who have taken Finance as their profession would have a paper on mercanile law at some point
and the first and foremost case we can see in any text book is Solomon vs Solomon
The famous judgement in this case goes like this : Solomon starts a company called Solomon & Company and carries a business Unfortunately, the business runs into heavy loss and Solomon & company becomes bankrupt. The investors in the business demand that they need to be settled by solomon by selling his personal assets. The Court declined the claim stating that Solomon is different from Solomon & company. Solomon & Co is a seperate legal entity and any loss of such separate legal entity cannot be cleared through the personal assets of Solomon.
What happens in a real time scenario?
Dr. Vijay Mallya is a multi millionare and he runs diversified business.. His company United Breweries is almost a monopoly model in the liquor industry. Apart from this, he runs an airline called Kingfisher Airlines.. He also invests crores and crores in buying a cricket team in the much fancied Indian Premier League. When he continues to earn millions of rupees through Liquor, he spends every day with a new date, his son with bollywood actresses, life full of parties... Suddenly there comes a crisis in the airline segment, employees there are not paid wages for more than 5 months, but he continues to own the cricket team and spends nights dancing in the ground and after match at the star hotels. Now he says that his airlines division is bankrupt and running out of funds.. there is a raise in debts.. and he needs Govt support in bail out.. Since the Govt of India is struck with such corporate giants, we need not wonder if such bail out happens at the back stage
The point to be noted is that people are very careless only because of this old judgement in Solomon vs Solomon. Now Mr.Mallya's family thinks that airline is a separate legal entity.. let it get closed.. since it is not the bread n butter for him or his son. But what about the employees of KFA? they have already spend 5 months without pay.. what will happen now with the lockout and cancellation of license to fly? Will the Govt go for bail out with the tax payers money? If yes, will it not provoke the other airlines to say a similar condition? Why cant we just come out of Solomon case and attach Mallya's personal assets worth Trillions in India & Abroad to resolve the crisis which has a notable impact on the industry?
Its time to change what Mr.Ambedkar adopted from the British Law!!!!
