The Supreme Court has said that when associated or group companies are so inextricably connected that they effectively function as one concern, courts can lift the corporate veil and look at the economic reality of the group as a whole.
Answering the question of when such a step can be taken, a Bench of Justices Sanjay Kumar and Alok Aradhe held that the corporate veil may be disregarded where protection of public interest is of paramount importance or where a company has been formed to evade obligations imposed by law or court orders. Court added that this principle can extend to group companies as well, relying on its ruling in ArcelorMittal India Private Limited vs. Satish Kumar Gupta (2019).
Court made these observations while…