JUDGMENT : Sathish Ninan, J. 1. These appeals arise from suits for money. The suits were decreed as against the first defendant, but were dismissed as against other defendants. The plaintiffs are in appeal. There is substantial identity in the parties involved in the suits. The issue involved in the suits is one and the same. Hence, as agreed by both sides these appeals were heard together and are being disposed of by this common judgment. 2. The plaintiffs seek to recover unpaid purchase price towards the value of latex purchased by the first defendant from the plaintiff. The suit was decreed against the first defendant. The first defendant has not chosen to prefer any appeal. Hence the decree as against the first defendant has become final. In these appeals we are concerned only with the liability of defendants 2 onwards in the respective suits. 3. According to the plaintiffs, the second defendant is a partnership firm constituted by the Directors of the first defendant Company. Defendants 3 onwards are the Directors. The allegation is that the funds of the first defendant were siphoned away by the Directors for formation and acquisition of the second defendant at a point of time when huge amounts were due to the plaintiff. The first defendant did not have sufficient assets from which the plaintiffs could realise their debt and the attempt was to defeat the plaintiffs' claims. It is alleged that the second defendant is only an ostensible owner which holds the assets in trust for the first defendant and its Directors. The plaintiffs seek for a decree against defendants 2 onwards. 4. The trial court found that the allegations as against defendants 2 onwards have not been substantiated and that there is no privity of contract between the plaintiff and defendants 2 onwards. Accordingly, the suits were dismissed. 5. We have heard Sri.Joseph Markos, learned Senior Counsel for the appellants, Sri.K.K.John, learned counsel for the contesting defendants, and Sri.Shaji Thomas, learned counsel for the first defendant. 6. The points that arise for determination in these appeals are:- (i) Are the plaintiffs entitled to seek for lifting of the corporate veil, and a finding that the Directors of the first defendant company and the second defendant partnership constituted by them are liable for the plaint claims? 6. The points that arise for determination in these appeals are:- (i) Are the plaintiffs entitled to seek for lifting of the corporate veil, and a finding that the Directors of the first defendant company and the second defendant partnership constituted by them are liable for the plaint claims? (ii) Are the plaintiffs entitled for a decree against defendants 2 onwards upon the contract entered into with the first defendant? The learned Senior Counsel relying on the judgment of the Apex Court in Subra Mukherjee v. Bharat Coking Coal Ltd. (SC) [257 Company Cases Vol.101] and Delhi Dev. Authority v. Skipper Construction Co. (SC) [362 Company Cases Vol.89] argued that taking shelter under the corporate veil of the first defendant company, its Directors had siphoned out its funds and formed a partnership in the name of the second defendant and started a separate business. The funds of the first defendant were diverted when huge amounts were due to the plaintiffs. The attempt was obviously to defraud the plaintiffs. Therefore, it has to be held that defendants 2 onwards are liable for the plaint claim along with the first defendant. The corporate personality of the first defendant is being used as a cloak of fraud and improper conduct, it is argued. The learned counsel highlighted the following observations of the Apex Court in Delhi Dev. Authority v. Skipper Construction Co. (SC) [362 company cases Vol.89] “The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. The learned counsel highlighted the following observations of the Apex Court in Delhi Dev. Authority v. Skipper Construction Co. (SC) [362 company cases Vol.89] “The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned.” The learned Senior Counsel also referred to the following observations of the Apex Court in Bharat Coking Coal Limited (supra) :- “When the circumstances of the case and the intrinsic evidence on record clearly point out that the transaction is not bona fide and genuine, it is unnecessary for the court to find out whether the respondent has led any evidence to show that the transaction is sham, bogus or fictitious.” Relying on the judgment of the Delhi High Court in P.N.B Finance Ltd. v. Shri Shital Prasad [67 Company Cases vol.54] , it was argued that when the relevant records and accounts are with the defendant, the onus to prove was on them to produce it to disprove the allegation of siphoning of funds. The learned counsel for the respondent would on the other hand contend that, but for some bald allegations of fraud, there are no materials to substantiate the same. The materials on record do in fact disprove the claims. 7. Essentially the question involved would be whether there were fraudulent acts on the part of the Directors of the first defendant company leading to siphoning of funds and the formation of the second defendant firm, with the malafide intention of defeating the claims against the first defendant company. The mere fact that the directors of the first defendant company started a partnership venture for some other businesses does not mean that it was intended to defraud the creditors of the first defendant. 8. The audited accounts of the first defendant company have been produced. It is not in dispute that relying upon the same it cannot be held that there had been siphoning of funds for the formation of the second defendant. There is no material to find the alleged diversion of funds. 8. The audited accounts of the first defendant company have been produced. It is not in dispute that relying upon the same it cannot be held that there had been siphoning of funds for the formation of the second defendant. There is no material to find the alleged diversion of funds. The accounts does not indicate that the Directors of the first defendant company had availed loans from the company for the formation of the second defendant. Prior to the filing of the suit, the plaintiff had issued a notice. Therein there is no allegation of diversion of funds from the first defendant. 9. When there are no materials to find the alleged siphoning of funds from the account of the first defendant company, the mere non-production of accounts by the other defendants to prove the source of funds, is of no consequence. Such non-production would have been relevant if, going by the accounts statement of the first defendant, diversion of funds was brought out. The mere fact that the Directors of the first defendant company entered into a partnership in the name of the second defendant, to do yet another business, cannot by itself amount to fraud on the creditors of the first defendant. 10. The allegation of fraud and diversion of funds having not been established, the plaintiffs are not entitled for a decree as against the defendants 2 onwards. The claim as against them were rightly negatived by the trial court. We do not find any merit in these appeals. The appeals fail and are dismissed. No costs.