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2013 (5) TMI 38 - HC - Companies LawApplication u/s 543 – Directors of respondent Company abused their fiduciary position – breach of trust - non-furnishing the books of account for completing winding up proceeding and other omissions – O.L. is of the view that (i) there is a willful suppression of materials which has resulted in non-recovery of amounts due to the company in liquidation and (ii) such amounts required to be recovered from the respondent directors and initiated a proceedings against Ex-Directors under Section 454 (5) & (5A) of the Companies Act. Held that - An application under Section 543 of the Companies Act, 1956 cannot be made in vague terms and it cannot be used as a power to conduct a roving enquiry in these proceedings and to ascertain as to whether there is any act of misfeasance on the part of erstwhile directors. In fact, Section 543 proceedings is only proceedings to quantify loss sustained by the company (in liquidation) on account of acts of misfeasance committed by its ex-directors. Until and unless these ingredients are satisfied and official liquidator arrives at the conclusion that the deeds and acts of ex-directors was of such nature which was not expected of a prudent person and thereby it has resulted in non-recovery of the said amount, fault cannot be laid on the door steps of the ex-directors. For the reasons aforesaid, point Nos.(i) and (ii) hereinabove is to be answered against the applicant-official liquidator and in favour of respondents - ex-directors of the company. Dismissed.
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