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2019 (4) TMI 488 - HC - Companies LawSpecific act or act of commission or omission on the part of each Director quantifying the loss to the Company - directors guilty of misfeasance or fraud in terms of Section 543 of the Act of 1956 - Power of Tribunal to assess damages against delinquent directors - HELD THAT:- This Court finds that the BIFR had declared the Company in liquidation as a sick unit on 01/08/1994 and had referred the matter to this Court for winding up and an order was passed for winding up of the Company in liquidation on 12/08/1999. The instant company application moved by the Official Liquidator is solely based on the report prepared by the Chartered Accountant dt. 13/07/2004. The Chartered Accountant was examined. Neither in his affidavit nor during the course of crossexamination, he has pinpointed of any particular misfeasance or fraud committed by a particular Director of the Company in liquidation. As noticed, the power under Section 543 of the Act of 1956 is to be exercised by the Court wherein the Court is vested with the jurisdiction to examine conduct of the past or present Director, Manager or any other officer of the Company who is found to be guilty of any misfeasance or breach of trust. Thus, such proceedings have to be treated in the nature of quasi criminal proceedings. Misfeasance is not to be imputed to a Director unless he has dishonestly acted or abstained from acting any conflict with his plain duty. Such allegation must be pointedly put up by the Official Liquidator in the application moved under Section 543 of the Act of 1956. There has to be a positive and specific evidence and pleadings in support of the individual Director of a nature contemplated by the Section. From the documents which have come on record, pleadings of the parties as well as the submissions which have been recorded, this Court has been unable to find a specific allegation as against a particular Director apart from the general allegations of the loss caused to the Company which is difficult to be pinpointed on a particular individual Since there is no detailed narration of a specific act or act of commission or omission on the part of each Director quantifying the loss to the Company nor the Official Liquidator has been able to show any intentional act on the part of a particular Director in causing loss to the Company, merely because of inaction on the part of the Directors as a general allegation, this Court does not find any ground to hold the respondents guilty of misfeasance or fraud in terms of Section 543 of the Act of 1956.
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