TMI Blog1991 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... n to set aside the abatement and the application to bring on record the legal representatives of the deceased first respondent is neither wilful nor deliberate. If the legal representatives of the deceased first respondent are not brought on record and the delay in filing the application to set aside the abatement and the application for setting aside the abatement are not ordered, the body of creditors will be put to irreparable injury and prejudice" The misfeasance application, according to the liquidator, is based upon a special auditor's report which discloses that the first respondent has appropriated large cash and other assets of the company and has been a party and privy to repledge several jewels of the parties who have pledged the same with the Nidhi, that is to say, the Purasawalkam Hindu Santhatha Sanga Nidhi Limited. The liquidator, it is said, attempted to trace the money and other effects and thus filed C.A. No. 272 of 1971 in the court under section 543 of the Companies Act, 1956. The first respondent therein N.R. Sadagopa Mudaliar, however, died on July 11, 1973. No application to substitute his heirs and legal representatives could, however, be filed earlier tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original landlord to the registry after six years of the death; then filed an application for substitution within three weeks from the date of the letter. The Supreme Court took the view that since the materials in the said case justified that the appellant came to know about the death for the first time from the letter of the pleader of the transferee there was good and sufficient reason for condoning the delay and granting substitution in the facts of the case. A Bench of this court in Peerdan Juharmal Bank Ltd., In re [1958] 28 Comp Cas 546; [1958] 2 MLJ 167, has taken the view that the proceedings taken under section 235 of the Indian Companies Act, 1913, similar to the provision in section 543 of the Companies Act, 1956, against a director of a banking company which had been ordered to be wound up for assessing damages on charges of misfeasance, etc., cannot be continued after his death and the liability of such director cannot be enforced against his legal representatives in those proceedings. Some other courts of the country held a similar view. In Official Liquidator v. Parthasarathi Sinha [1983] 53 Comp Cas 163; AIR 1983 SC 188, however, the Supreme Court has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partition or dissolution of a partnership and thus, there is a judgment-debtor duly identified in the decree; but, before execution proceedings to finalise the liability continues called "final decree proceedings". Since the liability stands fully determined, the judgment-debtor is known. Merely because there are final decree proceedings continuing, courts do not permit the abatement of the decree on account of the death of the judgment-debtor. In Official Liquidator v. Parthasarathi Sinha [1983] 53 Comp Cas 163 ; AIR 1983 SC 188, the Supreme Court has found parity in a proceeding in execution of a decree and a proceeding under section 543 of the Companies Act, 1956, for the reason of the express language used in section 634 of the Act which states that any order made by a court under the Act may be enforced in the same manner as the decree made by the court in a suit pending therein. In the words of the Supreme Court, this is not a provision intended to punish a man who has been found guilty of misfeasance but for compensating the company in respect of the loss occasioned by his misfeasance. Whenever there is a relationship based on contract, quasi-contract, some fiduciary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itute the appellants as the legal representatives of the deceased first respondent. Courts have held and one such judgment of the Supreme Court has been noticed by the learned single judge that rule 10A of Order 22 of the Code of Civil Procedure is a rule that has been introduced to ensure that information as to the death of a party is given to the court and thus to counsel for the plaintiff/appellant so that if any legal representative or heir is required to be brought on record, steps are taken in time. Absence of compliance with this rule by counsel for the deceased defendant/ respondent will itself provide a cause for condonation of delay in filing a petition for substitution and/or setting aside the abatement. It, however, will not mean that even if the plaintiff/appellant knew about the death, yet he need not make any application for substitution or that counsel for the defendant/respondent need not inform the court about the factum of death. If there are materials showing that the death was within the knowledge of the plaintiff/appellant and/or that the defendant/respondent learnt about the death long before he decided to file an application for substitution for bringing t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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