TMI Blog2010 (11) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... ication is taken out by the official liquidator for a declaration that the respondents are personally liable for the debts and other liabilities of the company under liquidation ; to examine the conduct of the respondents under sections 542 and 543(1) of the Companies Act, 1956 and order that they are jointly and severally liable to contribute to the assets of the company in liquidation by way of compensation for the loss caused by them to the company in liquidation to the extent of Rs.2,36,49,643 and the future claims from the creditors with interest at the rate of 12 per cent. per annum thereon from the date of winding up, viz., September 17, 2003, till the date of recovery of the entire amount ; to declare the liabilities of respondents Nos. 1 to 4 for the said amount and the future claims of the creditors together with interest thereon shall constitute the first charge on the property and effects in their possession ; and to direct payment of costs. 2. By an order dated September 17, 2003, passed in C. P. No. 6 of 2001, M/s. Indus Marketing Ltd., was wound up and the official liquidator was directed to take charge of the assets and effects of the company. The said company was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,24,615 is due to unsecured creditors, whereas as per the balance-sheet as on March 31, 1993, the unsecured loans is stated as Rs. 8,33,786 only and the vast variation is not clarified by the ex-directors. 7. Further, as per the balance-sheet as on March 31, 1993, the sundry debtors were shown for a total amount of Rs. 5,57,212.57, whereas in the statement of affairs filed on August 17, 2006, it is shown as " nil" . That apart, no particulars regarding the names, address, etc., are furnished and no explanation is provided by the ex-directors for showing trade debtors as " nil" in the statement of affairs. 8. In the balance-sheet as on March 31, 1993, under the heading " fixed assets" , a vehicle was shown for an amount of Rs. 1,67,816 after providing depreciation for the year 1992-93, while that is not finding place in the statement of affairs and that was not handed over to the official liquidator. 9. The official liquidator has neither called for the claims from the creditors of the company in liquidation, nor received any claims voluntarily. 10. The fund position of the company as on date is as follows : Rs. ( i )Cash . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et have changed from year to year in the normal course of business and that change cannot be attributable to the directors with any motive. 14. It is stated that the company was originally engaged in the business of marketing and distribution of various automation, consumer durables, office equipment and telecommunication products and the business was declining over the years and the company was selling its existing stocks and did not have the wherewithal to purchase new stocks and the unsold stocks had negligible realisable value at the time of winding up. It is also stated that since the financial position of the company was low, it had to borrow amounts. Therefore, the list of unsecured creditors increased over the last ten years and the debtors of the company declined over the years. 15. As regards the motor vehicle, it is stated that the vehicle was shown at a depreciated value of Rs. 1,67,816 as on March 31, 1993 and due to wear and tear over the years, the value of the vehicle declined and it was ultimately sold and therefore, the statement of affairs did not disclose the particulars of vehicle. 16. It is also stated that the accounts of the company with the Bank of Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the ex-directors only if it is found that the moneys of the company under liquidation have been misapplied or there has been misfeasance or breach of trust. The term misfeasance or breach of trust is certainly relatable not only to intentional act of the directors, but also to the deliberate conduct of the ex-directors which has resulted in the loss to the company under liquidation. Therefore, to constitute misfeasance under the said provision, the intentional act or deliberate conduct which is detrimental to the interest of the company under liquidation on the part of the ex-directors is a sine qua non. 22. It is trite that when an application under sections 542 and 543 of the Companies Act, 1956, is made relating to allegations of fraud or breach of trust or misapplication, to prove such allegation, which is criminal in nature, it is necessary that there should be mens rea on the part of the erst while directors either in committing fraud or causing loss to the company in liquidation. The charges in these sort of cases have to be specific and it must be brought to the notice of this court that the term misfeasance or breach of trust is certainly relatable not only to intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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