TMI Blog2016 (9) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... to the company in liquidation to their corresponding enrichment/ benefits. The conduct of the respondent directors clearly fall within the definition of misfeasance, malfeasance and breach of trust. Further, from the evidence on record it can be gathered that the deeds and acts of the respondent ex-directors/others were of a nature not expected of prudent persons engaged in the business. On consideration of the pleadings and evidence on record, I am of the considered view that the case of misfeasance, malfeasance and breach of trust is made out against Dev Jeet Nag, Ahnish Kamal Bhatnagar and Yogesh Sharma, the respondents directors of the company in liquidation. Steps be taken jointly and severally for recovery from them of ₹ 1,02,57,288/- along with interest @ 6% per annum effective 17-12-2003 (sixty days following the winding up order dated 17-10-2003) till the date of recovery. - S.B. Company Application No. 50/2008 In (S.B. Company Petition No. 31/1998) - - - Dated:- 29-7-2016 - Alok Sharma, J. For the Official Liquidator : Gaurav Sharma For the Respondent : None ORDER The matter has come up on an application under Section 543 of the Companies A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator. The Chartered Accountant further found that an investment of ₹ 19,95,243/- was made by the company in liquidation in fixed deposit with the State Bank of India, Sirohi, Bikaner, Ahore, Kolayat and Jaipur Branches. However the official liquidator did not receive the said amount and it appeared that the respondent directors had privately realised the said FDR amount ₹ 19,95,243/-. It was further found that as per balance sheet all advances were good for recovery , therefore, it could be presumed that the entire amount due from loan and advances were realised outside the books of the company. It was further found that ₹ 7,00,570/- were cash in hand and ₹ 25,81,627/- were in bank aggregating to ₹ 32,82,198/- which had not been hand over to the official liquidator. Neither the statement of affairs nor account books nor any record after the last balance sheet as on 31-3-1996 was available. Such act of respondent directors indicated that they have unlawfully retained the funds of the company in liquidation. It was found that in 1995-95 a piece of land was purchased for ₹ 6,03,176 as its stock in trade. As per balance sheet other amount was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the total amount Rs.1,02,57,288/- The Official Liquidator alleged that in the circumstances the respondents directors are liable for misfeasance, wrongful retention of money and property of the company in liquidation, and breach of trust under Section 543 of the Act of 1956. Consequently the respondent directors be held liable and a direction be issued that the amount of ₹ 1,02,57,288/- along with interest thereon be recovered from the respondent directors. Notices were issued to the respondent directors on 31-10- 2008 on several occasions both through normal process and registered post, but the respondents did not turn up. Ultimately vide order dated 12-9-2014 the notices on the respondent directors were directed to be published in daily news paper Rajasthan Patrika, Jaipur Edition on 21-10-2014. Copy of the same is on record of the application. Thereafter vide order dated 28-11-2014 service of respondent directors was deemed to be completed and in their absence despite service, proceedings taken exparte on 24-7-2015. The matter was put to trial. The Official Liquidator in his affidavit in evidence reiterated the allegations made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the directors or officers and to pass an order against them, if they are found liable for misapplication etc. of the money or property of the company or otherwise guilty of any misfeasance or breach of trust in relation to the company. In the case of Official Liquidator Dhavalgiri Paper Mills (P) Ltd. Vs. Chinubhai Khilachand [2003 (114) Com Cases 277] the Gujarat High Court held that to bring the charge of misfeasance against ex-directors it is necessary that specific acts of commission or omission and/ or negligence on the part of the directors should be pointed out and proved establishing that the act of commission or omission or negligence was with the knowledge and intent to cause loss to the company. In the case of Official Liquidator Vs. D.D. Sinha [SB Company Application No.5/1995 decided by the Rajasthan High Court] it was held that the allegation of misfeasance and misapplication has to be specifically pleaded with material particulars against each of the directors/ erstwhile directors of the company. The state of law having been thus detailed, the moot question is whether a case against the respondent directors is made out. The case as laid is based on the report d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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