Misfeasance proceedings survive against legal representatives for recovery only from the deceased director's estate.

Proceedings under section 543 of the Companies Act, 1956 are compensatory and may continue after the death of a director for the limited purpose of determining liability for misfeasance or breach of trust and enforcing it against the deceased director's estate. The declared liability is enforceable as a court order under section 634, and execution follows the Code of Civil Procedure. If the liable person dies before satisfaction, section 50 of the Code governs execution against legal representatives, whose exposure is confined to the deceased's property in their hands. The earlier decision did not prevent continuation of the inquiry, but coercive orders cannot be made against heirs personally.

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Issues: Whether proceedings under section 543 of the Companies Act, 1956 against a deceased director can continue against his legal representatives and whether any declared liability can be realised from the deceased director's estate in their hands.

Analysis: The proceeding under section 543 is compensatory in nature and is concerned with determining liability for loss caused to the company by misfeasance or breach of trust. The declaration of liability made under that provision is enforceable as an order of the court under section 634 of the Companies Act, 1956, and the Code of Civil Procedure applies to execution. Where the person liable dies before satisfaction of the order, section 50 of the Code of Civil Procedure governs execution against the legal representatives, whose liability is confined to the property of the deceased that has come into their hands. The earlier decision did not bar continuation of the proceeding to determine and declare liability, though compulsive orders could not be made against heirs in the same manner as against the delinquent director personally.

Conclusion: The proceedings under section 543 do survive against the legal representatives for the limited purpose of determining and enforcing liability against the deceased director's estate, and they can be continued accordingly.

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