Specific allegations and proof are required in misfeasance proceedings; unsupported claims against a resigned director cannot continue.

Misfeasance and fraudulent trading proceedings under the Companies Act, 1956 require specific, individualised allegations and positive material against the particular director concerned. General accusations against all directors, unsupported assertions, or a roving enquiry are insufficient. Where the director had resigned before the winding-up order, was not in control of the company's affairs, and the only specific allegation was unsubstantiated, continuation of the proceedings was treated as an abuse of process. The proceedings against that director were therefore unsustainable and were dropped, with discharge from the misfeasance action.

---

---

Issues: Whether proceedings under sections 542 and 543 of the Companies Act, 1956 could be continued against a director where the application contained no specific allegations of fraudulent conduct, misfeasance or breach of trust against him, the only specific allegation was unsupported, and he had resigned before the winding-up order.

Analysis: Proceedings under section 542 require specific particulars showing that the company's business was carried on with intent to defraud or for a fraudulent purpose and that the person proceeded against was knowingly a party to such conduct. Proceedings under section 543 likewise require a clear and individualised case of misapplication, retention of company money or property, misfeasance or breach of trust, supported by positive evidence against the particular director. General allegations, a collective charge against all directors, or a fishing or roving enquiry are insufficient. The record showed that the respondent had ceased to be a director before the winding up, was not in control of the company's affairs or accounts, and the solitary allegation regarding the car was not substantiated. On these facts, continuing the proceedings against him would amount to an abuse of process.

Conclusion: The proceedings could not be sustained against the respondent and were liable to be dropped.

Final Conclusion: The application succeeded and the respondent was discharged from the misfeasance proceedings.

Ratio Decidendi: In misfeasance and fraudulent trading proceedings, liability must be founded on specific, individualised allegations and proof against the particular director concerned; absent such material, the court may terminate the proceedings against that director to prevent abuse of process.

---