Misfeasance proceedings are compensatory, not penal, so death of the respondent does not cause abatement or bar substitution.

Misfeasance proceedings under section 543 of the Companies Act, 1956 are compensatory and enforceable like a decree under section 634, so the death of the respondent does not cause abatement. Because the liability is directed to making good loss to the company and is analogous to execution proceedings, substitution of legal representatives remains permissible after death. Order 22 Rule 10A of the Code of Civil Procedure is designed to secure prompt notice of death, and delay in moving for substitution may be excused where timely intimation was not given by counsel. The court found no basis to interfere with the substitution sought in the circumstances.

---

---

Issues: Whether the death of a respondent in misfeasance proceedings under section 543 of the Companies Act, 1956 resulted in abatement and whether the legal representatives could be substituted after delay.

Analysis: Proceedings under section 543 are compensatory in nature and, by reason of section 634 of the Companies Act, 1956, are capable of enforcement in the same manner as a decree. The liability determined in such proceedings is not penal but is directed towards making good the loss caused to the company. The Court applied the principle that proceedings of this nature are analogous to execution proceedings, in which death of the judgment-debtor does not cause abatement. Order 22, Rule 10A of the Code of Civil Procedure, 1908 is intended to ensure timely notice of death, and want of prompt intimation by counsel for the deceased party may justify delay being excused. Although fuller particulars of the liquidator's enquiries would have been desirable, the absence of those particulars was not fatal in the facts of the case.

Conclusion: The death of the respondent did not cause abatement, and substitution of the legal representatives was permissible; the delay in seeking substitution did not require interference.

---