Official liquidator liability: applications under Section 543(1) are maintainable, subject to prima facie court scrutiny and good faith protection.

An official liquidator is treated as within the statutory scope of 'liquidator' and/or 'officer' for purposes of proceedings under Section 543(1) of the Companies Act, 1956, so an application under that provision is maintainable against an official liquidator. The court must first be satisfied there is a prima facie case before ordering detailed examination or compelling repayment or contribution. Powers of an official liquidator remain subject to court control and acts done in good faith are protected under the statutory immunity provision.

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Issues: Whether an official liquidator can be proceeded against under Section 543(1) of the Companies Act, 1956 and whether an application under that section is maintainable against an official liquidator.

Analysis: Section 543(1) permits the court, on application by the official liquidator, liquidator, creditor or contributory, to examine persons including directors, managers, liquidators or officers of the company for misapplication, misfeasance or breach of trust and to compel repayment or contribution. Sections 448(1)(a) and 449 show that an official liquidator is appointed by the Central Government and by virtue of a winding up order becomes the liquidator of that company; sections 457(3) and 512(2) subject the exercise of liquidator powers to the control of the court. The term 'liquidator' in the statutory context includes an official liquidator acting as liquidator of a company wound up by the court, and the separate reference to 'official liquidator' in the provision for who may file applications enables the official liquidator to act in his official capacity where appropriate. The inclusive definition of 'officer' under section 2(30) and judicial authorities interpreting 'liquidator' and 'officer' support treating an official liquidator as within the scope of persons liable under Section 543(1). At the same time, proceedings against an official liquidator require the Company Court to be satisfied there is a prima facie case before detailed inquiry, and the official liquidator enjoys protection for acts done in good faith under section 635A.

Conclusion: An official liquidator falls within the ambit of 'liquidator' and/or 'officer' for the purposes of Section 543(1) of the Companies Act, 1956, and an application under that section against an official liquidator is maintainable. The Company Court must first consider whether a prima facie case exists before proceeding; acts done in good faith are protected under Section 635A.

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