Misfeasance proceedings against ex-directors fail where delayed action lacks jurisdictional basis and supporting liquidation evidence.

Misfeasance proceedings against ex-directors were held not maintainable because they were founded on an old inspection report, remained dormant for years, and were not supported by independent detection by the official liquidator during liquidation. The record did not establish conduct attracting sections 542 and 543 of the Companies Act, 1956, and the Court found no justification for initiating action after such delay. On the materials placed, the alleged acts were not shown to be post-winding-up misfeasance capable of sustaining the proceedings, so the matter failed for want of jurisdiction and limitation.

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Issues: Whether the misfeasance proceedings against the ex-directors were maintainable in view of want of jurisdiction and bar of limitation.

Analysis: The proceedings were founded on an inspection report relating to a period much prior to winding up, and the report had remained unattended for several years before the Central Government moved the official liquidator. The record did not show that the official liquidator had independently detected misfeasance during liquidation or that the alleged acts were established as conduct attracting sections 542 and 543 of the Companies Act, 1956. The Court also noted that there was no justification for initiating prosecution after such delay, and that the alleged offences did not fall within the category of post-winding-up misfeasance proceedings that could be sustained on the materials placed.

Conclusion: The misfeasance proceedings were not maintainable, being vitiated by want of jurisdiction and limitation.

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