Misfeasance liability cannot attach to a director for acts predating his appointment under company law

An application for misfeasance under section 543(1) of the Companies Act, 1956 was held not maintainable against a person appointed as director only after the period in which the alleged loss was said to have occurred. The alleged wrongful acts related to a period ending before the respondent's appointment as director, and the material on record did not connect him with those acts or the claimed loss to the company in liquidation. On that basis, liability could not be fixed on the respondent for the earlier period, and recovery on the misfeasance claim failed.

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Issues: Whether an application for misfeasance under section 543(1) of the Companies Act, 1956 could be maintained against a respondent who was appointed as a director only after the period during which the alleged misfeasance was said to have occurred.

Analysis: The allegation of loss to the company in liquidation related to the period from 1-4-1999 to 31-3-2004. The respondent's appointment as director was only with effect from 2-9-2004. Since the claimed misfeasance was confined to an earlier period, before the respondent became a director, the material on record did not connect him with the alleged wrongful acts or make him liable for the loss claimed in the application.

Conclusion: The application was not maintainable against the respondent and the claim for recovery failed.

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