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Issues: Whether the order deleting the name of a deceased director from the array of respondents in proceedings under sections 542 and 543 of the Companies Act, 1956 should be recalled, and whether such proceedings can continue against the legal representative of the deceased to the extent of the estate inherited.
Analysis: Proceedings under sections 542 and 543 of the Companies Act, 1956 are in the nature of summary civil proceedings intended to determine compensation for loss caused to the company by breach of trust or misfeasance. The settled position is that death of the wrongdoer does not extinguish the liability if the claim can be pursued against the estate in the hands of the legal representative. The legal representative is not personally liable beyond the value of the estate devolved upon him or her. The Court noted that the earlier deletion of the deceased respondent's name had been made without the true position regarding legal representatives being fully brought to notice, and that the matter required reconsideration in light of the statutory duty to inform the Court of death and relevant representation.
Conclusion: The deletion order was liable to be recalled, and the proceedings could continue against the legal representative, confined to the estate of the deceased.
Ratio Decidendi: In misfeasance or similar summary civil proceedings against a director, the death of the director does not abate the claim; the proceeding may continue against the legal representative, but liability is limited to the extent of the estate of the deceased in the representative's hands.
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