Misfeasance liability under company law requires proof of actual loss, not mere non-delivery of assets.

Section 543(1) of the Companies Act, 1956 requires the Official Liquidator to plead and prove how the directors' wrongful conduct caused actual loss before a civil misfeasance claim can succeed. Mere non-handing over of share certificates or other investments is not enough where the record shows the ex-directors had explained the position in correspondence, stated that some national savings certificates were with the Sales Tax Department as security, and indicated that remaining share certificates could be handed over on instructions. In the absence of contemporaneous objection, demand, or proof of financial loss, the ingredients of misfeasance and breach of trust were not established.

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Issues: Whether the ex-directors were liable under Section 543(1) of the Companies Act, 1956 for alleged misfeasance and breach of trust on account of non-handing over of share certificates and other investments to the Official Liquidator.

Analysis: Liability under Section 543(1) is civil in nature but requires the Official Liquidator to plead and prove the manner in which loss was caused by the directors' wrongful conduct. A misfeasance claim cannot succeed merely because assets were not physically handed over, especially where the record shows that the ex-directors had explained the position in correspondence, stated that the original national savings certificates were with the Sales Tax Department as security, and indicated that the remaining share certificates could be handed over on instructions. The pleadings did not show any contemporaneous objection by the Official Liquidator, any demand for the certificates, or proof of actual financial loss caused by the alleged non-delivery.

Conclusion: The ingredients of misfeasance or breach of trust were not established, and the ex-directors were not liable to pay the amounts claimed.

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