Directors not treated as express trustees; misfeasance limitation runs from the wrongful act, not winding up.

Directors were not treated as express trustees for Section 10 of the Indian Limitation Act, 1908 because company property was not vested in them in trust for any specific purpose; general control of company funds was insufficient. A misfeasance claim under Section 235 of the Indian Companies Act, 1913 was also held to be founded on an existing liability and not on a new right created by winding up, so limitation ran from the date of the wrongful act rather than from the winding-up order. The claim was therefore time-barred, and no fresh limitation period arose on liquidation.

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Issues: (i) Whether directors of a company are trustees for the purpose of Section 10 of the Indian Limitation Act, 1908; (ii) whether the liquidator's claim for misfeasance under Section 235 of the Indian Companies Act, 1913 is time-barred from the date of the alleged misfeasance or only from the winding-up order.

Issue (i): Whether directors of a company are trustees for the purpose of Section 10 of the Indian Limitation Act, 1908.

Analysis: The directors were held not to be express trustees within the meaning of Section 10. The property of the company was not vested in them in trust for any specific purpose, and the entrustment of company funds for the general conduct of business did not amount to a specific trust. The authorities distinguished express trustees from persons who may be treated as constructive trustees or as trustees only in relation to particular funds actually in their hands or under their control.

Conclusion: Directors are not trustees for the purpose of Section 10 of the Indian Limitation Act, 1908.

Issue (ii): Whether the liquidator's claim for misfeasance under Section 235 of the Indian Companies Act, 1913 is time-barred from the date of the alleged misfeasance or only from the winding-up order.

Analysis: Section 235 was treated as a procedural provision providing a summary remedy for existing rights and not as creating a new right on the making of a winding-up order. Since the liquidator's application was based on a liability already complete when the misfeasance occurred, limitation ran from the date of the wrongful act, not from the winding-up order. On that footing, the claim was already barred under the applicable articles of limitation.

Conclusion: The winding-up order does not give a fresh starting point of limitation for a misfeasance claim under Section 235 of the Indian Companies Act, 1913.

Final Conclusion: The appeal failed because the directors could rely on limitation and the liquidator acquired no new enforceable right upon winding up.

Ratio Decidendi: Section 10 of the Indian Limitation Act, 1908 applies only where property is vested in a person in trust for a specific purpose, and Section 235 of the Indian Companies Act, 1913 is a procedural remedy that does not create a new right or restart limitation on winding up.

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