https://www.taxtmi.com/caselaws?id=98827 A bank director was held liable under section 235 of the Indian Companies Act, 1913 for misfeasance, misapplication of funds and breach of trust arising from mortgage-related transactions. The court treated the arrangement as a deliberate scheme, not a mere error of judgment, because an illusory security was taken from a defunct company to regularise liabilities and benefit selected persons. The director knew the true position, participated in the transaction and derived a benefit from it. Proof of fraud was not essential under section 235; it was sufficient that breach of duty caused misapplication or loss of company assets, making the director liable to restore or compensate the loss. en-us Tue, 09 Feb 1971 00:00:00 +0530 Fri, 08 Aug 2014 00:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=98827 A bank director was held liable under section 235 of the Indian Companies Act, 1913 for misfeasance, misapplication of funds and breach of trust arising from mortgage-related transactions. The court treated the arrangement as a deliberate scheme, not a mere error of judgment, because an illusory security was taken from a defunct company to regularise liabilities and benefit selected persons. The director knew the true position, participated in the transaction and derived a benefit from it. Proof of fraud was not essential under section 235; it was sufficient that breach of duty caused misapplication or loss of company assets, making the director liable to restore or compensate the loss. Case-Laws Companies Law Tue, 09 Feb 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=98827