TaxTMI 
TaxTMI 
1994 (6) TMI 186
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....ompel them to repay or restore the monies and properties of the company by way of compensation as, according to him, they had misapplied, retained or became liable or accountable for the monies and properties of the company by reason of their acts of misfeasance or breach of trust in relation to the company. 2. On a creditor's petition filed in February, 1985 (C.P. No. 10 of 1985), the company was ordered to be wound up on 16-10-1986, and the official liquidator attached to this Court was appointed as its liquidator. The respondent No. 1 was the managing director of the company at the time of its winding up and respondent No. 2 was a director. Since respondent No. 2 had left the country and could not be served in the present petition, th....
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....nt No. 1 to the extent of the amount which he failed to recover for the company together with interest. 4. The respondent No. 1 has filed a written statement controverting the allegations made by the official liquidator. The fact that the amount of Rs. 10,97,872.21 was due to the company from various debtors and another sum of Rs. 57,146.18 was due to it as loans and advances made to various parties has not been denied. It is averred that the company was floated by the respondents on 23-7-1976, and there were the two directors. The respondent No. 2 is stated to be the daughter-in-law of one M.L. Manchanda who at the relevant time was a director of the State Bank of Patiala. The company availed of various financial facilities including bi....
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....f the company. The bank filed a suit in the year 1983 against the company and the guarantors for the recovery of the amount due to it and the said suit was transferred to the file of this Court after the company was ordered to be wound up and is pending in this Court for final disposal. The defence set up by the respondent is that since he did not have access to the books of the company, he was not in a position to initiate any proceedings for the recovery of the amounts due to the company. After the suit was transferred, this Court directed the bank to open the lock of the company premises on 1-11-1987, and handover to the official liquidator whatever books of account and records were lying in the premises. It is not disputed that it was i....
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....nt of account filed by the respondent the aforesaid amounts were due to the company from different parties but the directors including the respondent took no steps to recover the same and the recovery of the amounts had become barred by time by the time the liquidator took over. The question that arises is whether the mere fact that a few debts due to the company had been allowed to become barred by time amounts to misfeasance on the part of the directors. The matter is not res integra. A similar matter arose before Falshaw, J. in Kaithal Grain & Bullion Exchange Ltd. v. Lachhman Das [1954] 56 PLR 486 where the learned judge relying on the observations of Jessel M.R. in Forest of Dean Coal Mining Co., In re [1878] 10 Ch. D. 450, held that m....