TaxTMI 
TaxTMI 
2010 (11) TMI 844
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.... creditors together with interest thereon shall constitute the first charge on the property and effects in their possession ; and to direct payment of costs. 2. By an order dated September 17, 2003, passed in C. P. No. 6 of 2001, M/s. Indus Marketing Ltd., was wound up and the official liquidator was directed to take charge of the assets and effects of the company. The said company was incorporated on June 21, 1991, with a nominal capital of Rs. 10 lakhs and its latest registered office was at No. 4, Mannar Reddy Street, T. Nagar, Chennai. The main objects of the company were to market, distribute, stock, trade, import, export, buy, sell or otherwise deal in all consumer durables, household articles, industrial products, electrical, electronic, mechanical goods and other goods of any nature. 3. As per the records of the Registrar of Companies, the respondents were the directors and the company had two secured creditors, viz., the Bank of Baroda, and the Union Bank of India. The liquidation was at the instance of M/s. Sundaram Finance Ltd. As against the order of winding up, the company under liquidation has filed O. S. A. No. 372 of 2003 and there was an order of interim stay....
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....ile that is not finding place in the statement of affairs and that was not handed over to the official liquidator. 9. The official liquidator has neither called for the claims from the creditors of the company in liquidation, nor received any claims voluntarily. 10. The fund position of the company as on date is as follows : Rs. (i)Cash . . . 2 (ii)Bank . . . 44,578 (iii)Investment . . . Nil Total 44,580 11. According to the official liquidator, the ex-directors have failed to furnish the amount regarding stock-in-trade to the tune of Rs. 14,07,045 and defaulted in submission of proper explanation ; that while the amount due from the trade debtors as per the balance-sheet as on March 31, 1993, was given as Rs. 5,57,212.57, it is shown as " nil" in the statement of affairs and there are no details of names, address and other particulars ; that there is a difference of Rs. 2,20,90,829 in the matter of dues towards unsecured creditors shown in the statement of affairs and the balance-sheet as on March 31, 1993 and there is no clarification given by the ex-directors for the said excess amount shown in the statemen....
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.... Rs. 1,67,816 as on March 31, 1993 and due to wear and tear over the years, the value of the vehicle declined and it was ultimately sold and therefore, the statement of affairs did not disclose the particulars of vehicle. 16. It is also stated that the accounts of the company with the Bank of Baroda were closed in the last quarter of 1998-99 and the cash credit account with the Union Bank of India was also satisfied and closed in the year 2006-07 and it was settled and closed in the month of June, 2006. In view of the said categoric statement made by the respondents in the counter affidavit regard the two secured creditors, there is no necessity to presume that there are secured creditors in existence. 17. It is stated that the ex-directors have not acted against the interest of the company. It is also stated that inasmuch as action to be taken under sections 542 and 543 of the Companies Act, 1956, is quasi-criminal in nature, there must be specific allegation and proof regarding the acts of dishonesty by each and every director in the affairs of the company for the purpose of making the directors liable. 18. In the additional affidavit filed by the first respondent, it is....
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.... the part of the erst while directors either in committing fraud or causing loss to the company in liquidation. The charges in these sort of cases have to be specific and it must be brought to the notice of this court that the term misfeasance or breach of trust is certainly relatable not only to intentional act of the directors, but also to the deliberate conduct of the ex-directors which has resulted in the loss to the company under liquidation, for the rule actus non facit reum nisi mens sit rea is applicable in these cases of misfeasance. 23. This court in Official Liquidator v. V. Selvaraj [2011] 106 SCL 56 (Mad.), while construing sections 542 and 543 of the Companies Act, 1956, has held as follows (page 185) : " . . . it is clear that when an application under sections 542 and 543 of the Companies Act is made relating to the allegation of fraud or breach of trust or misappropriation, to prove such allegation which is being criminal in nature, it is necessary that there should be mens rea aspect on the part of the ex-director either in committing fraud or causing loss to the company under liquidation. Such conduct of fraud or breach of trust must be specifically pleaded....