JOSELIN Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) These appeals have been filed against an order passed by the learned Company Judge allowing three applications filed by the Official Liquidator to bring on record in a misfeasance proceeding Application No. 153 of 1971 in C.P. No. 27 of 1965 Initiated under S.543 of the Companies Act. 1956 (hereinafter referred to as the Act) the legal representatives of three Directors who died during the pendency of the misfeasance petition. The question raised in these appeals is whether it was legally open to the Company Court to direct the impleadment of the legal representatives of the deceased Directors in the proceedings started under S.543. The appellants who have raised this question are the legal representatives of the three deceased Directors.

(2.) A Company by name Alwaye Chit Funds (P) Ltd. was ordered to be wound up in C.P. No. 27 of 1965 and in the winding up proceedings the Official Liquidator filed Application No. 153 of 1971 praying that action should be initiated under S.543 of the Act against the past Directors of the Company on the ground that they had committed acts of misfeasance, breach of trust, etc., in relation to the Company. During the pendency of that application three of the respondents died. The 1st respondent died on 21st November, 1973. The 8th respondent died on 20th May, 1974 and the 9th respondent died on 18th August, 1976. Applications were filed by the Official Liquidator for impleading the legal representatives of these respondents only on 22nd November, 1976. The Liquidator also prayed for condonation of the delay and for setting aside the abatement. Those applications were resisted by the legal representatives of the deceased respondents, who are the appellants before us, by contending that the special remedy given under S.543 of the Act does not survive the death of the concerned Director and that in any event sufficient grounds were not shown by the Liquidator for condonation of the inordinate delay and setting aside the abatement that had already taken place. The learned Company Judge overruled the objections raised by the legal representatives and allowed the applications filed by the Official Liquidator. Hence these three appeals by the legal representatives of the three respondents.

(3.) Although it was contended before us on behalf of the appellants that the maxim 'actio personalis moritur cum persona' is applicable in respect of the proceedings initiated against a delinquent Director under S.543 of the Act and the rulings in Manilal Brijlal v. Vendravandas C. Jadav and others, (AIR 1944 Bom. 193) Pattiam Veettil Menokki Sankaran Nambiar v. Kottayam Bank by Official Liquidator, Tellicherry and others, ( AIR 1946 Mad. 304 ) and In re The Peerdan Juharmal Bank Ltd. (in liquidation) by its Joint Official Liquidator, ( AIR 1958 Mad. 583 ) were strongly relied on by the learned advocate for the appellants in support of the above contention, the matter is directly concluded against the appellants by the pronouncement of the Supreme Court in Supreme Bank v. P. A. Tendolkar, ( AIR 1973 SC 1104 ). After an exhaustive review of the decisions rendered on the point by the various High Courts in India inclusive of the decisions in AIR 1944 Bombay 193, AIR 1946 Mad. 304 and AIR 1958 Madras 583, the Supreme Court stated its conclusion as follows :-