F AND C OSLER INDIA LTD Vs. STATE

JUDGEMENT

(1.) This is a misfeasance summons taken out by the official liquidator in November, 1963, under Section 543(1) of the Companies Act against six respondents, respondent No. 1, Haridas Mundhra ; respondent No. 2, his father, Gwaldas Mundhra ; respondent No, 3, his brother, Tulsidas Mundhra; respondent No. 4, Manickchand Bagree ; respondent No. 5, L.R. Josse, since deceased, and respondent No. 6, Shew Bux Mohta. Of the six respondents, Haridas Mundhra, though he was duly served with the summons yet he has neither entered appearance nor has defended these proceedings or appeared before me except just before the commencement of the proceeding. Early this year, an application was filed by him and others by his counsel, Mr. Partha Mukharji, for adjournment on frivolous and mala fide grounds which I dismissed by a speaking order.

(2.) A point was raised by the learned counsel appearing for some other respondents that this application should not continue in its present form as Haridas Mundhra has since been adjudicated as an insolvent in 1974 and the official assignee should be brought on record. As stated earlier, this application was taken out on November 26, 1963, and Haridas Mundhra did not enter appearance or take any part in the proceedings since its inception and he was only adjudicated an insolvent in 1974. In my opinion, a declaration of insolvency of a director during the pendency of a misfeasance summons is of no consequence to the hearing of this matter. It is a personal action and/or enquiry against the director for his past act as director of the company for breach of trust, misappropriation and other wrongful conduct and as such his subsequent insolvency cannot protect him from his personal liability and responsibility for committing breach of trust or misappropriation of the company's funds for which this proceeding has been launched long ago. I, therefore, negative this point of demurrer.

(3.) Another point raised by some of the respondents is that L.R. Josse having died during the pendency of these proceedings, the proceedings have abated but: I negative that contention following the recent decisions of this court and the Supreme Court in In re Central Calcutta Bank Ltd. [1959] 29 Comp Cas 427 (Cal) and Official Liquidator, Supreme Bank Ltd. v. P.A. Tendolkar [1973] 43 Comp Cas 382 (SC). It is clear that as the liability of directors for misfeasance is joint and several, so the death of one of the directors will not abate the proceedings. I, therefore, reject this preliminary ground also. The other directors have entered appearance, filed their affidavits and are appearing before me through their lawyers but none of them have deposed before me or personally appeared before me.