2003 (7) TMI 586 - HC - Companies Law

Summary

Issues:
1. Application for permission to bring legal representatives of a deceased respondent on record.
2. Contention regarding liability of legal representatives for acts of the deceased respondent.
3. Legal position on continuing proceedings against legal representatives post the death of a respondent.
4. Requirement for legal heirs to prove non-devolvement of property or benefits from the deceased.

Analysis:

1. The Official Liquidator sought permission to bring on record the legal representatives of a deceased respondent in a recovery application. The deceased respondent was a Director of a company in liquidation, and the Official Liquidator aimed to recover dues from the legal representatives of the deceased.

2. The proposed legal representatives contested their liability, arguing that they did not benefit from the deceased's estate and should not be held responsible for the deceased respondent's actions. They claimed that only the individual concerned could defend their personal conduct, not their legal representatives.

3. The judgment referred to legal precedents, including the decision in Official Liquidator v. Parthasarathi Sinha, stating that proceedings against a Director of a company in liquidation can continue against their legal representatives post the Director's death. The liability for misfeasance proceedings can be realized from the estate of the deceased in the hands of their legal representatives.

4. The court emphasized that the legal heirs of a deceased Director must prove that no property devolved upon them and that they did not benefit from the deceased's estate. Mere oral submissions were deemed insufficient, and evidence needed to be presented by the contesting parties to determine the liability of the legal representatives for the deceased's dues.

In conclusion, the court allowed the Official Liquidator's application to bring the proposed legal representatives as heirs of the deceased respondent on record. The judgment clarified that the death of a Director does not abate proceedings for recovery of company dues, and such proceedings can be continued against the legal heirs. The burden lies on the legal heirs to establish the non-devolvement of property or benefits from the deceased.