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TMI Blog1957 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... made disbursements to four creditors including himself to the tune of about Rs. 7,000. Upon an application made by the respondent No. 1 and another person Shri Verma was removed from his position as liquidator and in his place the respondent No. 2, Shri K.S. Mishra, Advocate, Nagpur, was appointed a liquidator by the District Judge, Nagpur. Shri Mishra issued notices to the, four persons including Shri Verma whose debts had been paid off by Shri Verma to refund the amount paid to them. Shri Verma was ordered by the court to repay the amount which he had paid to himself. An appeal preferred by him before the High Court against the order requiring him to pay the amount was dismissed by Sinha C.J. A Letters Patent Appeal was preferred from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the company" as defined in section 2 of the Act. It is true that the definition of "officer" is wide enough to include a director of a company but the matter does not end there. A person may be a director of a company but unless he has received any money in his capacity of a director the provisions of section 185 would not be attracted. It may be mentioned that each of the appellants had advanced monies to the company for enabling it to carry on its activities which had been thwarted because of want of funds. They did not advance the monies as directors, that is to say, the monies advanced by them were not required to be advanced by them in their capacity as directors by virtue of any contract between them and the company or otherwise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation in respect of the misapplication, retainer , misfeasance or breach of trust as the court thinks just." For this provision to apply, two conditions must be satisfied. The first is that the person against whom an order is made must belong to one of the categories specified and the second condition is that he must have either misapplied or retained any fund or become liable or accountable for any money or property of the company or been guilty of any misfeasance or breach of trust in relation to the company. Now, as already stated, the appellants did not come by the money which is now sought to be recovered from them in their capacity as directors. Being creditors they were paid, though perhaps wrongly, what was due to them, by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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