9911796707
TMI Blog1977 (4) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... thinks it proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct. On the hearing of an application under this sub-section, the official liquidator or the liquidator, as the case may be, may himself give evidence or call witnesses. (2)( a )Where the court makes any such declaration, it may give such further directions as it thinks proper for the purpose of giving effect to that declaration. ( b )In particular, the court may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his behalf. ( c )The court may, from time to time, make such further order as may be necessary for the purpose of enforcing any charge impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misfeasance or breach of trust, as the case may be, whichever is longer. (3) This section shall apply notwithstanding that the matter is one for which the person concerned may be criminally liable." The submission on behalf of the person proposed to be impleaded as legal representatives of the deceased director is that the liability sought to be imposed upon a director under sections 542 and 543 of the Companies Act is, in its nature, so personal and peculiar to the director that it cannot be foisted on his legal representatives in the absence of clear and specific provisions for so doing in sections 542 and 543. In our view, the question whether proceedings under sections 542 and 543 survive the death of the director is not to be answered with reference to the maxim actio personalis moritur cum persona or on a consideration of the question whether the liability sought to be imposed by sections 542 and 543 is tortious, quasi-contractual or otherwise. The question has to be answered with reference to the object and the language of the two provisions. If the object of the provisions is punitive, to punish the wrongdoing director, the proceedings must die with the director. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard before his death. Of course, the liability declared, after hearing the legal representatives, will be that of the deceased director and the directions, if any, given to the legal representatives will naturally be limited to the estate of the deceased director in the possession of the legal representatives. Section 543 provides for the assessment of the loss or damage suffered by the company consequent on acts of misfeasance or breach of trust committed by directors and officers of the company and for the making of a compulsive order of repayment against the director. Though the object of assessing the damages is for the purpose of recompensing the loss suffered by the company and, therefore, the cause must survive the death of the director to that extent, the language of the provision in so far as it relates to the compulsive order is so peremptorily directed against the director that it must be held that the compulsive order contemplated by the section cannot be made against the legal representatives. Thus, while the loss or damage may be determined and declared even after the death of the delinquent director, no compulsive order may be made against the legal representatives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continuing these proceedings against a past director, even though he be dead, the proceedings could continue after giving persons who may be interested opportunities to be heard. But even such proceedings can only result in a declaration of the liability of a deceased director, because the language of section 235 of the Act of 1913, as already noticed, does not authorise passing of orders to compel heirs or legal representatives to do anything. Such compulsive proceedings as may become necessary against those upon whom devolve the assets or the estate of a deceased delinquent director, who may have become liable, could only lie outside section 235 of the Act of 1913....It may be possible (though we need express no final opinion on the matter) where a proceeding under section 543 is covered also by the terms of section 542 of the Companies Act of 1956, to give directions to persons other than those whose conduct is enquired into, including directions to heirs and legal representatives, for the purpose of enforcing a declaration. But we think that the power under section 235 of the Act of 1913, which corresponds to section 543 of the Act of 1956, would not extend beyond making a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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