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TMI Blog1980 (4) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... concerning vehicle No. MYW-4666. The company had financed this vehicle to one Mr. Satya Pal Bhutani under a hire purchase agreement. This vehicle was repossessed by the company in 1966 in pursuance of the said agreement. The appellant was the managing director of the company at that time. It was alleged in the petition that the appellant on June 12, 1967, had purported to direct the chowkidar of the company to deliver the vehicle to respondent No. 2 for sale. For that there is no receipt on the records of the company from respondent No. 2 evidencing the receipt of the vehicle; that neither the vehicle nor the sale proceeds have been handed over to the official liquidator and that the same, therefore, had been retained wrongfully by the appellant and respondent No. 2 who are liable to return the said vehicle and its sale proceeds. The learned judge on May 17, 1974, held that the appellant cannot be proceeded against under section 543 of the Companies Act, as such an application had to be moved within five years from the date of order of winding up. Again on September 2, 1975, the learned judge refused the prayer to summon the appellant under section 477 of the Act. He, however, hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30, 1972, that they informed the official liquidator that the truck was not delivered to them. As both the periods were within three years from the date of the filing of the application by the official liquidator the same was held to be within time. Mr. Jain, the learned counsel for the appellant, challenges the finding of the learned judge as to the applicability of section 10 of the Limitation Act, the contention being that the property of the company, that is the vehicle, cannot be said to be vested in the director. He has referred to Bank of Multan Ltd. v. Hukam Chand, AIR 1923 Lah. 58(2), which has held that the property is not vested in the company-director and section 10 of the Limitation Act is not applicable. He also seeks aid from Brahmayya Co., Official Liquidators, Hanuman Bank Ltd. v. V. S. Ramaswami Aiyar, AIR 1966 Mad. 247, that the directors are not the trustees. We do not deem it necessary to decide this aspect of the case because as we shall presently show the claim was within time under section 446 of the Act, as falling within article 137 of the Limitation Act and it is not necessary to invoke any other provision of the Limitation Act. For similar re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not correct to say that the right to apply accrued only in 1972. We cannot agree. In Mst. Rukhmabai v. Lala Laxminarayan, AIR 1960 SC 335, it was held that "there can be no 'right to sue' until there is an accrual of the right asserted in the suit and its infringement, or at least a clear and unequivocal threat to infringe that right, by the defendant against whom the suit is instituted". Applying the ratio of that case when can we say that the right to apply accrued ? According to the facts found, the vehicle was repossessed by the company on April 25, 1965. The vehicle remained with the company till June 12, 1967. According to the appellant he directed the chowkidar to give this vehicle to respondent No, 2 for the purposes of selling it. There is nothing on record to show that at any time between 1967 and August 12, 1968, when the order of winding up was passed there was any denial by respondent No. 2 to return the vehicle or by the appellant disowning that the vehicle had been repossessed by the company or that the same had been given to respondent No. 2. The official liquidator who came on the scene wrote on September 9, 1969, to respondent No. 2 seeking information a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as handed over under the orders of the appellant to respondent No. 2 ; this finding has not been disputed before us. Mr. Jain, however, would have it that once it was proved that the truck was handed over even by the appellant's order to respondent No. 2 the liability of the appellant was exhausted. We find that unacceptable. Before the liability of the appellant could be discharged he has to establish that the truck was given rightly to respondent No. 2, and in pursuance of some right of respondent No. 2 to receive the truck. Now, even the appellant in his evidence explained that the truck was given to respondent No. 2 as certain money was owed by the company and respondent No. 2 was in a better position to sell the truck. He admitted that he was never told what had been done by respondent No. 2 about the proceeds of the truck. He also admitted that the legal owner of the truck was the company because the document of the truck had not been given to respondent No. 2. No doubt the respondent No. 2 denied having received the truck. But that finding is against them and Mr. Jain does not dispute that finding. The position is that the truck belonging to the company was given to responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case the claim can be ordered against the appellant, we see no difference in the present case, where the truck is with respondent No. 2 under authority of the appellant. Passing it on to respondent No. 2 is still an act of the appellant and his liability to account for it would continue. Mr. Jain had also sought to contend that proceedings under section 446 cannot be maintained against a director. No precedent was cited for such a position nor is it supported on any principle of law. No doubt sections 477, 542 and 543 of the Companies Act empower the court to proceed against the director and assess his liability for fraudulent conduct of the business, and no doubt benefit of section 543 for extended limitation is also available for proceeding against a director if he has misapplied any property of the company, it does not mean that if there is a claim for which limitation is still available by applying under section 446, this remedy is prohibited. Section 543 of the Act does not exclude moving against the director under section 446 of the Act. Both of them are not mutually exclusive. As to what provision would apply would depend on the facts of each case. To take an illustra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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