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TMI Blog2006 (10) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... s and officers of the company by name Kaumudi Exporters (P.) Ltd., had misapplied, retained or become liable or accountable for any money or property of the company or were guilty of misfeasance of breach of trust in relation to the company. Further, applicant also stated that respondent Nos. 2 to 8, were former managing director or directors of the company and they had retained or misapplied or misappropriated the funds of the company and had become liable or accountable to refund an amount of Rs. 5,54,910 to the company and their action in the matter of retention or misapplication or misappropriation of amounts is due to misfeasance or breach of trust in relation to the company. In order to establish the applicant s case PW1, was examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 390 , Ganesh Export Import Co. v. Mahadeolal Nathmal [1955] 25 Comp. Cas. 357 , F C Osler (India) Ltd., In re [1978] 48 Comp. Cas. 698 and Official Liquidator, Modern Transporters (P.) Ltd. v. Mulkh Raj Mehta [1971] 41 Comp. Cas. 573 (Punj. Har.). 3. Shri Pathrose Mathai, senior counsel appearing for respondent Nos. 4, 5, 7 and 8, on the other hand contended that the appellant has not succeeded in establishing the ingredients of section 543 and the learned Company Judge has rightly dismissed the application in the absence of any specific allegation against the former managing director or the directors of the company or the role played by them in the alleged misappropriation or misapplication of the money. In support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, counsel submitted that even though C.A. No. 164 of 1992 was filed by respondent Nos. 2, 3 and 6 for production of the accounts of the Canara Bank that was not done. 4. We have heard counsel on either side and perused the documents as well as the oral evidence by P.W.1. We are of the view; the mere fact that the applicant had advanced security deposit does not mean, that the amount has been retained or misapplied; by any of the directors personally. Burden, in our view, is on the person who alleges that any of the directors has misapplied or retained to prove that the directors had misapplied or retained the amount which is legitimately due to him from the company in liquidation. Section 542 of the Companies Act is extracted below f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal may, from time to time, make such further order as may be necessary for the purpose of enforcing any charge imposed under this sub-section. ( d ) For the purpose of this sub-section, the expression assignee includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest was created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made. (3) Where any business of a company is carried on with such intent or for such purpose as is mentioned in sub-section (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty or any part thereof respectively, with interest at such rate as the Tribunal thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust, as the Tribunal thinks just. (2) An application under sub-section (1) shall be made within five years from the date of the order for winding up, or of the first appointment of the liquidator in the winding up, or of the misapplication, retainer, 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." 6. Section 543 deals with acts of commission and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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