1 mgj IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Company Application No. 180 of 1992 in Company Petition No.249 of 1986 Progressive Chemicals Bombay ..Petitioners and The Official Liquidator ..Applicant Vs. 1 Mr.Kanakrai Shivlal Desai and others ..Respondents Mr.S.A.Bhagwat for Official Liquidator Mr.N.M.Shah for respondent no.1 Mr.P.S.Pratap for respondent no.2 CORAM: S.J.KATHAWALLA J. 20 th August, 2009 P.C. 1 This misfeasance summons dated 10 th April 1992 is taken out by the Official Liquidator under section 543(1) of the Companies Act, 1956 seeking necessary orders and directions against the respondent nos.1 and 2 i.e. share holders and ex directors of the respondent. The company was admittedly 2 wound up by an order of this Court dated 10 th April, 1987. Respondent no.1 expired on 14 th March, 2001. Admittedly the Misfeasance summons was not served on respondent no.1 during his life time and was admittedly served on respondent no.2 only in February 2009 i.e. 17 years after the same was filed before this Court. Such delay amounts to mockery of the statutory remedy provided under the Companies Act to the Liquidator to initiate action amongst others against the erring directors of the company which is wound up. Respondent no.2 who is 74 old widow at this age cannot be made to face charges alleged against her by the Liquidator in the year 1992 and which were not served on her for the last 17 years. In my view she cannot be prosecuted or asked to answer the charges levelled against her, pertaining to a company which was wound up around 22 years back only because the office of the Official Liquidator 3 chooses to now take action against her i.e. after almost two decades. The idea behind the statute providing a period of five years from the date of the order of winding up of a company for making of an application under section 543 of the Companies Act is to ensure that the person/s who have allegedly misapplied, or retained or become liable or accountable for, any money or property of the company or being guilty of any misfeasance or breach of trust in relation to the company are not required to answer the charges levelled against them, beyond a period of five years from the date of the order of winding up of a company. Despite this mandatory requirement if this practice of slapping the charges on ex-directors, etc. after 17 years is allowed, this Court will be failing in its duty of dispensing justice and any action now taken will tantamount to wrongly causing harassment to the ex- 4 directors on the eve of their lives. 2 I am informed by the Advocate appearing for the Official Liquidator that this Court by its order dated 2 nd February, 2009 had appointed an Advocate to inter alia go through the papers pertaining to the present company application and to submit his report to the Official Liquidator within a period of two weeks and the Official Liquidator was directed to thereafter file his final report before this Court within three weeks. Admittedly the final report of the Liquidator is also not placed before this Court as directed by this Court by its order dated 2 nd February, 2009. This conduct further shows that even after the period of almost two decades the directions which were passed by this Court on 2 nd February 2009 are not followed by the office of the Official Liquidator. 3 In the circumstances, I am left with 5 no other alternative but to dismiss this misfeasance summons, since granting any further time to the Official Liquidator to pursue this application pending on the files of this Court since 10 th April 1992, will cause grave injustice to respondent no.2 who is a 74 years old widow. 4 The Official Liquidator is directed to submit a report before this Court within four weeks from today setting out how the office of the Official Liquidator intends to take effective steps in dealing with applications under section 543 of the Companies Act, 1956 pending before this Court and the applications filed in future to avoid the said applications from being dismissed on similar grounds. (S.J.KATHAWALLA J.)