Proceedings under Section 235 of the Companies Act cannot be continued against the heirs of a deceased director.

Shahabuddin, J.

1. The point for determination in this Civil Revision Petition is whether proceedings started against a director of a company under Section 235 of the Indian Companies Act can be continued after his death by bringing his legal representatives on record.

2. The petitioner started proceedings under Section 235 against the directors of a company in liquidation one of whom, Krishnan Nambudiri, died before the enquiry was over. The petitioner then filed the application out of which this civil revision petition arises to bring the respondents on record as the heirs of Krishnan Nambudiri. This application was opposed on the ground that it could not be continued after the death of the deceased director. The learned District Judge of Tellicherry relying on the decision of the Allahabad High Court in Official Liquidators, Mufassil Bank v. Jugal Kishore I.L.R. (1939) All. 6 accepted this contention and dismissed the petitioners application.

3. In Official Liquidators, Mufassil Bank v. Jugal Kishore I.L.R. (1939) All. 6 it was held that proceedings under Section 235 of the Companies Act against a director cannot after the death of the director during the proceedings be continued against his heirs as representing his estate. The Bombay High Court in Manilal Brijlal v. Rao Sahib Vandrawandoss I.L.R. (1944) Bom. 284 a decision cited on behalf of the respondents has taken the same view. It held that it was never intended to involve the Court on an application under Section 235, in an enquiry relating to the estate of a deceased person. The learned advocate for the petitioner does not refer to any decision in his favour; but he relies on Section 198 of the Companies Act and the provisions of the Code of Civil Procedure with regard to the bringing on record of the legal representatives. His argument is this. Under Section 198 of the Companies Act the Court has the power to institute proceedings against the estate of a contributory or a debtor of a company. This power can therefore be exercised by the Court in proceedings under Section 235. Under Section 141 of the Code of Civil Procedure provisions relating to the bringing on record of legal representatives are applicable to cases arising under the Indian Companies Act. Having regard to these two provisions the application of the present petitioners should have been allowed.

4. I am unable to accept these contentions. Section 198 of the Companies Act deals with the powers of the Court with regard to the estate of a contributory or a debtor but there is nothing in that section to indicate that these powers can be exercised in a summary proceeding under Section 235. As regards the provision in the Code of Civil Procedure reference is made to Order 22, Rule 4 of the Code of Civil Procedure, but this provision applies only if the right to sue survives. The question whether the right to continue a proceeding under Section 235 of the Companies Act, survives has to be determined on the language of that section. This, the learned Judges have fully considered in the above mentioned decisions and having regard to the language of Section 235 I respectfully agree with their view that a proceeding under that section cannot be continued against the heirs of a deceased director. I therefore see no reason to interfere. The petition is dismissed with costs.