The Ex-directors of a company are liable for misfeasance and breach of trust if they withdraw the company's funds without paying any interest thereon, resulting in the company's liquidation. The heirs of the deceased Ex-director are also liable to refund the amount to the extent of the value of the estate of the deceased in their hands.

ASHIM KUMAR BANERJEE, J.

( 1 ) COMPANY Application No. 15 of 1977 has been filed by the Official Liquidator under Sections 542, 543, 468, 469 and (1 466 of the Companies Act, 1956 against Ram Swarup, Exdirector of M/s Ram Chand and Sons Sugar Mills (P) Limited (in liq.) (in short Company in liq.) Company Application No. 16 of 1977 has been filed under similar provisions against Raj Rajeshwar Swarup and 3 others who are the heirs of Late Lala Roshan Lal, one of the directors of the Company (in liq. ). Substantially the points involved in the aforesaid cases are almost same and as such are being decided by a common judgment.

( 2 ) THE relevant facts, in brief, are that Panna Lal and Roshan Lal were two brothers. In the year 1932 a registered partnership Firm was started of which Roshan Lal and his son Ram Swarup and his two nephews namely, Purshottam Dass and Jugal Kishore (sons of Panna Lal) were the partners. In the year 1951 the partnership Firm was converted into a Private Limited Company of which the four partners mentioned above were the first directors. Purshottam Das died on 31-10l960 and by are solution of the Board of Directors his widow, namely Smt. Padmavati, was inducted as a Director. On 28-4-1963 Roshan Lal also died and his grandson Raj Rajeshwar Swarup was inducted as a director. The Company which was carrying on the business of manufacturing sugar at Barabanki in the State of Uttar Pradesh suffered heavy loss and proceedings for winding up were initiated against the company in the year 1968 by filing Company Petition No. 9 of 1968. By an order dated 22-8-1972 passed in Company Petition No. 9 of 1968 the Company was ordered to be wound up and the Official Liquidator, High Court, Allahabad, was appointed the Liquidator. On the date of the winding up order the four directors of the company were (i) Jugal Kishore, (ii) Smt. Padamavati, (iii) Ram Swarup and (iv) Raj Rajeshwar Swarup. The Liquidator called upon the directors to submit the statement of affairs under Section 454 of the Act. In response to the same initially an affidavit was filed by Ram Swarup and other directors, inter alia, admitting that as per the books of account of the Company certain amounts specified in the said affidavit were received by the directors. Subsequently, a revised statement of affairs as required under the Act was filed on 23-12-1975 with the Official Liquidator. This discloses that about rupees Forty Lacs were due to the Company from the Exdirectors of the Company who had withdrawn the said sum from time to time from the Company. The statement further reveals that this money had been taken by the directors as interest free loan but had not been returned to the Company despite the fact that the financial condition of the Company was in a dire state and huge amounts were due towards Income-tax, Provident Fund of the work men and other dues. The Official Liquidator served notices individually to the Ex-directors and the heirs of the deceased directors calling upon them to pay back the amount withdrawn by them from the Company prior to the date of the winding up order alongwith interest. However, as there was no response from the said parties Company Application No. 31 of 1976 was filed against Smt. Padmavati and others in their capacity as the heirs of deceased director Purshottam Das under Sections 542, 543, 468, 469 and 466 of the Companies Act, 1956 on the ground that the money had been unlawfully retained and had been misapplied by holding it without paying any interest and applying the same for the personal gain. Therefore, a charge of misfeasance and fraudulent trading is made out against the said parties. Similarly, under the same provisions of the Act, Company Application No. 32 of 1976 was filed against Smt. Padmavati in her capacity as director of the Company; Company Application No. 34 of 1976 was filed against Jugal Kishore, another director and Company Application No. 33 of 1976 was filed against one Tirath Ram, who had a