Judgment : P. Jyothimani, J. This application is taken out by the Official Liquidator to make the respondents who are ex-directors of the company under liquidation liable for misfeasance under Sections 542 and 543(1) of the Companies Act, 1956 and also to hold that they are liable severally to pay compensation of Rs. 27,85,940/-being the loss caused, to the company and also the future claims from the creditors with interest at the rate of 12% p.a. from the date of winding up viz., 19. 2000; and to declare that the respondents are personally liable and that the above liability shall constitute the first charge on the properties and effects in possession of the respondents. 2. By an order dated 19. 2000, passed in C.P. No. 138 of 1998, the Official Liquidator was appointed as provisional liquidator for M/s. South Point Enterprises Private Limited, which is a company under liquidation. The said company was incorporated in the year 1994 having its Registered Office originally at Anna Nagar East, Chennai and subsequently at Flat No. A-1, Ashok Aiswaralayam, 13, Abibullah Road, T. Nagar, Chennai-17 with the share capital of Rs. 60,000/-. The object of the company was to carry on the business to import, export, buy, sell, etc. the goods, products, articles, merchandise and machineries and to carry on business and to act as merchants, commission agents, etc. in India or in any part of the world. On the date of liquidation, the respondents remained as Directors of the company. 3. After the liquidation, the Ex-Directors were directed to file statement of affairs within 21 days. The first respondent filed the statement of affairs and from the same, various irregularities were found viz., in the trade debtors category, a sum of Rs. 97,000/-is due from a company but the address or relevant documents relating to the said company were not furnished to the Liquidator. It is stated that with the said company, the transactions were made in the years 1994-95 and 1995-96 and the Ex-Directors let the debts time barred. 4. In respect of loans and advances category, it was stated that a sum of Rs. 6,99,902/-was due to the company from some debtors and the said transactions pertained to the year 1995-96 and 1996-97 and the Ex-Directors have not taken any reasonable steps to recover the said amount and the debt notices issued were returned for want of correct address. 5. 6,99,902/-was due to the company from some debtors and the said transactions pertained to the year 1995-96 and 1996-97 and the Ex-Directors have not taken any reasonable steps to recover the said amount and the debt notices issued were returned for want of correct address. 5. Under the unsecured creditors category, it was stated that a sum of Rs. 19,89,038/-was due by the company to various creditors of the company and the liability was created due to mismanagement and maladministration of day-to-day affairs of the company by the Ex-Directors. .6. The second respondent in his counter affidavit has stated that what was stated by him in the statement of affairs in list-E relating to some letters dated 7. 2007, 19. 2007 and 19. 2007 of the unsecured creditors are all only remuneration received by him and they are not loans and there was no borrowal or loan from unsecured creditors and in effect, there are no unsecured creditors at all. 7. It is relevant to point out at this stage that during the course of arguments, the learned Official Liquidator has also fairly submitted that there are no unsecured creditors and therefore, the claim of Rs. 19,90,038/- is not pressed. 8. In addition to that, it is relevant to note that in respect of the above said letters dated 4. 2007, 19. 2007 and 19. 2007, the concerned persons have given certificates to the effect that the amounts paid by M/s. Afcons Infrastructure Limited, col. V.V.M. Muthu, M/s. L.U. Krishnan & Co., Chartered Accountants and M/s. L.U.K. Consultancy Private Limited were all amounts received by the first respondent only towards remuneration and they were never advanced as loan either to the first respondent or to the company under liquidation. The said certificates given by those which have been filed in the typed-set of papers would go to show that there are no claim of unsecured creditors. However, as it is stated earlier, the learned Official Liquidator has given up the claim in respect of it. 9. In respect of the other held, viz., trade debtors, it is stated that the respondent themselves have taken steps with the addresses available in the records and the persons who are liable to pay the amount to the extent of Rs. 9. In respect of the other held, viz., trade debtors, it is stated that the respondent themselves have taken steps with the addresses available in the records and the persons who are liable to pay the amount to the extent of Rs. 97,000/- have left the places and the respondents were not able to take any further steps since they are not able to find out the correct addresses. Regarding the head, loans and advances, the same is denied stating that the company under liquidation has never made any profit and in spite of the efforts taken, they could not recover the amount and therefore, there is no intentional act or deliberate conduct on the part of the respondents/Ex-Directors. .10. It is the contention of Mr. Murali, learned counsel for the Ex-Directors that while there are no unsecured creditors as it was found on facts, in respect of recovery from third parties who had received money either as trade debts or loans and advances, steps ‘were taken by the Ex-Directors with the addresses furnished by the said persons and in spite of the efforts taken, it was not possible to find out the whereabouts of those persons and, it is not intentional especially in the circumstances that’ there are no secured creditors of the company and therefore, it cannot be construed as misfeasance. He would rely upon the judgment of the Delhi High Court in Official Liquidator, Milan Chit Fund & Finance P. Ltd. v. Joginder Singh Kohli and Others 1978 (48) Comp. Cas 357 (Delhi) and the order of this Court Official Liquidator, High Court v. Gautham Dhiraj Mal Ranks and Others and GDA Security P. Ltd. v. Mangal Processing Mill Ltd. 2008 (141) Comp. Cas 129 (Madras) to substantiate his contention that misfeasance or nonfeasance of general nature without pinpointing the specific act of dishonesty would not attract the provisions of Section 543(1) of the Companies Act. 11. It is seen in the records placed before this Court that except stating generally that there are trade debtors of the company under liquidation to the extent of Rs. 97,000/-and persons to whom loans and advances were made to the extent of Rs. 11. It is seen in the records placed before this Court that except stating generally that there are trade debtors of the company under liquidation to the extent of Rs. 97,000/-and persons to whom loans and advances were made to the extent of Rs. 6,99,902/-, that the same related to the transactions of the years 1994-95 and 1995-96 and that the Ex-Directors have not taken action to recover the amounts and allowed the debts to be lapsed by limitation, there are no specific instances or dishonest instances on the part of the Ex-Directors. 12. Again, in respect of unsecured creditors, on record, it is proved that there are no unsecured creditors of the company and the claims which are made to the extent of Rs. 19,89,038/- have been admitted by the learned Official Liquidator to be remuneration received by the first respondent, being one of the Directors and not paid to the company under liquidation by way of loan or otherwise. 13. Section 543(1) of the Companies Act makes it very clear that the liability is attributable to the Ex-Directors only if it is found that the moneys of the company under liquidation have been misapplied or there has been misfeasance or breach of trust. Section 543 is as follows: “543: Power of Court to assess damages against delinquent directors, etc.- .(1) If in the course of winding up a company, it appears that any person who has taken part in the promotion of formation of the company, or any past or present director, manager, liquidator or officer of the company- (a) has misapplied, or retained, or become liable or accountable for, any money or property of the company; or .(b) has been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of the official liquidator, or the liquidator, or of any creditor or contributory, made within the time specified in that behalf in sub-section (2), examine into the conduct of the person, director, manager, liquidator or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respectively, with interest at such rate as the Court 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 Court 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.” 14. The term misfeasance or breach of trust is certainly relatable not only to intentional act of the Directors, but also to the deliberate conduct of the Ex-Directors which has resulted in the loss to the company under liquidation. Therefore, to constitute misfeasance under the said provision, the intentional act or deliberate conduct which is detrimental to the interest of the company under liquidation on the part of the Ex-Directors is a sine qua non. .15. Similarly, Section 542 of the Companies Act also relates to the fraudulent conduct of business in which case, on recording evidence or hearing the parties on the application by the Official Liquidator, the Court can pass orders. At this stage, it is also relevant to note that when the official of the Official Liquidator who has chosen to give evidence in this application, has admitted that any Ex-Director is not specifically stated to be responsible for day to day affairs of the company in the misfeasance report. It is also stated in the evidence that he has not mentioned in the misfeasance application that the books of account are available with Ex-Directors. It is also stated that he has not specifically mentioned the name of any Ex-Director who has mismanaged or misadministered the company in the misfeasance report. It is also stated in the evidence that he cannot state from misfeasance report that he has specifically mentioned the role of Ex-Directors of the company and he has also found no defect in the statement of affairs filed by the first respondent. It is therefore admitted that the misfeasance report itself has been filed on the basis of the statement of affairs filed by the first respondent being one of the Ex-Directors and in the statement of affairs he has not found any defect or discrepancy. It is also admitted that it is correct to state that without specifically mentioning the names of Ex-Directors, the misfeasance report has been filed generally. .16. It is also admitted that it is correct to state that without specifically mentioning the names of Ex-Directors, the misfeasance report has been filed generally. .16. In Official Liquidator, Milan Chit Fund & Finance P. Ltd. v. Joginder Singh Kohli and Others (supra), while referring to the contents of statement of affairs filed by the Ex-Director under Section 454 and also with reference to Section 543 of the Companies Act, the Delhi High Court has held as follows: .“16… No specific conduct is attributed to any of these respondents. However, in paragraph 11, it is alleged that a number of members of the company, including respondent No. 4 had made default in payment of the final call of Rs. 40 per share which was payable by 33. 1965, the liability of a member of a joint stock company to contribute to the assets of the company is provided under Section 426 of the Act. The failure to make the requisite contribution does not appear to attract any of the provisions of Sections 542 and 543 of the Act. The official liquidator is entitled to take appropriate proceedings to enforce this liability counsel for the applicant was unable to show how such a liability could be enforced under any of the provisions which had been invoked in the present application. The application must, therefore, be dismissed in relation to these two respondents as well.” 17. That was also the view of this Court in Official Liquidator, High Court v. Gautham Dhiraj Mal Ranka and Others (supra) wherein S. RAJESWARAN, J. under similar circumstances by referring to the judgment of the Supreme Court in Official Liquidator v. Raghawa Desikachar (Manu/SC/0026/1974), wherein it was held that misfeasance against a Director being a serious charge of misconduct or breach of trust, must contain the detailed narration of specific, acts of commissions and omissions and the burden of proof of misfeasance or non-feasance rests on the Official Liquidator, has held that if the specific instance of dishonesty or misappropriation of individual Director is not pinpointed and sweeping and general allegations are made, the same cannot be a ground for this Court to proceed under Section 543 of the Companies Act. In fact, the learned Judge has quoted the judgment of the Delhi High Court in Security and Finance P. Ltd. v. B.K. Bedi 1991 (71) Comp. In fact, the learned Judge has quoted the judgment of the Delhi High Court in Security and Finance P. Ltd. v. B.K. Bedi 1991 (71) Comp. Cas 101 (Delhi) wherein, while dealing with Sections 542 and 543 of the Companies Act, the Delhi High Court has explained the significance of the words ‘any person who was knowingly a party to the carrying on the business’ as found in Section 542, held that the conduct of the Ex-Directors cannot be examined under Sections 542 and 543 of the Companies Act unless there is a positive and specific evidence and pleading against the individual Director. The relevant portion of the judgment of the Delhi High Court has been reproduced by the learned Judge of this Court in the above said judgment as follows: “Under Section 542 of the Act, the Courts may declare that any person, who was knowingly a party to the carrying on the business of the company, which was carried on with an intent to defraud its creditors or other persons, or was for fraudulent purpose, is personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company. It must be shown that the business of the company has been carried on with an intent to defraud creditors of the company or any other person or for any fraudulent purpose. Further, that the person who is being made liable was knowingly a party to the carrying on of the business for fraudulent purpose. Under law, the particulars of fraud must be given in the” application so as to afford an opportunity to that person to meet the allegation. Dishonesty is an essential ingredient of fraudulent conduct of business. Hence, the pleadings must be specific with regard to the alleged delinquency of a director. The words ‘any person who was knowingly a party to the carrying on of the business in the manner aforesaid’ are very significant and the intention of the Legislature is very clear in inserting these words. Mere vague and general allegations are not sufficient to meet the requirement of this Section, because the Court has come to the conclusion that the business of the company was carried on with an intention to defraud the creditors and/or for any fraudulent purpose. Mere vague and general allegations are not sufficient to meet the requirement of this Section, because the Court has come to the conclusion that the business of the company was carried on with an intention to defraud the creditors and/or for any fraudulent purpose. Further, that the person against whom the allegations are made was knowingly a party to the carrying on of such business. If the allegations are not specific and details of fraud are not given, then, the Court cannot indulge in a fishing or roving enquiry. Thus, the enquiry, therefore, is to be confided to the purpose with which the business of the company had been carried on and about the persons who were knowingly parties to such carrying on of the business. Under Section 543 of the Act, the Court is vested with jurisdiction to examine the conduct of the past or present director, manager, liquidator or any other officer of the company to find out whether he has misapplied or retained or become liable or accountable for any money or property of the company; or he has been guilty of any misfeasance or breach of trust in relation to the company and, where any such conduct is found attributed to any such person, then, to compel him to repay and restore the money or property, or any part thereof to the company. In other words, under this Section, the Court is to examine the conduct of an individual director or officer and to pass an order against him, if such a person is personally found to be liable for misapplication, etc, of the money or property of the company or, otherwise is guilty of any misfeasance or breach of trust in relation to the company. It is thus clear that, to enable the Court to examine the conduct of an individual director of an act of the nature contemplated by the Section. In the absence of such specific allegations and positive evidence, it is not possible or proper for the Court to indulge in a fishing or roving enquiry so as to compel the individual director to reimburse and/or compensate the company. The principles with regard to the pleadings and proof are well-settled. There cannot be a general and roving enquiry into the conduct of a person sought to be made liable.” 18. The principles with regard to the pleadings and proof are well-settled. There cannot be a general and roving enquiry into the conduct of a person sought to be made liable.” 18. It is further relevant to note that the Punjab and Haryana High court, while dealing with a case where the allegation made against the Director was general in nature, as found in the present case, in Faridabad Rubber Solea P. Ltd. (in liquidation) v. S.I. Chopra 2001 (103) Comp. Cas 975 (P & H), held as follows: “The contention that has been advanced before me on behalf of the official liquidator is that since the respondent who was the managing director of the company did not take any steps on behalf of the company to recover the amounts of Rs. 10,97,872.21 and Rs. 57,146.18 which were due from different parties and allowed the same to become barred by time, his negligence and inaction amounts to misfeasance on his part within the meaning of Section 543 of the Act and he is, therefore, liable to compensate the company for these amounts. I find no merit in this contention. The official liquidator has not alleged any fraud or dishonesty on the part of the directors in not recovering the amounts for the company. As per the statement of account filed by the respondent the aforesaid amounts were due to the company from different parties but the directors including the respondent took no steps to recover the same and recovery of the amounts had become barred by time by the time the liquidator took over. The question that arises is whether the mere fact that a few debts due to the company had been allowed to become barred by time amounts to misfeasance on the part of the directors. The matter is not res integra. A similar matter arose before FALSHAW, J., in Kaithal Grain and Bullion Exchange Ltd. v. Lachhman Das (1954) 56 PLR 486, where the learned judge relying on the observations of JESSEL M.R., in Forest of Dean Coal Mining Co. In. re (1978) 10 Ch.D. 450, held that mere inaction on the part of the directors to recover the amount does not amount to misfeasance within the provisions of the Act. In. re (1978) 10 Ch.D. 450, held that mere inaction on the part of the directors to recover the amount does not amount to misfeasance within the provisions of the Act. The learned judge in that case was dealing with the provisions of Section 235 of the Companies Act, 1913, which are similar to those of Section 543 of the Act. Moreover, in the instant case, the company premises were locked by the State Bank of Patiala on 17. 1982, and the books and the records of the company were inside. The respondent had no access to them. It was in November 1987, that this Court directed the bank to open the lock and hand over the books to the official liquidator. It was at that time that the statement of affairs could be filed by the respondent. During all this period the ex-directors had no access to the books and could not, therefore, initiate action for recovery of amounts due to the company. In these circumstances, I do not consider that any action is called for against the respondent. The petition is, accordingly dismissed with no order as to costs.” 19. Therefore, it is clear that when application under Section 542 and 543 of the Companies Act is made relating to the allegation of fraud or breach of trust or misappropriation, to prove such allegation which is being criminal in nature, it is necessary that there should be mens rea aspect on the part of the Ex-Director either in committing fraud or causing loss to the company under liquidation. Such conduct of fraud or breach of trust must be specifically pleaded and proved and in the absence of such specific pleading and proof, on the facts of present case, it is not possible to accept the contention of the learned Official Liquidator that there has been deliberate conduct on the part of the Ex-Directors of the company under liquidation. 20. In view of the above said reasons, I do not see any substance in the application filed by the Official Liquidator for taking any further action against the respondents, viz., Ex-Directors of the company under liquidation for misfeasance under section 542 and 543 of the Companies Act and therefore, the application stands dismissed. Application dismissed.