Sanjib Banerjee, J. - (1.) A matter of some importance has come up in these misfeasance proceedings: the manner in which such matters are conducted by the official liquidator. There appears to be a general helplessness, some of it may be for genuine reasons and the rest out of sheer habit, with which the official liquidator approaches the company court that questions the credibility of the entire process of liquidation.
(2.) UPON a company being wound up by court, the official liquidator becomes the custodian, under Section 456 of the Companies Act, 1956 (the Act), of the company 's properties. The statute requires the official liquidator to be promptly apprised of the company 's business and assets and there is a duty cast on the officers of the company immediately prior to the winding up order being made (and even other officers) to file statements before the official liquidator and ensure that all of the wound -up company 's assets are placed in his hands. There needs to be a degree of seriousness in course of the liquidation proceedings that is fundamental to the concept of a company. By and large companies set up in this country are limited liability companies. The word ''limited '' that the Act requires a company to append at the end of its name is a warning at large to persons dealing with the company that the liabilities of persons who make up the mind and limbs of the company are limited to the extent of their contribution in the capital of the company, if they have contributed to it at all. The stringency necessary at the end of the company 's run, in the liquidation proceedings, is to ensure that business ventures floated with limited liability by the human agencies are not deliberately run aground and its assets fraudulently dissipated before the company is sent into liquidation. This special feature of a company, of the limited liability of the human agencies behind it, is being increasingly abused for want of adequate measures at the liquidation stage. Companies take money, from depositors, shareholders and banks and financial institutions, not to speak of the sundry creditors for its day -to -day transactions, only for the companies to be sent into liquidation with the fortunes of all such stakeholders almost invariably doomed upon liquidation. Not every business venture may succeed and persons having transactions with companies ought to be aware of that. But most companies going into liquidation are not failed business ventures but have been merely used by the human agencies behind them for their personal aggrandisement before they are sent to the black hole of liquidation for next to nothing to emerge thereafter. The malaise is at the initial stage that ultimately results in half -hearted misfeasance proceedings being instituted, as if by rote. That statements of affairs are not filed in time go unnoticed for months and years before a complaint is made. That assets of the company are not placed in the liquidator 's hands, remains undetected for years. Auditors are appointed to investigate into the affairs of a company prior to its liquidation on scanty material which result in the stereotyped misfeasance petition being challenged for not meeting the tests that the official liquidator is required to discharge before an errant officer of the company is held guilty.
(3.) THE company court can address only such of the matters that are brought before it by the official liquidator; the statute enjoins a duty on the official liquidator to be more vigilant that what has come to pass and the executive is required to provide much better administrative support for the official liquidator to carry out his functions in accordance with law. The result of the lackadaisical functioning is that public funds made available by banks and financial institutions remain unrealised, small shareholders lose their entire investment and unsecured creditors hardly find it worth their while to pursue their claims against a company in liquidation. The scheme of the Act is, however, quite otherwise. For, though it does not make the officer of every company liable for the company 's unpaid dues or does not require the conduct of every officer of a wound -up company to be viewed with suspicion, it envisages a due process to be followed by the official liquidator for the recalcitrant erstwhile officers of a company in liquidation to be brought to book.;