Case Law Analysis
|Karnataka High Court
Section 543 Companies Act | Technological Obsolescence Does Not Constitute Misfeasance; Liability Limited to Unaccounted Loans with Interest from Winding-Up Date : Karnataka HC
The Karnataka High Court has ruled that mere book-value discrepancies arising from technological obsolescence cannot ground a claim of misfeasance against directors under Section 543 of the Companies Act, 1956. Liability is confined solely to unaccounted loans of Rs.24,022 with 6% interest from the winding-up date, clarifying that accounting adjustments alone do not equate to misconduct by directors in liquidation proceedings.