Going After the Director of A Liquidated Company

Very often we heard of Companies wound up and the suppliers or creditors were left with no recourse in the recovery of thier payments owed by the wound up Companies.
At hand is a High Court case where the creditor files a claim against the director of the wound up Company. The Court held that the creditor has the right to do so. There is a provision in the Company Act Section 304(1) which says that if there appears to be fraudulent intent in the minds of the directors of the wound up Company 'any creditor', which means any person or corporate body can still file a suit against the director of the Company for recovery of money due to them. Thus businessmen who thought they can simply escape liability by liquidating their businesses do think twice.
It is the the usual practice for whoever claiming agianst a wound up Company to to file a proof of debt waiting in the queue to be paid ,usually a futile effort with practically no hope of getting anything back.

In the present cast the liduidated Company(voluntary liquidation) failed to call for a meeting of creditors as required under section 260 of the Company Act 1965. If they have done so in my humble opinion they will still have to face the suit since the Plaintiff (creditor) is filing the suit on the ground of fraud.

This is a High case,in our system the lower Court has to abind by the decision of the higher Courts. The decision is subject to appeal. However it is enough for us to be aware of the fact that even though a Company may go down, the creditors are still able to pursue their claims if fraudulent dealings are proven.