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Issues:
- Application under section 454 read with section 468 of the Companies Act, 1956 for non-submission of statement of affairs by respondents. - Requirement of filing statement of affairs by directors and ex-directors. - Timeframe for filing statement of affairs and penalties for default. - Court's power to impose penalties or order imprisonment for non-compliance. - Judicial discretion in excusing default or reducing penalties. Analysis: The judgment pertains to an application under section 454 read with section 468 of the Companies Act, 1956, concerning the non-submission of the statement of affairs by certain respondents in connection with the winding-up of a company. The court noted that directors who were not in office on the date of the appointment of the provisional liquidator are required to file a statement of affairs under section 454(2), while existing directors are obligated to do so without a specific court direction. The court directed an ex-director to file a statement of affairs, emphasizing compliance with all required particulars as per the provisions of the Act. Regarding the timeframe for filing the statement of affairs, the court clarified that the Act mandates submission within 21 days of the relevant date, extendable by the court or official liquidator for up to three months as per section 454(3). Failure to comply attracts penalties under section 454(5), with fines imposed for each day of default until the statement is filed. The court retains discretion to excuse default for reasonable excuses or impose varied penalties based on circumstances. In cases of serious default, the court may even order imprisonment for up to two years. The judgment also addressed arguments on whether the court can direct the filing of a statement of affairs after the three-month period specified in section 454(3). While the court did not express a definitive opinion, it highlighted that even if the penal provisions do not apply post the initial timeframe, the court possesses authority to enforce its orders through alternative means. Ultimately, the court dismissed the application without costs, concluding the analysis of the legal issues surrounding the filing of statements of affairs and the consequences of non-compliance under the Companies Act, 1956.
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