TaxTMI 
TaxTMI 
1977 (2) TMI 86
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....otices to the accused on November 19, 1971, and December 31, 1971, to submit the statement of the affairs of the company as required under sub-sections (2) and (3) of Section 454 of the Companies Act, 1956 (hereinafter referred to as the Act), within 20 days. The appellant, who is the managing director of that company, intimated the official liquidator that he had taken the records of the company to Patiala in connection with the income-tax matter but lost those on his way back to Jullundur. It was further intimated that the company had no property, cash or bank balance. As the appellant in his capacity as a managing director and the other accused (now acquitted), being officers of the company failed to furnish the required information wit....
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....at the appellant filed an affidavit in the court on 19th of May, 1972, and after that his statement was recorded by the learned single judge on 15th of September, 1972, and these amount to the admission of guilt. Both the counsel have very heavily relied on this affidavit and the statement of the appellant recorded by the learned single judge in the question and answer form to argue that after this there was no necessity for the official liquidator to lead evidence. Sub-sections (2), (3), (5) and (5A) of section 454 of the Act, which are relevant for the decision of the point in issue, are as under: "(2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person....
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....appointed, may take cognizance of an offence under subsection (5) upon receiving a complaint of facts constituting such an offence and trying the offence itself in accordance with the procedure laid down in the Code of Criminal Procedure, 1898, for the trial of summons cases by magistrates". The argument of the learned counsel for the State and the official liquidator is that the words "without reasonable excuse" as used in subsection (5) of section 454 of the Act show that it is for the accused to show the reasonable excuse. The burden of proof for this, according to them, is not on the prosecution. The argument lacks any basis. This is not provided by way of exception in the statute and the court cannot presume the circumstances of the a....
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....er, if a director pleads any exception to bring his case within the proviso the burden to prove that would be on him". We are in respectful agreement with the observations of the Delhi High Court in In re Security and Finance P. Ltd's. case [1974] 44 Comp Cas 499 (Delhi) [FB]. The prosecution cannot escape the responsibility by simply arguing that the onus is on the accused. It has to lead some evidence before it can say that the onus is to shift to the accused. The Full Bench of the Delhi High Court in In re Security & Finance P. Ltd's. case [1974] 44 Comp. Cas. 499 , 513 (Delhi) [FB] in the last paragraph of the judgment made very pertinent observations as under: "As a result we hold that in a prosecution under section 454(5) and (5A) ....