JUDGMENT 1. - The accused respondents Nos. 1 to 5 are Ex-Directors of M/s Jaipur Spinning and Weaving Mills Ltd. (Company in liquidation). M/S Swadeshi Poly-tex Ltd. Gaziabad, the creditor of the company in liquidation had filed a winding up petition on December 15, 1980, on the ground that the company is unable to pay its debts. This Court on December 2, 1983, had ordered that the company wound up. The Official Liquidator attached to this court was appointed as Official Liquidator of the Company in liquidation. When the order that the Company be wound up was made, respondents Nos. 1 to 5 were Directors of the company in liquidation and the respondent No.6 was an officer of the company. A complaint was filed by the Official Liquidator in this Court under Section 454(5) of the Companies Act, 1956 (for short, the Act) and this Court under its order dated November 22, 1984, in exercise of its powers under Sub-section (5A) of Section 454 of the Act took cognizance of the offence under sub-section (5) of Section 454 of the Act against the accused-respondents. 2. Unless the Court under its discretion otherwise orders, it is statutory requirement under sub-section(1) of Section 454 of the Act that a statement as to the affairs of the company in the prescribed form under rule 127 of the Companies (Court) Rules, 1959 (or short, the Rules) should be submitted to the Official Liquidator. 2. Unless the Court under its discretion otherwise orders, it is statutory requirement under sub-section(1) of Section 454 of the Act that a statement as to the affairs of the company in the prescribed form under rule 127 of the Companies (Court) Rules, 1959 (or short, the Rules) should be submitted to the Official Liquidator. As required under sub-section (1) of Section 454 of the Act, the statement as to the affairs of the company in the aforesaid prescribed form has to be verified by an affidavit and has to contain the particulars, namely (a) the assets of the company, stating separately the cash balance in hand and at the bank, if any, and the negotiable securities, if any held by the company, (b) its debts and liabilities, (c) the names, residence and occupations of its creditors, stating separately the amount of secured and unsecured debts, and in the case of secured debts, particulars of the securities given, whether by the company or an officer thereof, their value and the dates on which they were given, (d) the debts due to the company and the names, residence and occupations of the persons from whom they are due and the amount likely to be realised on account thereof, (e) such further or other information as may be prescribed, or as the Official Liquidator may require. So far as the Directors of the Company on the appointed date, in this the date of winding up order is December 2, 1983, are concerned, as required under sub-section(2) of Section 454, the statement as the affairs of the company should have been submitted and verified by one or more of those Directors as well as by the person who is on the aforesaid date the Manager, Secretary or other Chief Officer of the Company, Besides the aforesaid Directors, Manager etc. are concerned, even the Ex-officers of the company who have taken part at any time within one year of the relevant date, in the information of the company, who are in the employment of the company or have been in the employment of the company within the said year and are in the opinion of the Official Liquidator capable of giving the information required, and the persons who are or have been within the said year officers of or in employment of a company which is or within the said year was an officer of the company to which the statement relates. The statement as to the affairs of the company has to be filed within 21 days from the relevant date and as said earlier in this case the relevant date is December 2, 1983 when the winding up order was made. It can also be filed within such extended time not exceeding three months as the Official Liquidator or the court extends the time to that extent. As required under sub-section(4) of Section 454 of the Act read with rule 129 of the Rules, the expenses in making the statement as to the affairs of the company and the affidavit have to be paid by the Official Liquidator or the provisional Officer Liquidator, as the case may be out of the assets of the company. But the question of payment will only arise if such a payment is demanded and bill of actual expenses is submitted-after or along with the submission of the statement as to affairs of the company. 3. The ingredients of sub-section(5) of Section 454 of the Act are that (i) a default should be made in filing the statement as to the affairs of the company in liquidation, (ii) such default should be made within 21 days of the relevant date which in this case is December 2, 1983 when the winding up order was made or within three months maximum period up to which the Official Liquidator or the Court could have extended the time, (iii) the default as aforesaid in filing the statement as to affairs of the company in form No.57 of the Rules should be made without reasonable excuse. In case the aforesaid ingredients of offence are made out, the accused is punishable with imprisonment for a term which may extend to two years or with fine which may extend to Rs.100/- for every day during which the default continues, or with both the consequence of the default in making the statement as to affairs of the company being penal, the on-us to prove all the ingredients of sub-section(5) of Section 454 of the Act initially is on the prosecution. v. Security and Finance Pvt. Ltd. Official Liquidator V.B.K. Bedi, (1974) 44 Company cases, 499 a Full Bench of the Delhi High Court examined the question and said that a bare reading of sub-section(5) of Section 454 of the Act will show that mere making default in complying with any requirement of section 454 does not constitute an offence and the default should be made without reasonable excuse. Sachar J., as he then was, speaking for the court said that burden of proving that the accused had no reasonable excuse is on the complainant in the first instance. Dealing with the question as to how the initial burden can be said to have been discharged by the prosecution, the court said that : "the official liquidator need only to prove that notice was sent to the concerned director to submit a statement of affairs, that the prescribed time has lapsed and that no extension has been sought for from him or from the court and that the necessary books of the company were available for inspection of the concerned director. These are facts which are conveniently available to the Official liquidator any.:` he shows these facts prima facie he would have proved the director has without reasonable excuse, made the default in complying with the requirement of Section 454. In such a case it would obviously be for concerned director to prove circumstances to justify his conduct and to show that he had a reasonable excuse in making the default." In the case of Official Liquidator v. Smt. K. Indira and others, (1983) 54 Company Cases, 644 Kerala High Court was dealing with a similar question of burden of proof and said that initial burden is on the prosecution to prove that the failure was without reasonable excuse. 4. 4. In my opinion, the initial burden is on the prosecution to prove all the ingredients including the ingredient that failure to make the statement as to affairs of the company was without reasonable excuse. The initial on-us or burden of proof has or has not been discharged by the prosecution will depend on the facts and circumstances of each case. In the case of director, manager, secretary or other Chief Officer, the Statement has to be made and submitted of their own accord, whether or not the Official Liquidator called on them to do so, within 21 days of the relevant date or such extended time allowed as required by sub-section(3) of Section 454 of the Act. If the directors etc. as aforesaid do not make the statement of affairs of the company as aforesaid or even after notice the Official Liquidator takes no steps to demand which he was bound to make them available if he is in possession of the same, then the initial burden can be said to be discharged and it will be for the director etc. to bring the circumstances on record that they had reasonable excuse in making the statement as to affairs of the company. 5. In the instant case there is no dispute that within 21 days as required by sub-section(3) of Section 454 of the Act the statement as to affairs of the company was not filed by the accused respondents Nos. I to 5 as well as by accused-respondent No.6. There is no dispute that no application for extension of time was made at any time by the respondents to make the statement as to affairs of the company either to the Official Liquidator or the Court and no order. for extension of time was passed by the Court. At the later stage of this order, I will deal with the merits of the case, but it can be said in the facts and circumstances of this case that the initial burden to prove all the ingredients that the default in making the statement as to affairs of the company was without reasonable excuse has been discharged by the prosecution. While examining the case on merits, as said earlier, it will be seen whether there is sufficient evidence to rebut the aforesaid ingredient of the offence under section 454(5) of the Act, which as said earlier, stands prima facie discharged. 6. Before I examine the case on merits it will be proper to give summary of evidence which has been produced on record. On behalf of the prosecution the statement of V.Y. Rane, the 'When Official Liquidator has been recorded. Accused respondents Nos. 1 to 5 examined Bhopal Chand Bhandari, Chartered Accountant, as DW.1. Reliance has also been placed on documentary evidence. 7. The then Official Liquidator Shri V.Y. Rane has stated that he had sent notices on December 9, 1983 to all the Ex-directors of the company in liquidation requiring them to file statement as to the affairs of the company as required under Section 454 of the Act and notices were served on the Ex-directors of the company but none of them filed or cared to file statement as to affairs of the company. He also stated that so far as Chunnilal Jaipuria and Banshidhar Somani accused respondents Nos.3 and 4 respectively are concerned, in reply to the aforesaid notices they informed that they have resigned from the office of the director of the company and as such they are not liable to file statement of affairs. He also states that Ganesh Narain Podar, Ex-director of the company in liquidation, also did not either file statement as to affairs of the company as required by him nor he came out with any satisfactory explanation. He states that Laxmi Lal Pitte, accused-respondent No.2 under his letter dated December 21, 1983 informed that he was not in know of the affairs of the company in liquidation and as such he was not in a position to file statement of affairs. He also stated that the stand taken by Chunnilal Jaipuria that he resigned long back does not appear to be correct, as per record. It is also stated by him that Ganesh Narain Podar, Chairman and Director of the Company in liquidation appointed M/s. M.C. Bhandari and Co. to prepare statement as to affairs on their behalf and a communication in that respect was sent by Ganesh Narain Podar to the aforesaid Chartered Accountant on May 5, 1984, but still no statement as to affairs of the company was filed. to prepare statement as to affairs on their behalf and a communication in that respect was sent by Ganesh Narain Podar to the aforesaid Chartered Accountant on May 5, 1984, but still no statement as to affairs of the company was filed. Mr. Rane states that whatever record was made available to him was also made available to the aforesaid Chartered Accountants, but the other relevant record which was not in his possession was not made available to the Chartered Accountant by any of the Directors, but still the statement as to affairs of the company was not prepared and was not submitted. There were four five branches of the company in liquidation at Bombay, Delhi, Surat, Bhatinda. According to Mr. Rane except the record of Delhi Branch, no record was received nor was handed over to him by any of the Directors. Because of the non - availability of record and because of non-co-operation of the Ex-directors of the Company in liquidation, his work as Official Liquidator has been hampered. After taking permission to file the complaint, the complaint was filed by him. 8. Shri Bhopal Chand Bhandari DW 1 states that his firm M/s M.C. Bhandari and Co. was engaged by Ganesh Narain Podar to prepare statement as to affairs of the company. He did not personally go to gather the required information but he deputed qualified chartered accountant, namely Rajiv Modi, Sanjiv Modi and one assistant and they were working under his supervision and were reported to him from time to time the progress of work done by them. Rajiv Modi reported to him about various deficiencies and non-availability of record and said that in the absence of the same the statement as to affairs of the company cannot be prepared. He or somebody from the firm used to inform about it to Shri Podar or even to the Official liquidator. He states that in the absence of Bank account it was not possible to give statement of affairs. He admitted that he never personally visited company in liquidation to see as to what was the state of account books and he as no personal knowledge. It has also been stated by him that he is unable to reply to the question if Mr. G.N. Podar would have made sincere efforts, he could or could not supply the statement of accounts from various banks. It has also been stated by him that he is unable to reply to the question if Mr. G.N. Podar would have made sincere efforts, he could or could not supply the statement of accounts from various banks. He goes to the extent to say that the statement as to affairs of the company cannot be given in piece-meal and it has to be given in the prescribed form and no question of interim statement of affairs of the company arises. It is also his statement that whatever trial balance could be prepared by his firm was forwarded to Shri Podar and the Official Liquidator. Sanjiv Modi DW2 was associated with the firm of Chartered Accountant and along with his brother Rajiv Modi he was deputed to prepare the statement as to affairs of the company in liquidation. According to him, he accompanied his brother to see the office of the said Mill for about a year on different occasions. The condition of record was miserable. Some of the record was moth-eaten destroyed by moth, and was lying in a heap. The entire record for preparation of statement of affairs was not available, some was available but some was not available, and especially, Bank statements and record of branch were not available. They had made attempt to segregate and separate the account books lying heap and only on that basis they could prepare trial balance in best possible manner. This is all the evidence in the case. 9. Section 209 of the Act deals with books of account to be kept by the company and under its sub-section(1) every company shall keep at its registered office proper books of account with respect to (a) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place, (b) all sales and purchases of goods by the company, (C) the assets and liabilities of the company and we are not concerned with the requirements as per sub-section (d) of Section 209 of the Act. The books of accounts have to be kept at its registered office but they may be kept at such other places in India which the Board of Directors may decide. Where a company . The books of accounts have to be kept at its registered office but they may be kept at such other places in India which the Board of Directors may decide. Where a company . is a branch office, whether in or outside India, the company shall be deemed to have complied with the provisions of sub-section(1) if proper books of account relating to the transactions effected at the branch office are kept at that office and proper summarised returns, made up to date at intervals of not more than three months, are sent by the branch office to the company at its registered office or the other place referred to in sub-section(1). Sub-section(3) of Section 209 of the Act provides that for the purposes of sub-section(1) and (2) proper books of accounts shall not be deemed to be kept with respect to the matters specified therein (a) if there are not kept such books as are necessary to give a true and fair view of the state of the affairs of the company or branch office as the case may be and to explain its transactions, and (b) if such books are not kept on accrual basis and according to the double entry system of accounting. The ' books of account and other books and papers shall be open to inspection by any director during business hours. Sub-section(4A) of Section 209 of the Act,provides that the books of account of every company relating to a period of not less than eight years immediately preceding the current year together with the vouchers relevant to any entry in such books of account shall be preserved in good order. Under the proviso in the case of a company incorporated less than eight years before the current year the books of account for the entire period preceding the current year together with the vouchers relevant to any entry in such books of account shall be preserved. Under the proviso in the case of a company incorporated less than eight years before the current year the books of account for the entire period preceding the current year together with the vouchers relevant to any entry in such books of account shall be preserved. Sub-section(5) of Section 209 of the Act is in respect of contravention of the aforesaid provisions for keeping the books of account and under it if any of the persons referred to in sub-section(6) fails to take all reasonable steps to secure compliance by the company with the requirements of this section or has by his own wilful act been the case of any default by the company thereunder he shall in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to Rs.1,000/- or with both. Sub-section(6) refers to not only managing director or manager, but all other officers and other employees and agents etc. also as defined in Section 240(6) excluding bankers, auditors and legal advisers. There can be no dispute that the officers include director by virtue of Section 240 of the Act. Thus, it is the statutory obligation or statutory duty of the Directors to see that the books of account are kept as required under Section 209 of the Act and failure to comply with the aforesaid provisions is punishable under sub-section(5) of Section 209 of the Act. Under Section 291 of the Act subject to the provisions of the Act the Board of Directors of a company shall be entitled to exercise all such powers and to do all such acts and things as the company is authorised to exercise and do. Thus, there can be no dispute that the Board of Directors is responsible for over all conduct and management of the company and can comply with the statutory requirements under the Act and other laws, if any. Thus, there can be no dispute that the Board of Directors is responsible for over all conduct and management of the company and can comply with the statutory requirements under the Act and other laws, if any. Section 538 of the Act deals with offences by the officers of the companies in liquidation and under clause (c) of sub-section(1) of Section 538 if any person does not deliver to the Official Liquidator or as he directs, all such books and papers of the company as are in his custody or under his control and which he is required by law to deliver up, he is punishable with imprisonment for a term which may extend to two years or with fine or with both. The Officers, who as said earlier include Directors of the company are statutorily bound to see that books of account of the company are kept as required under Section 209 of the Act. In the case of default in maintaining the books of account throughout the period of two years immediately preceding the commencement of the winding up or the period between the incorporation of the company and the commencement of the winding up, whichever is shorter, every officer of the company who is in default, unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on, the default was excusable, be punishable under Section 541 (1) of the Act with imprisonment for a term which may extend to one year. Under sub-section(2) of Section 541, for the purposes of sub-section(1) it shall be deemed that proper books of account have not been kept in the case of any company, if there have not been kept(a) such books or accounts as are necessary to exhibit and explain the transactions and financial position of the business of the company, including books containing entries made from day to day in sufficient detail of all cash received and all cash paid, and (b) where the business of the company has involved dealings in goods, statements of the annual stock-takings and (except in the case of goods sold by way of ordinary retail trade) of all goods sold and purchased, showing the goods and the buyers and sellers thereof in sufficient detail to enable those goods and those buyers and sellers to be identified.The purpose and object of all these provisions appear to be obvious that in the absence of keeping account-books as said earlier, the statement of affairs, in case the company goes in liquidation, and the other that the Company be wound up is made, can hardly be prepared and the purpose of preparing the statement of affairs is that the Official Liquidator should be in a position to know what are the assets of the company and what are its liabilities. If the statement of affairs in the prescribed form No. 57 is not filed, by, the Directors or such other officers who are required to file it, it is not possible to continue with the winding up proceedings, to recover debt if any due to the company in liquidation and to decide the claims if any of the creditors and to disperse the amount among creditors, if any. Thus, the statement of affairs of the company is a material and important step towards the winding up of the company after an order of winding up of the company is made, and that is why the provisions as aforesaid have been made and default in filing the statement as to affairs of the company, no doubt without reasonable cause, has been made punishable. Mere default in filing a statement as to affairs of the company, is not alone sufficient under sub-section(5) of section 454 of the Act but it should be without reasonable excuse and as said earlier, it is without reasonable excuse or not will depend on the facts of each case. But in case where there is statutory duty of the directors of the company to keep the account books of the company and if the directors do not keep them, I am of the opinion that they cannot be allowed to say that because the books of account were not maintained, they are not in a position to file statement of affairs of the company as it will mean to take advantage of their own default. In case of State of Bombay v. Bandhan Ram Bhandani and others, (1961) 31 Company cases the court while dealing with a case where the directors of the mill were prosecuted for default in carrying out requirement of sub-section (5) of Section 32 of the Companies Act, 1913 said that they knowingly and wilfully authorised the failure to file the summary of share capital for the year 1953 and they were knowingly and wilfully parties to the failure to lay before the company in general meeting the balance sheet and profit and loss account as at March 31, 1953. The defence of the accused persons was that there was no general meeting of the company held in the year concerned and therefore there was no question for compliance with the aforesaid section. The Magistrate acquitted the accused persons holding that no general meeting of the company had been held in the said year. The High Court of Bombay in an appeal against the said acquittal dismissed the appeal summarily. An argument was advanced before the Supreme Court that there was no default in complying with the requirement of the Section untiled a general meeting is held. The Supreme Court referred to the cases Edmonds v. Foster, (1875) 45 LJMC 41 , and Park v. Lawton, (1911) 1 KB 588 , in which it has been said that a person charged with an offence could not rely on his own default as an answer to the charge and so if the person charged was responsible for not calling the general meeting, he cannot. be heard to say in defence to the charge that the general meeting had not been called. It was further said in the aforesaid cases that the company and its officers were bound to perform the condition precedent, if they could do that in order that they might perform their duty. The Supreme Court said that it is a correct view to be taken. The court said that if the person charged with the failure to carry out the requirement of the section could have called the meeting, he cannot defeat the provisions of the section simply by not calling the meeting wilfully. It will therefore, be clear that if the directors of the company are statutorily bound to perform their duties and if they could perform such duties, they cannot be allowed to raise a defence that because they have not performed their duties under the statute, they cannot be penalised. In other words, a person charged with an offence cannot rely on his own default. 10. A look at the memorandum and Articles of Association of the company in liquidation (for short, the Articles) at this stage is necessary. As said earlier, the Board of Directors of the company under the provisions of the Act is responsible for the management of the company. Article 131 of the Article contains a provision for appointment of whole time director and under it subject to the provisions of the Act, the company shall be entitled from time to time to appoint and/or employ any director of the company as a whole time Director and/or as head of any department of the company and/or in any other capacity and for such period and on such remuneration as may be decided upon and the Board of Directors shall from time to time confer upon such appointee such powers as they may think fit and from time to time to revoke and/or modify the same and to suspend and/or remove such appointee. Under Article 132, the Board of Directors shall be entitled from time to time subject never the less to the provisions of the Act, to delegate any powers exercisable by them to any Director of the Company and from time to time to revoke and/or modify the same. Under Article 132, the Board of Directors shall be entitled from time to time subject never the less to the provisions of the Act, to delegate any powers exercisable by them to any Director of the Company and from time to time to revoke and/or modify the same. Under Article 137, the Directors may from time to time select one of their number to be the Chairman of the Board of Directors and determine the period for which he is to hold office. If at any meeting of the Board of Directors the Chairman is not present at the time appointed for holding the same, the Directors present shall choose one of their number to be Chairman of such meeting. Article 140 contains the provision that the Directors may appoint committee. Accused No.1 Shri G.N. Podar was the Chairman and it can be presumed that he should have been appointed as Chairman of the company under Article 137 of the Articles. A perusal of the above referred to Articles will show that the Board of Directors could have delegated any power exercisable by them including the power to keep the account books and it is not the case of the accused respondents that the powers for keeping the account-books were not delegated as aforesaid. 11. Coming to the merits of the case it may be stated that in the earlier part of this order it has been stated that what are the ingredients of offence under Section 454(5) of the Act and how the burden of proof to prove those ingredients is to be discharged and that initial burden of proof or on us to prove various ingredients is on the prosecution, in this case the Official Liquidator. None of the accused respondents filed statement as to affairs of the company either within 21 days of the order that the company be wound up was made on December 2, 1983, nor any extension was sought which could be allowed up to the period of three months. The statement as to affairs of the company had not been filed even by the time the complaint was filed and has not been filed up to this date. The statement as to affairs of the company had not been filed even by the time the complaint was filed and has not been filed up to this date. There can be no dispute that the offence under sub-section(5) of Section 454 of the Act is continuous offence as held by the Supreme court in the case of Maya Rani v. Commissioner of Income tax, (1986) 157 ITR 330 . It has already been said that the accused respondent No.1 Ganesh Narain Podar was the director and chairman of the Board of Directors. It has come in evidence of Shri V.Y. Rane PW.1 that despite notice the statement as to affairs of the company was not filed by any of the accused respondents. It has already been said that so far as Directors of the company in liquidation are concerned, they were statutorily bound under sub-section(1) of Section 454 of the Act to file statement as to affairs of the company within 21 days or within extended time, if any, which might be extended by the Official Liquidator or the Court up to 3 months and that no such extension was sought. Mr. Rane has stated that there were four branches of the company in liquidation at Bombay, Delhi Surat and Bhatinda and except the record of Delhi Branch, no record was received by him nor was handed over to him by any of the Directors. Because of the non-availability of the record and because of non-co-operation of the Ex directors of the company the work of Official liquidator was hampered. He states that subsequently, he received the record of Delhi Branch. He states that despite his writing to the Chairman/ Directors none of them came to hand over the record to him. Shri Podar is said to have shown his inability to hand over the charge on the ground that he was not in know of the affairs of the company. he also states that when he received the letter dated September 6, 1984, he was not in a position to say whether the record mentioned therein was available in the mill or not. He replied to the said letter to the Chartered Accountant on September 20,1984, and said that the company record has not been handed over to him by the Directors and whatever record the Chartered Accountants' firm' wanted it is in the mill premises. He replied to the said letter to the Chartered Accountant on September 20,1984, and said that the company record has not been handed over to him by the Directors and whatever record the Chartered Accountants' firm' wanted it is in the mill premises. Shri Rane further states that later on he sought the record but it is not the complete record of the accounts. It has also been stated by Shri Rane PW.1 that from the statements recorded of some of the directors by him it was revealed that day to day affairs of the company were looked after by Ganesh Narain and he also recorded the statement of Shri Pitte. Shri Rane states that there is nothing on record that except the statement of some of the directors that day to day affairs are managed and looked after by Shri Podar. 12. It was contended by Mr. Bhandari, counsel for the accused respondents Nos. 1 to 5 that on receipt of notices from the Official Liquidator, Shri G.N. Podar appointed M/s MC Bhandari and Company, a firm of Chartered Accountant to prepare the statement as to affairs of the company as required by the Official Liquidator and all possible efforts were made by the said firm but because the account books were destroyed, it was not possible even for the firm of Chartered Accountant to prepare the statement as to affairs of the company in liquidation. He therefore contends that it cannot be said that the default in submitting the statement as to affairs of the company to the Official Liquidator was without reasonable excuse, rather, excuse is reasonable and none of the accused-respondents committed any offence under Section 454(5) of the Act. Shri Raney, Official Liquidator, had clearly stated that he had made available to the Chartered Ac 1 (1986) 157 ITR 330 constant whatever record was available with him, but still the statement as to the affairs of the -company was not prepared. He has clearly stated that other record was not in his possession. He also states that it is not possible from the record taken in possession by him to prepare the statement as to affairs of the company. He has clearly stated that other record was not in his possession. He also states that it is not possible from the record taken in possession by him to prepare the statement as to affairs of the company. Shri G.N. Podar was examined under Section 313 Cr.P.C. and in answer to question No.3 he stated that he was not in possession of any of the account books of any of the branches and there was no question of furnishing the account to the Official Liquidator. In answer to the question No.5 Shri Podar has stated that because of violent agitation of the labourers and because he was not in possession of the account book, he could not make it available to the Official liquidator. A look at the reply to the complaint filed Shri G.N.Podar will show that it has been stated that it was the compulsion or force of the adverse circumstances which prevented or disabled the accused-respondents from complying with the legislative man date, much as they had wished to do so in deference to law. It has been stated in para 2 of the reply that the books and records of the company in liquidation in the custody of the petitioner-complainant were in the state of shambles and disarray and were of no assistance to the accused-respondents to reconstruct the details required for the statement of affairs. He therefore appointed M/s. M.C. Bhandari and Company, Chartered Accountants, to draw up statement of affairs for and on their behalf in the proforma prescribed under Section 454 of the Act. The Chartered Accountant reported the failure of their assignment for more than one reason, more particularly the record was not available. It has been also stated that in the two years preceding the issue of the winding up order there was an inexorable exodus of professional managers and senior executives of the company in liquidation. The factory of the company in liquidation came to a stand-still from March/April 1982 consequent upon the refusal of the State Bank of India to release funds necessary for the payment of wages to workers and for the purchase of raw material. This led to acts of violence and intimidation to senior executives and Directors of the company. The financial difficulty of the company in liquidation coupled with threats of violence demoralised the executives of the company in liquidation and triggered their exodus. This led to acts of violence and intimidation to senior executives and Directors of the company. The financial difficulty of the company in liquidation coupled with threats of violence demoralised the executives of the company in liquidation and triggered their exodus. The closure of the factory entailed enforced and involuntary unemployment of labour who turned militant and hostile to surcharge a situation. The directors did not venture to have access to t. to factory of the company in liquidation and were shut out completely from the looks and record of the company in liquidation which fell inevitably into disarray and disorganisation. It has also been stated that the books of accounts records and ledgers now resting in the custody of the complainant were either not written at all or written incomplete for the financial year 1981-82 and 1982-83 until the winding up order. it can therefore be said that even before an order that the company be wound up was made on December 2, 1983, the account books were not kept as required under Section 209 of the Act, and if sincere efforts would have been made, in my opinion they could,have been so kept. Mr. Rane states that so far as G.N. Podar is concerned, it was he who looked after the day to day affairs of the company. Even in his statement under Section 313 Cr. P.C. Shri Podar has stated so. The accused respondent No.1 was the Chairman Director of the company in liquidation and as said earlier he was in charge of 'the day to day management of the affairs of the company. He was duty bound under law to maintain the account books and he could have no excuse. If the account books have not been maintained, though they could have been maintained, as aforesaid, the accused cannot take advantage of their own default and it will not be a valid defence to the charge under Section 454 of the Act. It appears from various documents that the firm of Chartered Accountant was appointed and some efforts were made to segregate the account books and balance sheet was also prepared but because the account books of various branches were not available, statement of affairs could not be prepared and submitted to the Official Liquidator. It appears from various documents that the firm of Chartered Accountant was appointed and some efforts were made to segregate the account books and balance sheet was also prepared but because the account books of various branches were not available, statement of affairs could not be prepared and submitted to the Official Liquidator. But in my opinion, this alone was not sufficient as also this happened because the account books were not maintained as required by Section 209 of the Act as has been said in the earlier part of this order. The accused-respondents cannot be allowed to take the advantage of their own fault more so, when they were bound to keep the account books. Even the account books of branches except Delhi branch were not made available to the Official Liquidator. A statement as to affairs of the company is a basic document to enable the Official Liquidator to know as to what are the assets and who are the creditors of the company in liquidation. 13. I am of the opinion that G.N. Podar accused respondent No.1, Chairman Director of the company in liquidation is guilty of the offence under Section 454(5) of the Act. It appears that earlier an application was filed on his behalf that he may be excused under Section 633(1) of the Act from filing the statement as to affairs of the company. The learned Judge under his order dated November 4, 1988 at that stage dismissed the application which was treated as an application on behalf of all the accused respondents but said that if accused persons admit their guilt and adduce evidence in defence to prove that they have acted honestly and reasonably and having regard to all the circumstances of the case, they may be excused. The learned Judge further said that in case the allegations are not admitted, and in this case they are not admitted, the complainant shall be entitled to adduce evidence to prove the guilt of the accused and in defence the accused shall be entitled to adduce evidence to prove that inspite of the fact that they may be liable in respect of negligence and/or default, breach of duty, still they ought fairly to be excused as they have acted honestly and reasonably. The court said that instead of convicting the officer of the company, it may give protection to them under Section 633(1) of the Act. It is, therefore, to be examined whether or not, and if so which of the accused should be excused under Section 633(1) of the Act from submitting the statement as to affairs of the company under sub-section(l) of Section 454 of the Act. So far as Ganesh narain Podar is concerned, I am of the opinion that in the facts and circumstances which have been dealt with at length in the earlier part of this order, it cannot be said that he acted honestly and reasonably in not maintaining the account books as required under Section 209 of the Act. He was in charge of day to day management of the affairs of the company. I am of the opinion that no case for excusing him under Section 633 of the Act from filing the statement of affairs of the company is made out. At best so far as respondents Nos. 2 to 4 are concerned, it appears that two of them had resigned much before the winding up order was made and one Somani was bed-ridden since long. It appears that though generally no distinction can be made in an active or non-active and sleeping and working director of the company and each of them is under obligation to file statement of affairs under Section 454 of the Act, but in the facts and circumstances of this case so far as accused No.2 to 4 are concerned, I am of the opinion that they should be excused under Section 633(1) of the Act from preparing and submitting to the Official Liquidator the statement as to the affairs of the company. The same can be said about respondents No.5 who is son of the respondent No.1 and there is no material that he was in charge of day to day management of affairs of the company. Accused No.6 was in service only for short time and he had left the service much before the winding up order was made. I, therefore, excuse these respondents also from filing statement of affairs of the company. 14. Accused No.6 was in service only for short time and he had left the service much before the winding up order was made. I, therefore, excuse these respondents also from filing statement of affairs of the company. 14. Consequently, I hold accused respondent No.1 Ganesh Narain Podar guilty under Sub-section (5) of Section 454 of the Companies Act, 1956 and so far as other respondents are concerned, though they too are held guilty but they are excused from filing statement of affairs of the company in liquidation under Section 633(1) of the Act. An application for exemption from personal appearance has been filed by learned counsel for accused-respondent No.1 for today. Let he be produced by the learned counsel on July 26, 1991 for hearing on the question of quantum of sentence. he may produce any material which he considers necessary on that aspect of the matter.Accused Directed to be produced for hearing on question of sentence-Application disposed of accordingly. *******