( 1 ) THIS case has been preferred under section 454 (5) of the Companies Act, 1956 (the Act) by the Official Liquidator of M/s. La-Bel Laminates Pvt. Ltd. (in Provisional Liquidation) with the following prayers : "9. In the facts and circumstances stated above, the Complainant being the Official Liquidator prays as under : i) That this Hon'ble High Court be pleased to take cognizance of the default committed under Section 454 (5) of the Companies Act, 1956 and to issue process against the Accused No. 1 and 2 to try and punish them in accordance with the provisions of the law and in view of the facts stated in para 6 of above. ii) That during the trial if any evidence produced by the Accused proving that Shri Dhiraj Chhaganlal Patel is a Director of the Company then Official Liquidator be permitted to implead the said person as Accused No. 3 to this proceedings and process be issue against him. iii) That, the Accused No. 1 and 2 be also directed to submit forthwith the Statement of Affairs to the Complainant as on the date of winding up order dated 29. 11. 2007 with full details as per the proforma prescribed under the Companies (Court) Rules 1959. iv) That, the above accused No. 1 and 2 be directed to attend office of the Official Liquidator for recording statement under rule 130 of the Companies (Court) Rules 1959. v) That, the Complainant's cost and charges incidental to these proceedings may be provided for under section 626 of the Companies Act, 1956. vi) Such other order/orders as this Hon'ble Court may deem fit and proper and in the interest of justice may be passed". ( 2 ) THE complaint is based upon following averments made in paragraph Nos. 4 to 8 which read as under : "4. vi) Such other order/orders as this Hon'ble Court may deem fit and proper and in the interest of justice may be passed". ( 2 ) THE complaint is based upon following averments made in paragraph Nos. 4 to 8 which read as under : "4. That as per the provisions of Section 454 of the Companies Act, 1956, the Ex-directors of the Company were required and legally bound to file with the Official Liquidator as to Statement of Affairs of the said Company within 21 days from the date of winding-up order of such time as may be extended by the Official Liquidator or Hon'ble High Court, not exceeding three months duly completed in all requirements and contents as stipulated in the interior text of the Statement of Affairs so as to serve its statutory purpose of taking effective possession of all assets stated therein. 5. The due notices under Section 454 of the Companies Act, 1956, were issued to Accused No. 1 and 2 on 07. 12. 2007 by Speed Post. The letters sent to Ex-Directors of the Company Shri Ramniklal Chhaganlal Patel and Shri Ashok Kumar Chhaganlal Patel is annexed hereto and marked as Annexure 'b'. In reply to the said notice dtd. 07. 12. 2007 of Official Liquidator the Ex-Director, Shri Ramniklal C. Patel requested the Official Liquidator vide his letter dtd. 17. 12. 2007 for extension of time for submitting the Statement of Affairs. A copy of the said letter dtd. 17. 12. 2007 is annexed herewith and marked as Annexure-C. 6. That representatives of Accused No. 1 Shri Raju R. Ashara and Shri Anish Patel were remained present at the time of handing over possession of Regd. Office/factory of the said company to the Official of the Official Liquidator. The said accused have also failed to comply with requirement of law for recording statement as required under rule 130 of the Companies (Court) Rules, 1959. 7. That, in the circumstances narrated above, it becomes clear that Accused No. 1 and 2 have willfully and deliberately neglected to file the statement of Affairs with the Official Liquidator and they have committed default under section 454 (5) of the Companies Act, 1956, for non filing of the Statement of Affairs. 7. That, in the circumstances narrated above, it becomes clear that Accused No. 1 and 2 have willfully and deliberately neglected to file the statement of Affairs with the Official Liquidator and they have committed default under section 454 (5) of the Companies Act, 1956, for non filing of the Statement of Affairs. In absence thereof the Complainant is in complete dark about the assets, liabilities and records of the said company and winding up proceedings are unnecessarily being delayed and the recovery of the book debts are likely to get time barred. 8. That, the Accused No. 1 and 2 have also failed and neglected to attend the meeting under Rule 130 of the Companies (Court) Rules, 1959". ( 3 ) ACCUSED No. 1 (hereinafter referred to as 'the Accused'), put in appearance through an Advocate and submitted before the Court that though vide letter dated 17. 12. 2007 extension of time for submitting Statement of Affairs had been filed and Accused had also sought inspection of the records of the Company in liquidation, the said application had not been decided nor any inspection provided till the matter was taken up for hearing by the Court on 8. 5. 2008. Accordingly the Official Liquidator was directed by the Court to give inspection of the records of the Company in liquidation to Accused No. 1 and the Official Liquidator was also permitted to deseal the premises for granting inspection. ( 4 ) THEREAFTER, it appears that inspection was given on 6. 6. 2008 in compliance with order made on 8. 5. 2008 but as the inspection was incomplete, Accused sought for one more day to complete the inspection. As the said request was not granted by the Official Liquidator, on 2. 7. 2008 the Court directed the Liquidator to file report in this regard. ( 5 ) IN compliance with order dated 2. 7. 2008 report dated 14. 7. 2008 was tendered by the Official Liquidator and in paragraph Nos. 3 and 4 it was stated : "3. That, the official of Official Liquidator provided the inspection on 06. 06. 2008 to the representative of Ex-Directors Shri Rajubhai R. Ashara, who carried out the inspection of records and prepared the list of Preferential Creditors, Unsecured Creditors, Stock in Trade, Loans and Advances, Sundry Debtors etc. for preparation /filing of Statement of Affairs till 5. That, the official of Official Liquidator provided the inspection on 06. 06. 2008 to the representative of Ex-Directors Shri Rajubhai R. Ashara, who carried out the inspection of records and prepared the list of Preferential Creditors, Unsecured Creditors, Stock in Trade, Loans and Advances, Sundry Debtors etc. for preparation /filing of Statement of Affairs till 5. 00 p. m. However, due to huge records, not properly placed / maintained, the inspection of records could not be completed on the same day. At the time of completion, the representative of Ex-Directors requested for one more day's time as extension for inspection of records. A copy of the minutes dated 06. 06. 2008 is annexed herewith and marked as "annexure-B". 4. Thereafter, the Official Liquidator further issued letters dated 19. 06. 2008 to the Ex-Directors (Accused) to intimate the Official Liquidator as to why inspection of records for one more day is required by them, but till date the Official Liquidator has not received any reply from the Ex-Directors (Accused ). A copy of the letter dated 19. 06. 2008 is annexed herewith and marked as "annexure-C". ( 6 ) THEREUPON vide order dated 10. 11. 2008 the Court issued further direction to the Liquidator to grant inspection again for the purpose of completing the inspection of records. After such inspection was granted, the Statement of Affairs has been filed on 16. 12. 2008. Learned Advocate therefore contended that there was no default within the meaning of provisions of Section 454 of the Act. ( 7 ) ON behalf of the Official Liquidator it was submitted that once the statutory period of 21 days from the relevant date as laid down in sub-sections (3) and (8) of section 454 of the Act read together had expired, a default envisaged by section 454 (5) of the Act was committed by the Accused and the Court was required to take cognizance of an offence and try the same. That in the present case vide order dated 29. 11. 2007 made in Company Petition No. 55 of 2007, the High Court had directed to provisionally wind up the Company and the Official Liquidator was appointed as Provisional Liquidator. Therefore, from the said date, i. e. 29. 11. That in the present case vide order dated 29. 11. 2007 made in Company Petition No. 55 of 2007, the High Court had directed to provisionally wind up the Company and the Official Liquidator was appointed as Provisional Liquidator. Therefore, from the said date, i. e. 29. 11. 2007, the Accused was required to submit Statement of Affairs within a period of 21 days and having failed to do so was liable to be prosecuted and punished. ( 8 ) LEARNED Advocate for the Accused invited attention to communication bearing Ref. No. OL/la-Bel Laminates/2007/14258-14259 dated 7. 12. 2007 (Annexure -B) to submit that vide the said notice dated 7. 12. 2007, the Official Liquidator had called upon the Accused to submit Statement of Affairs as required under section 454 of the Act within a period of 21 days and in the said communication, the period of 21 days was specifically referred to as "within 21 days from the date above". The submission on behalf of the Accused was that the date above could either mean the date of the order which was 29. 11. 2007 or the date of communication which was 7. 12. 2007. The Accused had immediately on receipt of the communication responded vide letter dated 17. 12. 2007. In said letter dated 17. 12. 2007 it is stated : (i) that as all the records are lying in sealed premises in custody of the Official Liquidator it was not possible to submit Statement of Affairs within 21 days from the date of order made by the High Court, and (ii) to extend time limit upto three months for submitting Statement of Affairs. That Official Liquidator did not respond either favourably or by rejecting the request made by the Accused, and therefore, the Accused was not in a position to submit Statement of Affairs, nor seek further remedy. In the circumstances, it was submitted, the Accused was prevented by a reasonable excuse and no default envisaged by section 454 (5) of the Act can be termed to have been committed so as to warrant prosecution and penalty. In the circumstances, it was submitted, the Accused was prevented by a reasonable excuse and no default envisaged by section 454 (5) of the Act can be termed to have been committed so as to warrant prosecution and penalty. Alternatively, it was contended that the Accused had no intention not to comply with requirements of Provisions of section 454 of the Act as could be seen from the subsequent events which formed part of the record by way of various orders made by the High Court granting inspection and resulting in ultimately filing of Statement of Affairs by the Accused on 16. 12. 2008. Therefore, no punishment was required to be meted out. ( 9 ) LEARNED Advocate for the Official Liquidator submitted that even defective Statement of Affairs would be covered by Provisions of sub-section (5) of section 454 of the Act and therefore in the event the Court was of the opinion that no default was committed as to non filing of Statement of Affairs at least the Accused had committed default of not filing proper Statement of Affairs as required by law and thus Accused was required to be punished for such default. 9. 1. It was further submitted on behalf of the Official Liquidator that Rule 130 of the Companies (Court) Rules, 1959, (the Company Court Rules), was also required to be read in conjunction with Provisions of section 454 of the Act and Statement of Affairs could be treated to have been properly filed only after the person filing such Statement of Affairs in response to notice to appear at the personal interview that the Official Liquidator may hold for the purpose of investigating the Affairs of the Company appear and tender explanation. Hence, any non compliance with requirement of Rule 130 of the Companies (Court) Rules would itself entail a default under the Provisions of section 454 (5) of the Act. 9. 2. In this connection, it was submitted that after Statement of Affairs was filed the Official Liquidator was required to scrutinies the same to ascertain whether the affairs of the Company in liquidation had been properly conducted or whether the Directors and/or other persons were liable to be proceeded against for misfeasance, etc. 9. 3. 9. 2. In this connection, it was submitted that after Statement of Affairs was filed the Official Liquidator was required to scrutinies the same to ascertain whether the affairs of the Company in liquidation had been properly conducted or whether the Directors and/or other persons were liable to be proceeded against for misfeasance, etc. 9. 3. One more submission on behalf of the Official Liquidator was in relation to the language used by sub-section (8) of section 454 of the Act defining the relevant date stipulated by sub-section (3) of section 454 of the Act, to submit that Official Liquidator was not duty bound to inform any person, specified in sub-section (2) of section 454 of the Act, to file the Statement of Affairs, because order of winding up was a public document of which the person concerned, who is liable to file Statement of Affairs, is supposed to know and therefore the submission on behalf of the Accused that application for extension of time had been made within 21 days from the date of receipt of communication dated 7. 12. 2007 from the Official Liquidator should not be accepted. 9. 4. Referring to section 454 (5a) of the Act it was submitted that once summons was issued by the Court cognizance of an offence was deemed to have been taken and thereafter only recourse open to the Court was to try the Accused in accordance with the prescribed procedure. That in the present case the Court having already issued Summons had to proceed with the trial and could not pass any order at an interim stage for either dropping the prosecution or exonerating the Accused. ( 10 ) IN rejoinder, learned Advocate for the Accused placed reliance on judgment of this High Court rendered in case of Official Liquidator, Trimurthy Agro-Chemical Ltd. (In Liquidation) Vs. Niranjan Jayantilal Tolia And Others (1984) 56 Company Cases 380, to submit that as held by this Court the burden was on the prosecution to show that, default, if any, was without reasonable excuse and in the present case the Official Liquidator had failed to establish the default of the Accused. Niranjan Jayantilal Tolia And Others (1984) 56 Company Cases 380, to submit that as held by this Court the burden was on the prosecution to show that, default, if any, was without reasonable excuse and in the present case the Official Liquidator had failed to establish the default of the Accused. ( 11 ) IT is in this backdrop of facts that the Court is called upon to decide whether the Accused can be stated to have committed any default envisaged by Provisions of sub-section (5) of Section 454 of the Act, and if yes, whether any cognizance was required to be taken of such an offence in the facts and circumstances of the case. ( 12 ) SECTION 454 of the Act appears in Chapter II which is : WINDING UP BY THE COURT - Sub-heading 'official Liquidators'. If one reads the Provisions which precede section 454, it becomes clear that right from section 448 which deals with appointment of Official Liquidator upto section 463 which talks about Control of Central Government over Liquidators, most of the provisions relate to the powers of appointment, maintenance of books etc. by the Liquidator. It is in this backdrop that section 454 of the Act will have to be read and interpreted. The said section reads as under : "454. by the Liquidator. It is in this backdrop that section 454 of the Act will have to be read and interpreted. The said section reads as under : "454. Statement of affairs to be made to Official Liquidator.- (1) Where the [tribunal] has made a winding up order or appointed the Official Liquidator as provisional liquidator, unless the [tribunal] in its discretion otherwise orders, there shall be made out and submitted to the Official Liquidator a statement as to the affairs of the company in the prescribed form, verified by an affidavit, and containing the following 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, residences 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, residences 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. (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 who is at that date the manager, secretary or other chief officer of the company, or by such of the persons hereinafter in this sub-section mentioned, as the Official Liquidator, subject to the direction of the [tribunal], may require to submit and verify the statement, that is to say, persons - (a) who are or have been officers of the company; (b) who have taken part in the formation of the company at any time within one year before the relevant date; (c) 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; (d) who are or have been within the said year officers of, or in the employment of, a company which is, or within the said year was, an officer of the company to which the statement relates. (3) The statement shall be submitted within twenty-one days from the relevant date, or within such extended time not exceeding three months from that date as the Official Liquidator or the [tribunal] may, for special reasons, appoint. (4) Any person making, or concurring in making, the statement and affidavit required by this section shall be allowed, and shall be paid by the Official Liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the Official Liquidator may consider reasonable, subject to an appeal to the [tribunal]. (5) If any person, without reasonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to [one thousand] rupees for every day during which the default continues, or with both. (5) If any person, without reasonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to [one thousand] rupees for every day during which the default continues, or with both. (5a) The [tribunal] by which the winding up order is made or the provisional liquidator is appointed, may take cognizance of an offence under sub-section (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 (5 of 1898), for the trial of summons cases by magistrates. ] (6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of his section, and to a copy thereof or extract therefrom. (7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of an offence under section 182 of the Indian Penal Code (45 of 1860); and shall, on the application of the Official Liquidator, be punishable accordingly. (8) In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment, and in a case where no such appointment is made, the date of the winding up order". ( 13 ) IN so far as the Scheme of the Provision is concerned, sub-section (1) of Sec. 454 of the Act provides for requirement to prepare and submit to the Official Liquidator a Statement of Affairs of the Company in liquidation in the prescribed form, verified by an Affidavit and containing particulars setout in clauses (a) to (e ). ( 14 ) SUB-SECTION (2) of section 454 of the Act stipulates the person (s) who is liable to submit statement. A plain reading of sub-section (2) makes it clear that the primary onus to submit the statement is on the Directors, who are Directors at the relevant date, and the persons who are either the Manager, Secretary or Chief Officer of the Company at the relevant date. A plain reading of sub-section (2) makes it clear that the primary onus to submit the statement is on the Directors, who are Directors at the relevant date, and the persons who are either the Manager, Secretary or Chief Officer of the Company at the relevant date. The latter part of the sub-section which follows the term "or" indicates that in the alternative, persons mentioned in the sub-section thereafter would be, subject to direction of the Court, required to submit and verify the statement at the discretion of the Official Liquidator. Such persons are specified in clauses (a) to (d) of sub-section (2) of section 454 of the Act. In other words, the first part of the section requires anyone of the specified category of persons like Directors, etc. , to submit the Statement of Affairs whereas persons mentioned in the second part of the Provisions are those who may be called upon to furnish statement provided the Official Liquidator so requires, but this is subject to the condition that a direction in this regard should have been sought for and made by the Court. ( 15 ) IN sub-section (3) of Sec. 454 of the Act it is provided that statement has to be submitted within twenty-one days from the relevant date, or within such extended time not exceeding three months from that date as the Official Liquidator or the Court may, for special reasons stipulate. In this context one may usefully refer to provisions of sub-section (8) of Sec. 454 of the Act at this juncture which defines the expression 'relevant date' to mean in a case where a Provisional Liquidator is appointed, the date of his appointment, and in a case where no such appointment is made, the date of the winding up order. Therefore, this term has to be read as being applicable both for sub-sections (2) and (3) where the same phrase is utilised, viz. 'relevant date,' specifying the persons, as on the relevant date, who are liable to file the statement as laid down in sub-section (2), and also for the purpose of filing the statement within the prescribed period from the relevant date as laid down in sub-section (3 ). The applicability of sub-section (8) cannot therefore be confined only for computing the period specified in sub-section (3) of section 454 of the Act. The applicability of sub-section (8) cannot therefore be confined only for computing the period specified in sub-section (3) of section 454 of the Act. ( 16 ) FOR the present, it is not necessary to refer to and deal with sub-section (4) which relates to a person being paid/allowed to claim all costs and expenses incurred in and about the preparation and making of the statement. ( 17 ) SUB-SECTIONS (5) and (5a) of section 454 of the Act have to be read in conjunction. It is necessary to note that for the purpose of appreciating the import of the said Provisions, there is a fine distinction between the use of the term 'default' appearing in sub-section (5) and 'offence' appearing in sub-section (5a) of section 454 of the Act. Though at first blush, it might appear that both the terms have been used by the legislature as being interchangeable but on a closer scrutiny the same does not stand to reason. ( 18 ) SUB-SECTION (5) of Section 454 of the Act stipulates that any person who makes a default in complying with any of the requirement of the section shall be punishable with the prescribed period of imprisonment or with fine at the stipulated rate or with both, provided such default was without reasonable excuse. Hence on a conjoint reading of the Provisions of sections 454 (1), 454 (2), 454 (3) and 454 (5) it becomes clear that the default envisaged is non filing of the Statement of Affairs either simplicitor, or in compliance with the requirement of sub-section (1) by the person (s) specified in sub-section (2), and beyond the stipulated period set out in sub-section (3 ). However, the crux of the issue is whether such default is without reasonable excuse. The legislature has used the term 'excuse' after the word 'reasonable' and not the term 'cause' and therefore the provisions will have to be understood and read in that context. ( 19 ) AS against that sub-section (5a) of section 454 of the Act empowers the Court which made the winding up order or appointed the Provisional Liquidator to take cognizance of an offence in exercise of discretion upon receiving a complaint of facts constituting such an offence and conducting the trial thereof as per prescribed procedure. ( 19 ) AS against that sub-section (5a) of section 454 of the Act empowers the Court which made the winding up order or appointed the Provisional Liquidator to take cognizance of an offence in exercise of discretion upon receiving a complaint of facts constituting such an offence and conducting the trial thereof as per prescribed procedure. ( 20 ) SUB-SECTIONS (6) and (7) of Sections 454 of the Act relate to a person answering the description of a Creditor or contributory of the Company being entitled to inspect or obtain a copy of the statement submitted as required by earlier part of the provision, upon payment of prescribed fee, and being prosecuted if found to be untruthfully presenting himself as a Creditor or a Contributory. This provision is required to be mentioned and considered only for the limited purpose of dealing with one of the contentions raised on behalf of the Official Liquidator that, it is only the Official Liquidator who is empowered to read/process the Statement of Affairs and act thereupon. Suffice it to state that a plain reading of sub-sections (6) and (7) of section 454 of the Act does not indicate such a position and the said contention is misconceived. ( 21 ) IN relation to the burden of proof and the ingredients of the offence, this Court has in the judgment in case of Official Liquidator, Trimurthy Agro-Chemical Ltd. (In Liquidation) Vs. Niranjan Jayantilal Tolia And Others (supra) stated thus : "in order to bring home the guilt against the accused under sub-s. (5) of s. 454 of the Act, the prosecution must prove that the person required to comply with the requirements of that sub-section has, without reasonable excuse, committed a default in doing so. Therefore, besides the factum of default in submitting the statement of affairs within the prescribed time, the prosecution must also prove that the default is without reasonable excuse. Both the ingredients, namely, absence of reasonable excuse and the factum of default in complying with the requirements of the section within the prescribed time must be established to sustain a conviction under sub-s. (5) of s. 454 of the Act. Mere default in complying with the requirements of sub-s. (1) of s. 454 is not punishable under sub-s. (5) of that section. If such a view is taken, the words, "without reasonable excuse" would be rendered redundant. Mere default in complying with the requirements of sub-s. (1) of s. 454 is not punishable under sub-s. (5) of that section. If such a view is taken, the words, "without reasonable excuse" would be rendered redundant. It is well settled that a penal provision must be strictly construed and if two constructions are reasonably possible, the one favourable to the accused must be adopted. The Court must always see that the person to be penalised comes fairly and squarely within the language of the statute which makes his act an offence. The language of sub-s. (5) of s. 454 clearly states that a person who without reasonable excuse makes a default in complying with any of the requirements of the section shall be liable to punishment thereunder. Therefore, the prosecution must prove (i) that the accused is one of the persons who is statutorily liable to submit a statement of affairs; (ii) that he was called upon to comply with the statutory obligation; (iii) that the circumstances of the case reveal that he could have filed the statement of affairs if he was minded to do so; and (iv) that he did not comply with the requirements of law within the prescribed period, to hold him liable under sub-s. (5) of s. 454 of the Act. The burden of proving both the ingredients constituting an offence under sub-s. (5) of s. 454 of the Act rests on the prosecution. Unless both the requirements are established, a conviction under the said sub-section cannot be sustained. Now, the expression "burden of proof" has two distinct meanings, namely, (i) the burden of finally establishing the case; and (ii) the burden of introducing evidence to discharge the onus. The former, that is, the statutory burden, never shifts and remains fixed on the prosecution throughout while the latter fluctuates during the course of evidence tendered by the contesting parties in court. The latter burden becomes academic once the evidence concludes. The Court is then required to evaluate the evidence as a whole to come to the conclusion whether the prosecution has discharged the former, that is, the statutory burden. If, on the evaluation of evidence, the court comes to the conclusion that both the ingredients of sub-s. (5) of s. 454 of the Act have been established by the prosecution, a conviction can be based on that evidence. If, on the evaluation of evidence, the court comes to the conclusion that both the ingredients of sub-s. (5) of s. 454 of the Act have been established by the prosecution, a conviction can be based on that evidence. In Security and Finance (P.) Ltd. , In re : Official Liquidator, Security and Finance (P.) Ltd. v. B. K. Bedi [1974] 44 Comp. Cas 499, the Full Bench of the Delhi High Court was called upon to answer : "whether in a prosecution under s. 454 (5) of the Companies Act, 1956, the burden of proving that the accused had no reasonable excuse for making the default in respect of which he is being prosecuted lies upon the prosecution?" The Full Bench, after stating the ingredients of the said sub-section, proceeded to observe as under (p. 503) : 'it will be seen that a mere making of default in complying with any of the requirements of s. 454 does not constitute an offence because if that were so, the words 'without reasonable excuse' would be redundant. It is apparent that qualification of a default being without reasonable excuse is a necessary constituent of an offence'. Dealing with the argument that if the burden of proving absence of reasonable excuse is cast on the official liquidator, it will throw an onerous and insuperable burden on the official liquidator, the Full Bench observed at page 506 as under : 'it appears to us that the official liquidator need only 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 by the concerned director. These are facts which are conveniently available to the official liquidator and if he shows these facts prima facie he would have proved that the director has, without reasonable excuse, made the default in complying with the requirements of s. 454. In such a case it would obviously be for the concerned director to prove circumstances to justify his conduct and to show that he had a reasonable excuse in making the default. In such a case it would obviously be for the concerned director to prove circumstances to justify his conduct and to show that he had a reasonable excuse in making the default. ' the last sentence refers to the shifting of onus, once the balance has titled in favour of the prosecution on proof of the primary facts indicated by the court. Once the primary facts are proved by the prosecution, the onus shifts to the defence to show that there was reasonable cause for not complying with the requirements of s. 454 of the Act. If the defence fails to discharge this burden, the primary facts proved by the prosecution would be sufficient to hold that the statutory burden which remains constant has been discharged by the prosecution. The view expressed by the Full Bench of the Delhi High Court in the aforementioned case has been accepted by a Division Bench of the Punjab and Haryana High Court in K. S. Mathura Dass v. State of Punjab [1977] 47 Comp Cas 467 and the Kerala High Court in Official Liquidator v. Smt. K. Indira [1983] 54 Comp Cas 644. These decisions, therefore, support the view that I take and I am in respectful agreement with the view expressed by the Full Bench of the Delhi High Court on the question of burden of proof. " ( 22 ) THEREFORE, in the first instance upon a complaint being presented by the Official Liquidator the Court shall have to ascertain whether any default has been committed. For proving prima facie commission of default the Official Liquidator shall show : (i) the concerned person has knowledge of order of winding up, by notice or otherwise; (ii) the prescribed period has lapsed without compliance by the concerned person; (iii) no extension has been sought for; and, (iv) relevant books of accounts and records are easily available to the concerned person. If the Court comes to the conclusion that a default prima facie appears to have been committed, the other side may be called upon to explain the default. But that is not to say that if the complainant does not even make out a prima facie case the Court is bound to call upon the other side. If the Court comes to the conclusion that a default prima facie appears to have been committed, the other side may be called upon to explain the default. But that is not to say that if the complainant does not even make out a prima facie case the Court is bound to call upon the other side. Merely by issuing a notice, even in form of a Summons (the proceedings being quasi criminal in nature), to the other side, it cannot be termed to be taking cognizance of an offence and therefore the contention in this regard raised on behalf of the Official Liquidator that thereafter the Court can only try the Accused before discharging him does not merit acceptance. If the said submission is accepted, the phrase "without reasonable excuse" would become redundant as already held by this High Court and it is not possible to read the provision by rendering part of the provision as otiose. ( 23 ) IF upon issuance of notice the other side appears and points out prima facie that burden has not been discharged by the liquidator, the Court is then not required to conduct a full fledged trial as contended by learned Advocate for the Official Liquidator. The Official Liquidator shall then have to establish by discharging the burden which rests on him to show that the default is without reasonable excuse. It may be, that in a given case, the necessary bundle of facts constituting reasonable excuse may be within the special knowledge of the person accused of the default, but once such a person appears and points out to such facts the liquidator will be required to establish by pointing out cogent evidence that the said facts would not constitute a reasonable excuse. ( 24 ) IN the facts of the present case, the records reveal, the liquidator himself accepts that upon notice having been issued calling upon two persons to file Statement of Affairs, No. 1 immediately responded and pointed out that the record was initially in custody of State Bank of Saurashtra, Morbi Branch, a Secured Creditor, under order of Debt Recovery Tribunal, Ahmedabad, since 16. 12. 2000, and thereafter in the custody of the Official Liquidator on and from 10. 12. 2007 onwards, the possession having been taken over by the Official Liquidator directly from the Secured Creditor. 12. 2000, and thereafter in the custody of the Official Liquidator on and from 10. 12. 2007 onwards, the possession having been taken over by the Official Liquidator directly from the Secured Creditor. Referring to the fact that Accused No. 1 was aged 67 years with ailing health, a request was made to permit the authorised representatives to enter the premises and inspect the record for the purpose of preparation of the statement. Admittedly said communication dated 17. 12. 2007 was not replied by the Official Liquidator despite the fact that the Official Liquidator refers to provisions of sub-section (3) of section 454 of the Act in paragraph No. 5 of the complaint. ( 25 ) THIS aspect has to be appreciated in light of Rule 128 of the Companies (Court) Rules which reads as under : "128. Extension of time for submitting statement.- (1) Where any person required to submit a statement of affairs under section 454 requires an extension of time for submitting the same, he shall apply in the first instance to the Official Liquidator who may, if he thinks fit, give a written certificate extending the time, which certificate shall be filed with the proceedings. The certificate shall be in Form No. 59. (2) Where the Official Liquidator refuses to grant an extension of time for submitting the statement of affairs the person required to submit the statement may apply to the Judge in Chambers for extension of time on notice to the Official Liquidator. " ( 26 ) A plain reading makes it apparent that a person required to submit a Statement of Affairs under section 454 of the Act may apply in the first instance to the Official Liquidator for extension of time who may grant a certificate in Form No. 59 extending the time. Under sub-rule (2) of Rule 128 of the Companies (Court) Rules, where the Official Liquidator refuses to grant extension of time the person is entitled to apply to the Judge in Chambers for extension of time on notice to the Official Liquidator. Therefore, the Official Liquidator was duty bound to deal with application made by the Accused, either by granting the application for extension or by refusing to grant the extension. In the event of refusal, the Accused would have remedy of approaching the Court for extension. Therefore, the Official Liquidator was duty bound to deal with application made by the Accused, either by granting the application for extension or by refusing to grant the extension. In the event of refusal, the Accused would have remedy of approaching the Court for extension. However, in a case where no action is taken by the Official Liquidator the Accused would be rendered remediless. ( 27 ) IN such an eventuality the law has made it clear, as per settled legal position that the extension is deemed to have been granted upon failure to deal with such an application. In the case of Commissioner of Income Tax Vs. Gordhanbhai Jethabhai (1983) 142 ITR 84 while dealing with almost similar situation under the Income Tax Act, 1961 a Division Bench of this High Court has recorded as under : "the question of delay in filing the return which arises in the context of the assessee's obligation to file a return under s. 139 (1) of the Act Proviso to s. 139 (1) lays down that on an application made in the prescribed manner, the ITO may, in his discretion, extend the date for furnishing the return, and, notwithstanding that the date is so extended, interest shall be chargeable in accordance with the provisions of sub-s. (8 ). Rule 13 of the I. T. Rules, 1962, deals with application for extension of time for filing return of income and it lays down that the application to the ITO under the proviso to sub-s. (1), or the proviso to sub-s. (2), or sub-s. (3) of s. 139, for seeking an extension of the date for furnishing the return of income shall be in Form No. 6. As already pointed out above, applications in Form No. 6 were made on behalf of the assessee for extension of time. It is, however, contended on behalf of the Revenue that the applications which were made on behalf of the assessee were not made in the prescribed manner inasmuch as they were not signed by the person authorised to sign on behalf of the assessee. The ITO, therefore, could have ignored these applications. In other words, according to the Revenue, it was not incumbent upon the ITO to render his decision on the application made on behalf of the assessee. The ITO, therefore, could have ignored these applications. In other words, according to the Revenue, it was not incumbent upon the ITO to render his decision on the application made on behalf of the assessee. As pointed out above, proviso to sub-s. (1) of s. 139 empowers the ITO to extend the date for furnishing the return. It is obvious that there is a corresponding duty on the ITO to render his decision on the application made to him and communicate it to the assessee concerned. He has no doubt discretion whether or not to extend the date, but such discretion has to be exercised judicially and not arbitrarily. In other words, he has to exercise the discretion fairly and reasonably. He, however, cannot refuse to use discretion one way or the other and ignore the application for extension made to him in the prescribed form. If the application is not made properly or it suffers from some defect, it may be open to the ITO to reject the application on that ground, but he cannot simply ignore the application as not maintainable. A statutory duty is enjoined on the ITO to entertain and decide the application for extension of time. He cannot refuse to discharge his duty under the pretext that since the application was not properly made or signed, he can ignore it. If a statute invests a public officer with authority to do an act in a specified set of circumstances, it is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moves in that behalf and circumstances for exercise of authority are shown to exist. We are, therefore, unable to see any force in the Revenue's argument that the ITO could have ignored the applications made on behalf of the assessee. It was incumbent upon the ITO either to grant or reject the applications for valid reasons. " Therefore, on this limited count the complaint lacks substance. The Official Liquidator was thus statutorily bound to deal with the application for extension in a judicial exercise of his discretion. Having failed to do so, no default can be attributed to the Accused. ( 28 ) FURTHERMORE, in the facts of the present case there is one more aspect of the matter. The Official Liquidator was thus statutorily bound to deal with the application for extension in a judicial exercise of his discretion. Having failed to do so, no default can be attributed to the Accused. ( 28 ) FURTHERMORE, in the facts of the present case there is one more aspect of the matter. As noted hereinbefore, the Official Liquidator was categorically informed about non availability of records which were in custody of the Secured Creditor initially and thereafter in custody of the Official Liquidator for which inspection had been sought but liquidator chose not to respond to said request also. It was in this context that when the present proceedings were brought before the Court on 8. 5. 2008, the Court directed the Official Liquidator to grant inspection of the records. But the woes of the Accused did not end and only partial inspection was granted which came to be granted further by second order made by the Court on 10. 11. 2008. The Statement of Affairs has been filed subsequent thereto. ( 29 ) HENCE, in the facts and circumstances of the case, it is not possible to state that any default as such had been committed by the Accused, much less treat the same as an offence to prosecute the Accused, Accused having been prevented by reasonable excuse from filing the Statement of Affairs within the stipulated point of time. ( 30 ) IN this context the contention on behalf of the Official Liquidator that once the period of three months, after expiry of period of twenty-one days, is over, on the basis that extension of three months was granted, the default would commence and would continue till the point of time the Statement of Affairs is filed also cannot be accepted. At the cost of repetition it is required to be stated that if such a view is adopted, it would tantamount to omitting the phrase "without reasonable excuse" from sub-section (5) of section 454 of the Act. Reasonable excuse does not necessarily mean only filing of an extension application and obtaining such extension for the maximum period of three months. The two concepts cannot be mixed up or rolled into one to interpret the provision. This is more so when the consequence of the failure can lead to imprisonment, or fine, or both. Reasonable excuse does not necessarily mean only filing of an extension application and obtaining such extension for the maximum period of three months. The two concepts cannot be mixed up or rolled into one to interpret the provision. This is more so when the consequence of the failure can lead to imprisonment, or fine, or both. The examination as to whether there is reasonable excuse or not, has to be independent of whether the extension was prayed for, granted or refused. To put it differently, the stage for seeking extension is prior to the point of time when Statement of Affairs has to be prepared and filed. Normally, natural human conduct would indicate that it is only the person who wants to comply with law, but is prevented due to circumstances beyond his control, who would seek extension. Incorrigible defaulter is not going to be bothered about seeking extension if he is not intending to file statement. Therefore, a person like in the present case, who intends to file but is prevented because of non availability of records, who seeks extension, cannot be put in the category of a person who, without any reasonable excuse, fails to comply with statutory duty. ( 31 ) IN the course of hearing a contention was raised on the basis of Provisions of sub-section (8) of section 454 of the Act to submit that once an order of winding up is made or a Provisional Liquidator is appointed, the relevant date, referred to in sub-section (3) is known and there was no obligation on the liquidator to issue any notice inviting filing of the statement. This contention does not merit acceptance considering the Provisions of rule 124 of the Companies (Court) Rules, which prescribes the form in which the statement has to be submitted and verified as per sub-section (1) of section 454 of the Act, obliging the Official Liquidator to serve such a notice along with Form (or by referring to the Form) upon any of the persons mentioned in section 454 (2) of the Act. Therefore, the contention that the obligation is absolute on the person concerned cannot be accepted. Therefore, the contention that the obligation is absolute on the person concerned cannot be accepted. The period of limitation stipulated by sub-section (3) of section 454 of the Act has to be computed from the point of time it is shown that the person concerned had the knowledge about the order of winding up or about a Provisional Liquidator being appointed. The statutory duty does not begin to run at any point of time prior to such knowledge being available to the person concerned. Hence attribution of the knowledge to the person concerned will also have to be established by prosecution in a case where a default is alleged to have been committed beyond the prescribed period of limitation. ( 32 ) THE charge on the basis of which the complaint has been filed is that the Accused committed default of not filing the Statement of Affairs. This is the only charge. Hence, even if one may read in sub-section (5) of section 454 of the Act that there is a default as to filing a defective Statement of Affairs, or an incomplete Statement of Affairs, that by itself would not be sufficient to sustain the present proceedings. It is well settled in law that the charge has to be specific and cannot be modified or substituted during the course of proceedings. Again at the cost of repetition it is required to be stated that it is for the prosecution to establish that the default, even of the nature of defective or incomplete Statement of Affairs, is without reasonable excuse. Therefore, the submission made on behalf of Official Liquidator in this regard cannot be accepted. On facts it is necessary to note that admittedly the Statement of Affairs was filed on 16. 12. 2008 while the complaint was filed on 21. 1. 2008. Hence when the complaint was filed, in absence of Statement of Affairs, prosecution could not have made out a charge of defective or incomplete Statement of Affairs. ( 33 ) ONE of the prayers is seeking a direction to the two Accused to attend the Office of the Official Liquidator for recording statement under Rule 130 of the Companies (Court) Rules. ( 33 ) ONE of the prayers is seeking a direction to the two Accused to attend the Office of the Official Liquidator for recording statement under Rule 130 of the Companies (Court) Rules. A plain reading of Rule 130 indicates that the said rule permits the Official Liquidator to hold personal interviews with any of the enumerated persons, mentioned in section 454 (2) of the Act for the purpose of investigating the affairs of the Company and every such person is duty bound to attend before the Official Liquidator at the specified time and place and all information that may be required and answer all such questions as may be put by the Official Liquidator. However, the same is not part and parcel of requirement of Provisions of section 454 of the Act and therefore cannot be clubbed along with proceedings of complaint on the basis of alleged default under section 454 (5) of the Act. Therefore, no direction as prayed for in prayer clause 9 (iv) can be given. ( 34 ) SIMILARLY prayer clause 9 (v) seeking costs and charges incidental to the proceedings under section 626 of the Act also cannot be granted because admittedly the said section would have no role to play in these proceedings. Even otherwise, in the facts of the present case the complainant having failed to establish the default cannot become entitled to any costs. Prayer clause 9 (ii) also is not required to be granted. ( 35 ) IN the result, the burden of proving commission of offence has remained undischarged both in facts and in law and the Accused cannot be proceeded against. The Accused is accordingly discharged from the offence alleged. ( 36 ) CONSIDERING the importance of the issue the Court had invited all the learned Advocates representing the Official Liquidator, though not assigned this matter, to address the Court and has had the benefit of all different views. ( 37 ) THE case is accordingly disposed of with no order as to costs.