Prima facie participation in company affairs justified continuation of proceedings for failure to file the statement of affairs.

Admitted signing of company documents can furnish prima facie material to proceed against a person for default in filing the statement of affairs under the Companies Act, 1956. The Delhi HC held that the appellant's claim that she was only a housewife and had signed papers without knowledge was a matter for trial, not a ground to stop proceedings at the threshold. Because the record also showed continuing failure to file the statement of affairs, the material was sufficient to justify continuation of proceedings against her.

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Issues: Whether there was prima facie material to proceed against the appellant for failure to file the statement of affairs under Section 454(5) of the Companies Act, 1956.

Analysis: The appellant had admittedly signed company documents, which furnished prima facie support for the view that she was participating in the affairs of the company. The defence that she was only a housewife and had signed papers without knowledge was a matter for trial. In the circumstances, and having regard to the continuing failure to file the statement of affairs, the material on record was sufficient to justify proceedings against her.

Conclusion: The issue was decided against the appellant and in favour of the respondent; the order directing proceedings to continue was sustained.

Ratio Decidendi: Where admitted signing of company documents furnishes prima facie evidence of participation in the company's affairs, proceedings for default in filing the statement of affairs may properly continue, leaving the defence to be tested at trial.

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