Nominee Director Liability under company law requires proof of no reasonable excuse and responsibility for compliance.

Liability under section 454(5) of the Companies Act, 1956 arises only where failure to file the statement of affairs is shown to be without reasonable excuse. On the record, there was no material proving that the nominee director was involved in the company's day-to-day affairs or that he held the books, accounts, records, or other information needed for compliance. His assertion that he was not concerned with management was not rebutted. In the absence of such material, criminal liability could not be fastened and the finding of guilt could not be sustained.

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Issues: Whether the appellant, being a nominee director, could be held guilty under section 454(5) of the Companies Act, 1956 for failure to file the statement of affairs, despite asserting that he was not concerned with the company's day-to-day affairs and had reasonable excuse.

Analysis: Liability under section 454(5) arises only where failure to comply is without reasonable excuse. The record did not show that the appellant was involved in the day-to-day affairs of the company or that he was in possession of the company's books, accounts, records, or other information necessary for compliance. The materials also did not rebut his specific assertion that, as a nominee director, he was not so concerned. In these circumstances, the basis for fastening criminal liability was not established.

Conclusion: The finding of guilt under section 454(5) of the Companies Act, 1956 could not be sustained and the appellant was entitled to relief.

Ratio Decidendi: A person cannot be held guilty under section 454(5) of the Companies Act, 1956 unless failure to file the statement of affairs is shown to be without reasonable excuse, and such liability cannot be imposed in the absence of material showing responsibility for the company's affairs or possession of relevant records.

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