Court rules in favor of petitioner on maintaining books of account under Companies Act

The petition was allowed in favor of the petitioner, who argued against the obligation to maintain books of account beyond eight financial years under Section 128(5) of the Companies Act. The court held that without a specific direction from the Central Government, the respondent could not compel the petitioner to provide records for the specified years. The respondent was permitted to proceed with lawful actions in the ongoing investigation, with the petitioner's cooperation required. The petition was disposed of, resolving any pending applications promptly.

---

---

Issues involved: Interpretation of Section 128(5) of the Companies Act regarding maintenance of books of account beyond eight financial years

Summary:
The petitioner, represented by counsel, argued that they are not obligated to keep records of books of account for the financial years 2010-11 and 2011-12 as per Section 128(5) of the Companies Act. The definition of "books of account" under Section 2(13) of the Companies Act was highlighted, encompassing various financial records. The petitioner contended that the documents requested by the respondent fell within this definition. Reference was made to legal precedents such as Standard Chartered Bank vs Directorate of Enforcement and Union Of India vs Citi Bank, supporting the petitioner's position that they cannot be compelled to provide records beyond eight years.

The Special Public Prosecutor for the CBI argued that they had the authority under the proviso to Section 128(5) to request books of account for periods preceding the eight-year limit. However, it was noted that this provision required a specific direction from the Central Government, which was absent in this case. Consequently, the petition was allowed on the grounds that the petitioner did not possess books of account for the specified years. The respondent was permitted to take further lawful action as the investigation continued, with the petitioner's cooperation mandated.

In conclusion, the petition was disposed of with the petitioner prevailing on the issue of maintaining books of account beyond eight years. Any pending applications were also resolved, and the order was directed to be issued promptly.

---