Statement of affairs delay was excused where fire destroyed company records and no negligence by directors was proved.

Directors of a company in liquidation were not punished for delay in filing the statement of affairs under Section 454 of the Companies Act, 1956 because they eventually filed it and supported their explanation with evidence of a fire accident that destroyed movables, computers, books and files. In the absence of any pleading or proof that the fire resulted from their negligence or intention, their inability to answer all queries raised by the Official Liquidator was treated as bona fide, reasonable and genuine. The application for punishment was therefore dismissed.

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Issues: Whether the respondents were liable to be punished for failure to file the statement of affairs of the company in liquidation under Section 454 of the Companies Act, 1956.

Analysis: The respondents, who were directors of the company in liquidation, eventually filed the statement of affairs during the pendency of the proceedings. The record showed that the company's premises had suffered a fire accident and that the movables, computers, books and files were destroyed. In the absence of any pleading or evidence that the fire was caused by the respondents' negligence or intention, the explanation offered for inability to clarify all queries raised by the Official Liquidator was found to be bona fide, reasonable and genuine.

Conclusion: The application for punishment under Section 454 of the Companies Act, 1956 was not made out and was dismissed against the respondents.

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