Directors' duty to prepare statutory accounts: temporary record seizure did not excuse non filing, convictions upheld.

Directors bear the primary duty to prepare and file statutory balance-sheets and cannot rely on temporary seizure of company papers if they had reasonable opportunities to inspect seized records; the court found that annual meetings were held and returns filed, and audit difficulties arose only after the directors' duty to prepare accounts, so relief under the statutory excuse provision was unavailable and convictions were sustained. Separately, criminal liability for failure to place and file accounts was upheld because factual findings showed directors failed to take required steps despite access to records, justifying fines and dismissal of revision petitions.

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Issues: (i) Whether the company and its directors are entitled to relief under section 633 of the Companies Act for non-preparation/non-filing of balance-sheet and profit and loss account where company papers were seized by police; (ii) Whether directors can be held criminally liable under sections 220(3) and 210(5) of the Companies Act for failure to file and place the balance-sheet where they had opportunities to inspect seized documents.

Issue (i): Whether relief under section 633 of the Companies Act is available to the company and its directors on account of seizure of company papers by police.

Analysis: The seizure of company papers occurred in June-July 1957. Evidence and findings indicate officers of the company had multiple opportunities to inspect and examine the seized books and papers. Annual general meetings were held and annual returns were filed during the relevant years. The factual record shows no continuing impossibility preventing preparation of the balance-sheet; difficulties related to audit arose only after directors' duty to prepare the balance-sheet.

Conclusion: Relief under section 633 is not available to the company or its directors.

Issue (ii): Whether the directors are criminally liable under sections 220(3) and 210(5) of the Companies Act for failing to file and place the balance-sheet given the circumstances.

Analysis: The preliminary duty to prepare the balance-sheet rests on the directors. The record shows directors did not take required steps to prepare the balance-sheet despite ample opportunities to inspect seized records. The availability of inspection and the holding of annual meetings and filing of annual returns negate the claim of physical impossibility. The factual findings justify upholding convictions and fines imposed by the magistrate for failure to place and file statutory accounts.

Conclusion: Directors are liable; the convictions and fines under sections 220(3) and 210(5) are upheld.

Final Conclusion: The revision petitions challenging the magistrate's convictions are dismissed and the magistrate's orders stand.

Ratio Decidendi: Where directors have the primary duty to prepare statutory accounts and have been given reasonable opportunities to inspect necessary records, claims of impossibility due to temporary seizure of documents do not absolve them from liability under the Companies Act; audit difficulties do not excuse failure of directors to prepare the balance-sheet.

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