TaxTMI 
TaxTMI 
Form in which sections 539 to 544 of Act are to apply to cases where an application is made under section 397 or 398
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....of any books, papers or securities; or (b) makes, or is privy to the making of, any false or fraudulent entry in any register, books of account or document belonging to the company, he shall be punishable with imprisonment for a term which may extend to seven years, and shall also be liable to fine. 540. Penalty for frauds by officers.- If any person, being at the time of the commission of the alleged offence, an officer of a company in respect of which the^ [1][Tribunal] subsequently makes an order under section 397 or 398,- (a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; (b) with intent to defraud creditors of the....
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....accounts as are necessary to exhibit and explain the transactions and financial position of the business of the company, including books containing entries made from day to day in sufficient detail of all cash received and all cash paid; and (b) where the business of the company has involved dealings in goods, statements of the annual stock takings and (except in the case of goods sold by way of ordinary retail trade) of all goods sold and purchased showing the goods and the buyers and sellers thereof in sufficient detail to enable those goods and those buyers and sellers to be identified. 542. Liability for fraudulent conduct of business.- (1) If in the course of the proceedings on an application made to the ....
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.... the expression "assignee" includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest was created, but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made. (3) Where any business of a company is carried on with such intent or for such purpose as is mentioned in sub-section (1), every person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be punishable with imprisonment for a term which may extend to two years, or with....
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.... matter is one for which the person concerned may be criminally liable. 544. Liability under sections 542 and 543 to extend to partners or directors in firm or company.- Where a declaration under section 542 or an order under section 543 is or may be made in respect of a firm or body corporate, the ^[15][Tribunal] shall also have power to make a declaration under section 542 or pass an order under section 543, as the case may be, in respect of any person who is a partner in that firm or a director of that body corporate. ----------------------------------------- Notes:- [1] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f a date yet to be notified. Earlier the quoted....
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....91. [8] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f a date yet to be notified. Earlier the quoted words were substituted for "Court" by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991. [9] Current Penalty under section 542 is Rs. 50,000. [10] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f a date yet to be notified. Earlier the quoted words were substituted for "Court" by the Companies (Amendment) Act, 1988, w.e.f. 31-5-1991. [11] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f a date yet to be notified. Earlier the quoted words were substituted for "Court" by the Companies (Amendment) Act, 1988, w....