• Criminal action against the Directors of Company

1.	A Private company was incorporated under RoC, Shillong, Meghalaya, in the year 10-02-1984 with an authorized capital of Rs.10, 00,000/-under companies act 1956.The Company did not filed any statutory documents such as balance sheet, annual report etc from the date of incorporation till the year 1995.However the company filed only balance sheet at 31.03.1996 on 08.07.1996 while submitting application for strike off. The company filed an application & affidavit for struck off citing reasons that it is not doing business since incorporation nor will do any business in future. The RoC issued struck off order on 17.02.1997, without imposing any penalty.
2.	There is a multistory commercial building whose value will run into several crore near the main road which has clearly violating building by-laws and causing difficulty to commuters under Guwahati Municipal Corporation. When I approached Guwahati Municipal Corporation for demolition of the building for by law violation in the year 2014 it has emerged that the construction permission was obtained in the name of above Company in the year 1984. Guwahati Municipal Corporation is initiating action against the owner of the building since January 2015 for by-law violation. In the meantime I approached RoC, Shillong, Meghalaya by filing RTI to obtain information about the Company. They have supplied all the documents.
3.	The documents reveal that the Directors of the Company filed a fraud affidavit to strike off the company. There it was stated that the company is not doing business since incorporation nor will do any business in future, whereas it owns a multistory commercial building since 1984 whose value will run into several crore and several lakhs of rupees is collected as monthly rents from various business entities operating from that building. It might have other assets which I don't know. I have filed a complaint to RoC, Shillong, Meghalaya for taking appropriate action against the Directors of the Company, but in its reply they said that RoC cannot take any action as the company is struck off. RoC has advised me to approach court of Law.
4. Issues: Please advise me what legal action can be taken against the Directors of the Company at present under the above facts and circumstances for filing a false affidavit to strike off a company and other related issues as mentioned above. It is also to mention that I don’t have any direct dealing with the company but I am interested to take action against it.
Asked 2 years ago in Business Law from Guwahati, Assam
1) section 229 of companies act  provided that in case person knowingly furnishes false information he can be punished for fraud under section 447 of companies act 

2) Section 447 of the Companies Act, 2013 often now referred as one of the draconian section of the new Act deals with provision relating to punishment for fraud. It reads as : “Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than 6 months but which may extend to 10 years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to 3 times the amount involved in the fraud:

Where the fraud in question involves public interest, the term of imprisonment shall not be less than 3 years”.

3) you can lodge complaint against the company in magistrate court under section 229 read with 44 7 of companies act
Ajay Sethi
Advocate, Mumbai
23302 Answers
1220 Consultations
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229. Penalty for furnishing false statement, mutilation, destruction of documents
Where a person who is required to provide an explanation or make a statement
during the course of inspection, inquiry or investigation, or an officer or other employee of
a company or other body corporate which is also under investigation,—
(a) destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly
removes, or is a party to the destruction, mutilation or falsification or concealment or
tampering or unauthorised removal of, documents relating to the property, assets or
affairs of the company or the body corporate;
(b) makes, or is a party to the making of, a false entry in any document concerning
the company or body corporate; or
(c) provides an explanation which is false or which he knows to be false,
he shall be punishable for fraud in the manner as provided in section 447.

447. Punishment for fraud
Without prejudice to any liability including repayment of any debt under this Act
or any other law for the time being in force, any person who is found to be guilty of fraud,
shall be punishable with imprisonment for a term which shall not be less than six months but
which may extend to ten years and shall also be liable to fine which shall not be less than the
amount involved in the fraud, but which may extend to three times the amount involved in
the fraud:
Provided that where the fraud in question involves public interest, the term of
imprisonment shall not be less than three years.
Explanation.—For the purposes of this section—
(i) “fraud” in relation to affairs of a company or any body corporate, includes
any act, omission, concealment of any fact or abuse of position committed by any
person or any other person with the connivance in any manner, with intent to deceive,
to gain undue advantage from, or to injure the interests of, the company or its
shareholders or its creditors or any other person, whether or not there is any wrongful
gain or wrongful loss;
(ii) “wrongful gain” means the gain by unlawful means of property to which the
person gaining is not legally entitled;
(iii) “wrongful loss” means the loss by unlawful means of property to which the
person losing is legally entitled.

you can read the companies act 2013 on below mention link
http://www.mca.gov.in/MCASearch/search_table.html
Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
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Hi,
1. You should take legal action against the parties who erred.As per the amendment 2013, the punishment is harder and the sec. 229 and 447  ensures the punishment apart from under sec. u/s. 415 to 424 of the Indian Penal Code. Section 447 of the Companies Act, 2013 prescribes a separate punishment for fraud, in relation to affairs of any company which is, imprisonment for a term which shall not be less than six months but which may extend to 10 years and shall also be liable to fine which shall not be less than the amount involved in the fraud but which may extend to three times the amount involved in fraud.
2.that it is very clear from the reading of the sections, any act or omission, concealment of any fact or abuse of position committed by any person with intent to deceive, to gain undue advantage from or injure the interest of any company or its shareholders or its creditors or any other person, is guilty of fraud. Various provisions of the Companies Act, 2013, there are given a list out different acts, omissions or other conduct which shall amount to fraud punishable u/s. 447 of the Act  and  U/s. 212(6) all the above offences are cognisable offences and no person accused of any offence under above sections can be released on bail without giving opportunity to be heard to the Public Prosecutor.

The Central Government can assign investigation into affairs of any company to SFIO and if there is any offence under investigation by SFIO no other investigation authority including the State Police, can continue or commence investigation under the Companies Act, 2013. Under the provision of the new law the SFIO has been given a statutory status and powers of investigation under the Code of Criminal Procedure, 1973 have been vested in SFIO. S/s. (17) of section 212 makes a specific provision for sharing of any information or documents available with any other investigating authority or income-tax authorities with SFIO and likewise SFIO can share information or documents available with it with any other investigating authority or income-tax authorities.
in this case sec.415 under Ipc for cheating can be also charged
The fraud can be tried under criminal procedure as well as under Indian contract act 1872 for civil remedy.
The Companies Act 2013, provides for establishment of Special Courts to try the offences under the Act and pending such establishment the offences are to be tried by a Court of Session exercising jurisdiction over the area (section 440 of the Companies Act, 2013).
engage an advocate who handles this matters who is well versed in criminal law practicing and proceed.
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
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1. Owning multistoried building does not amount in doing business,

2. What business the said Pvt. Ltd. Company  had peoposed to do?

3. However, if you get evidence that there is a false statement made by tye directors and fraud committed by them, then you can certainly file a complaint case against the said Company,

4. It is not understood why are you not pursuing the demolision effort and are acting against the directors of the Company.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
232 Consultations
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1. How can owning a multi storey building be equated with doing business? Is this alone what you are claiming to be the "false information" furnished by the company in its affidavit? If yes, your complaint will not survive in the court. 

2. For any other false statement made in the affidavit, supported by documentary proof of unimpeachable character, you may file a complaint against the company. 

3. The issue of demolition of the building for flouting building bye-laws by the company is discernible from furnishing of false information by it. You may move the High Court for action against the company in accordance with the law for violating the bye laws.
Ashish Davessar
Advocate, Jaipur
18167 Answers
449 Consultations
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