Section 337: Penalty for frauds by officers

Companies Act, 2013 · Chapter XX: Winding Up · In force

This section is for punishing company officers who commit frauds that harm the company or its creditors.

Penalty

(c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company or within two months before that date, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees.

The section, clause by clause

What the section says

In plain terms

If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the Tribunal 1[under this Act]—

(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 company or any other person, has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the property of the company; or

(c)with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since the date of any unsatisfied judgment or order for payment of money obtained against the company or within two months before that date, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to three lakh rupees.

The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.

Amendment notes

1. Subs. by Act 31 of 2016, s. 255 and the Eleventh Schedule, for “or which subsequently passes a resolution for voluntary winding up,” (w.e.f. 15-11-2016).

Referred to by

s. 246 Application of certain provisions to proceedings under section 241 or section 245

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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.