Amended and updated notes on section 342 of Companies Act 2013. Detail discussion on provisions and rules related to prosecution of delinquent officers and members of company.
Chapter XX (Section 270–365) of the Companies Act, 2013 (CA 2013) deals with the provisions related to winding up. Section 342 of CA 2013 provides for prosecution of delinquent officers and members of company.
Recently, we have discussed in detail section 341 (Liability under sections 339 and 340 to extend to partners or directors in firms or companies) of CA 2013. Today, we learn the provisions of section 342 of the Companies Act 2013.
The provisions of section 342 are effective from 15th December, 2016. You may refer Notification No. S.O. 3677(E) issued dated 7-12-2016. In this article, you will learn detail of the provisions of section 342 the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XX |
| Chapter Name | Winding Up |
| Section No. | 342 |
| Section Name | Prosecution of delinquent officers and members of company |
| Monthly Updated Edition | Company Law PDF |
Section 342 of Companies Act 2013: Prosecution of delinquent officers and members of company
Section 342 shall come into force on 15th December, 2016 vide Notification No. S.O. 3677(E) dated 07.12.2016.
(1) If it appears to the Tribunal in the course of a winding up by the Tribunal, that any person, who is or has been an officer, or any member, of the company has been guilty of any offence in relation to the company, the Tribunal may, either on the application of any person interested in the winding up or suo motu, direct the liquidator to prosecute the offender or to refer the matter to the Registrar.
(2) – (4) [Omitted w.e.f. 15-11-2016]
(5) When any prosecution is instituted under this section, it shall be the duty of the liquidator and of every person, who is or has been an officer and agent of the company to give all assistance in connection with the prosecution which he is reasonably able to give.
Explanation: For the purposes of this sub-section, the expression “agent”, in relation to a company, shall include any banker or legal adviser of the company and any person employed by the company as auditor.
(6) If a person fails or neglects to give assistance required by sub-section (5), he shall be liable to pay fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.