Allotment of shares

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Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2013 IF IN A PRIVATE COMPANY, FORM 2 HAS BEEN FILED WITHOUT ACTUAL RECEIVING THE MONEY. WHAT IS THE REMEDY AND PENAL PROVISION..

Ajay Mishra

Ajay Mishra (Expert)

03 July 2013 The Board of Director and company will face penal provision.

Section 628 provides that if in any return, report, certificate, balance-sheet, prospectus, statement or other document required by or for the purposes of any of the provisions of this Act, any person makes a statement:—
(a) which is false in any material particular, knowing it to be false; or
(b) which omits any material fact knowing it to be material;
he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine.
Where wrong information was furnished by company to office of Registrar, only person, who gave wrong information, was liable to be prosecuted under section 628 and prosecution of other directors or managing director would be illegal. [Vijay Kumar Gupta v Registrar of Companies (2003) CLC 777 (HP)].
Offence if any committed by the agent cannot be passed on to the principal because such vicarious liability under criminal law does not arise between the agent and principal. [Ramakrishna Raja v Registrar of Companies (2005) 123 Comp Cas 319 (Mad)].

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Thanks for your prompt reply.

In my client's Company. The allotment was done a year ago for a larger amount. But the money was not recieved.
Now as such it is not possible to recover larger amount..and the case happened in the year 2012-2013 and nw the balance sheet is required to be final..what is the remedy..

Is there any option of compounding or the company should remain silent??

Kindly provide a suitable solution which would help me in advising him..

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