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Companies Act, 1956 Section 540

Title: Penalty for Frauds by Officers

State: Central

Year: 1956

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 the1[Tribunal] or which subsequently passes a resolution for voluntary winding up, - (a) has, by false pretences or by means of any other fraud, induced any person to give credit to the company; or (b) with intent to defraud creditors of the company, 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 may extend to two years and shall also be liable to fine. _____________________ 1. Substituted by Act 11 of 2003, Section 99, for "Court".

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