339. Liability for fraudulent conduct of business
(1) If in the course of the winding up of a company, it appears that any business
of the company has been carried on with intent to defraud creditors of the company or any
other persons or for any fraudulent purpose, the Tribunal, on the application of the Official
Liquidator, or the Company Liquidator or any creditor or contributory of the company, may,
if it thinks it proper so to do, declare that any person, who is or has been a director, manager,
or officer of the company or any persons who were knowingly parties to the carrying on of
the business in the manner aforesaid shall be personally responsible, without any limitation
of liability, for all or any of the debts or other liabilities of the company as the Tribunal may
direct:
Provided that on the hearing of an application under this sub-section, the Official
Liquidator or the Company Liquidator, as the case may be, may himself give evidence or call
witnesses.
(2) Where the Tribunal makes any such declaration, it may give such further directions
as it thinks proper for the purpose of giving effect to that declaration and, in particular,—
(a) make provision for making the liability of any such person under the declaration
a charge on any debt or obligation due from the company to him, or on any mortgage
or charge or any interest in any mortgage or charge on any assets of the company held
by or vested in him, or any person on his behalf, or any person claiming as assignee
from or through the person liable or any person acting on his behalf;
(b) make such further order as may be necessary for the purpose of enforcing
any charge imposed under this sub-section.
(3) Where any business of a company is carried on with such intent or for such
purpose as is mentioned in sub-section (1), every person who was knowingly a party to the
carrying on of the business in the manner aforesaid, shall be liable for action under
section 447.
(4) This section shall apply, notwithstanding that the person concerned may be
punishable under any other law for the time being in force in respect of the matters on the
ground of which the declaration is to be made.
Explanation.—For the purposes of this section,—
(a) the expression “assignee” includes any person to whom or in whose favour,
by the directions of the person liable, the debt, obligation, mortgage or charge was
created, issued or transferred or the interest was created, but does not include an
assignee for valuable consideration, not including consideration by way of marriage,
given in good faith and without notice of any of the matters on the ground of which the
declaration is made;
(b) the expression “officer” includes any person in accordance with whose
directions or instructions the directors of the company have been accustomed
to act.