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 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;
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.
Legal Commentary & Landmark Judgments: Section 337
Section 337 of the Act establishes severe criminal penalties for frauds committed by officers of companies that have gone into liquidation, penalizing fraudulent property concealment, false documentation, and unlawful asset transfers within the twelve-month lookback period prior to winding up.
Official Liquidators and Resolution Professionals must review bank transactions and asset transfers executed within twelve months prior to the insolvency petition; file a criminal report under Section 337 alongside avoidance applications.