Section 217(4) provides that the Board’s Report and any addendum thereto should be signed by the Chairman of the Board if he is authorized in that behalf by the Board and, where he is not so authorized, by not less than two directors of the company, one of whom shall be a managing director, where there is one.
The Board’s Report may bear the same dates as that of the auditor’s report but it could be dated later than the date of auditors’ report if, in the case of any reservation, qualification or adverse remark contained in the auditors’ report, the Board has responded with its comments and given full information and explanations in its report.
Default by a director, or by any other person who has been charged by the Board with the duty of seeing that the provisions of this section are complied with and fails to take all reasonable steps to comply with the provisions of the section or if a chairman signs the Board’s report without being authorised so to do will render himself liable for each offence to be punishable with imprisonment upto 6 months or with fine upto Rs. 20,000 or with both. The punishment of imprisonment can be ordered only if the offence was committed wilfully.
In T.P.G Nambiar v. ROC (1998) 92 Comp. Cas. 564 (Kar), it was held that just because statement under Section 217 furnished to Registrar of Companies was not properly numbered or it was in a blue sheet etc., that by itself could not be an offence to proceed against directors.
Besides, in any proceedings against a person in respect of an offence under Sub-section (1) of Section 217, it shall be a defence to prove that a competent and reliable person was charged with the duty of seeing that the provisions of that sub-section were complied with and that person was in a position to discharge that duty.
