Swayam and Shubham are two directors of Shuyam Medical Consultancy Private Ltd., Hyderabad. Swayam was authorized by Board of directors to prepare and file returns, reports and other related information and documents to

According to section 448 of the Companies Act, 2013 (the Act), save as otherwise provided in this Act, if in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement, - (a) which is false in any material particulars, knowing it to be false; or (b) which omits any material fact, knowing it to be material, he shall be liable under section 447. Section 447 of the Act provides the provisions relating to Punishment for fraud. As per section 447, without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud involving an amount of at least ten lakh rupees or one per cent. of the turnover of the company, whichever is lower shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud: Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years. Provided further that where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to fifty lakh rupees or with both. In view of the above said provisions, it can be said that Swayam's action of omitting material facts comes under section 448 and is liable for being punished in accordance with section 447 of the Act.