358.
| (1) Where 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 creditors of any other person or for any fraudulent purpose, the court may, on the application of the official receiver, or the liquidator or any creditor or contributory of the company, where it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business, in the manner referred to in section 350 shall be personally responsible, without any limitation or liability, for all or any of the debts or other liabilities of the company as the court may direct. At the hearing of an application under the provisions of this subsection the official receiver or the liquidator, as the case may be, may himself give evidence or call witnesses. |
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| (2) Where the court makes any declaration under the pro visions of subsection (1), it may give such further directions as it thinks proper for the purpose of giving effect to the declaration, and in particular may 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 on any assets of the company held by or vested in him, or any company or person on his behalf, or any person claiming as assignee from or through the person liable or any company or person acting on his behalf, and may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under the provisions of this subsection. |
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| (3) Where any business of a company is carried on with such intent or for such purpose as is referred to in subsection (1), every person who was knowingly a party to the carrying on of the business in the manner aforesaid, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding five thousand rupees or to imprisonment of either description for a term not exceeding two years or to both such fine and imprisonment. |
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| (4) The provisions of this section shall have effect not withstanding that the person concerned may be criminally liable in respect of the matters on the ground of which the declaration is to be made, and the declaration shall, for the purposes of the Insolvency Ordinance, be deemed to be a judgment for the recovery of a debt or money demand referred to in section 12 of that Ordinance. |
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Sri Lanka Consolidated Acts