law: Companies Act, 2013 
  338.
  
    Liability
  
  where proper accounts not kept.
  1.      Where a company is
  
  being wound up, if it is shown that proper books of account were not kept by
  
  the company throughout the period of two years immediately preceding the
  
  commencement of the winding up, or the period between the incorporation of the
  
  company and the commencement of the winding up, whichever is shorter, every
  
  officer of the company who is in default shall, unless he shows that he acted
  
  honestly and that in the circumstances in which the business of the company was
  
  carried on, the default was excusable, 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.
  2.      For the purposes of
  
  sub-section (1 ), it shall be deemed that proper books of account have
  
  not been kept in the case of any company,—
  a.     
  
    if
  
  such books of account as are necessary to exhibit and explain the transactions
  
  and financial position of the business of the company, including books
  
  containing entries made from day-to-day in sufficient detail of all cash
  
  received and all cash paid, have not been kept; and
  b.    
  
    where
  
  the business of the company has involved dealings in goods, statements of the
  
  annual stock takings and, except in the case of goods sold by way of ordinary
  
  retail trade, of all goods sold and purchased, showing the goods and the buyers
  
  and the sellers thereof in sufficient detail to enable those goods and those
  
  buyers and sellers to be identified, have not been kept.