Section 463: Power of court to grant relief in certain cases
This section allows the court to excuse company officers from liability for negligence or similar wrongdoing if they acted honestly and reasonably, under certain conditions.
The section, clause by clause
What the section says
In plain terms
(1)If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company, it appears to the court hearing the case that he is or may be liable in respect of the negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the court may relieve him, either wholly or partly, from his liability on such term, as it may think fit:
If a company officer is sued for negligence or similar wrongdoing but has acted honestly and reasonably, the court may partially or fully excuse them from liability, on terms it sees fit, except in criminal cases where it cannot relieve them from related civil liability.
provisoProvided that in a criminal proceeding under this sub-section, the court shall have no power to grant relief from any civil liability which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust.
(2)Where any such officer has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a court before which a proceedings against that officer for negligence, default, breach of duty, misfeasance or breach of trust had been brought under sub-section (1).
An officer who thinks they might be sued for negligence or similar wrongdoing can apply to the High Court for relief, and the court has the same power to grant relief as it would if the officer were already being sued.
(3)No court shall grant any relief to any officer under sub-section (1) or sub-section (2) unless it has, by notice served in the manner specified by it, required the Registrar and such other person, if any, as it thinks necessary, to show cause why such relief should not be granted.
Before granting relief to an officer, the court must give the Registrar and any other necessary person notice and a chance to explain why relief should not be granted.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 21 of 2015, s. 23, for sub-section (2) (w.e.f. 29-5-2015).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.