Section 340 Of Companies Act 2013

Power of Tribunal to Assess Damages Against Delinquent Directors

The provisions of Section 340 of Companies Act 2013 are:

(1) If it is discovered during the winding up of a business that any person who was involved in its promotion or establishment, or who is or has been a director, manager, Company Liquidator, or officer of the company—

(a) Has misapplied, retained, or been responsible or accountable for any of the company's money or property; or (b) has misapplied, retained, or become liable or accountable for any of the company's money or property; or

(b) Has been involved in any misdeeds or breaches of trust involving the firm,

On the application of the Official Liquidator, the Company Liquidator, or any creditor or contributory, made within the period specified in sub-section (2), the Tribunal may inquire into the conduct of the person, director, manager, Company Liquidator, or officer aforesaid, and order him to repay or restore the money or property, or any part thereof, with interest at such rate as the Tribunal considers just and proper, or to contribute sui generis.

(2) An application under subsection (1) must be filed within five years of the date of the winding-up order, or the first appointment of the Company Liquidator in the winding up, or the date of the misapplication, retainer, misfeasance, or breach of trust, whichever comes first.

(3) This provision applies even if the matter is one for which the person concerned may face criminal charges.