Section 463 of the Companies Act, 2013: Power of court to grant relief in certain cases
Updated: Oct 20
The section states that:
(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:
Provided 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).
(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.
Section 463 of CA 2013 provides for the power of the court to grant relief in certain cases. But, courts power to grant relief under this section is limited. The High Court also has the power to grant relief in cases where such proceedings are reasonably apprehended by the officer. In such cases the High Court has the same power to relieve him as it is court before which a proceeding against that officer. But the power under this section of the CA 2013 will not be applicable in cases of prosecutions involving any criminal liability. This means that the provisions of Section 463 of the CA 2013 will not help in any way to wholly or partially relieve the officer of a criminal liability in a prosecution. In such cases the power to quash the proceedings can be found only under Section 482 Cr.P.C.