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CS Professional · Compliance Management, Audit and Due Diligence · Relief and Remedies

A company secretary asks which of the following facts is essential for a court to excuse an officer under Section 463(1). Which is correct?

The officer must have acted both honestly and reasonably, and the court must find that, considering all circumstances including those connected with his appointment, he ought fairly to be excused. Honesty alone or reasonableness alone is insufficient under Section 463(1), and repayment is not a stated requirement.

  1. AThe officer acted honestly and reasonably, and ought fairly to be excused having regard to all circumstances, including those connected with his appointmentCorrect
  2. BThe officer acted honestly, whether or not reasonably
  3. CThe officer acted reasonably, whether or not honestly
  4. DThe officer has already repaid the loss in full

Explanation

Section 463(1) requires that the officer acted honestly and reasonably, and that considering all circumstances, including those connected with his appointment, he ought fairly to be excused. Both honesty and reasonableness are needed; repayment is not a stated condition.

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