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

Mr. Arvind Shah, a director of Kaveri Agro Ltd, learns that shareholders are preparing to sue him for breach of duty over an approval he gave to a related transaction. No proceeding has yet been filed. Which course is available to him under Section 463?

He may apply in advance to the High Court. Section 463(2) lets an officer who reasonably apprehends a proceeding for negligence, default, breach of duty, misfeasance or breach of trust seek relief, and the High Court has the same power as under sub-section (1).

  1. AHe may apply to the High Court for relief, which has the same power as a court hearing the proceeding under sub-section (1)Correct
  2. BHe cannot seek relief until a proceeding is actually filed against him
  3. CHe may apply to the Registrar, who can excuse him from liability
  4. DHe may apply to any civil court of the district, which has the same power

Explanation

Section 463(2) permits an officer who has reason to apprehend a proceeding to apply to the High Court in advance. The High Court then has the same power to relieve him as a court hearing a proceeding under sub-section (1). Waiting for a filed proceeding is not required, and the application must go to the High Court, not the Registrar or any civil court.

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