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

Ms. Neha Iyer, a whole-time director of Sagar Pharma Ltd, learns that shareholders may sue her for breach of duty over an inaccurate certificate she signed. No proceeding has yet been filed. Which course is available to her under the Companies Act, 2013?

She can apply to the High Court in anticipation. An officer who apprehends a proceeding for negligence, default, breach of duty, misfeasance or breach of trust may seek relief, and the High Court has the same power to relieve as the court hearing the actual proceeding.

  1. AWait until a suit is filed, since no relief can be sought earlier
  2. BApply to the High Court for relief, which has the same power as a court hearing the proceedingCorrect
  3. CApply to the Registrar, who may excuse her liability
  4. DApply to the Central Government for a certificate of relief

Explanation

Under section 463(2), an officer who reasonably apprehends a proceeding for negligence, default, breach of duty, misfeasance or breach of trust may apply to the High Court, which has the same power to relieve as a court hearing such a proceeding. Waiting is not required.

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