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

Rahul Menon, a director of Kaveri Textiles Ltd, learns that the company's lender may sue him for alleged breach of duty in approving a loan. No proceeding has yet been filed. Where may he seek relief under Section 463?

Rahul may apply to the High Court. Under Section 463(2), an officer who has reason to apprehend a proceeding for negligence, default, breach of duty, misfeasance or breach of trust can seek relief in advance, and the High Court has the same relieving power as a trial court.

  1. AHe may apply to the High Court for relief, as he has reason to apprehend a proceedingCorrect
  2. BHe must wait until a proceeding is filed, since relief is available only in pending cases
  3. CHe may apply to the Registrar of Companies, who can excuse him wholly or partly
  4. DHe may apply to the Special Court, which is deemed a Court of Session

Explanation

Section 463(2) lets an officer who has reason to apprehend that a proceeding will or might be brought against him apply to the High Court. The High Court has the same power to relieve as a court hearing a proceeding under sub-section (1). Waiting for a filed case is therefore not required.

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