https://www.taxtmi.com/caselaws?id=96861 Section 235 liability is examined for three directors in respect of payments to a firm, applying the principle that officers' acts or omissions amounting to breach of duty, including gross negligence, that cause pecuniary loss attract compensation. A director who resigned before the company commenced business and before the payments was held not liable. A director who failed to make reasonable inquiries, sanctioned contested resolutions and did not prevent payments was held guilty of gross negligence and partially liable. A director closely associated with promoters, who signed a false prospectus and was linked to the fraudulent scheme, was held complicit and partially liable. Liability is assessed by reference to culpability and temporal connection to the wrongful acts. en-us Thu, 01 May 1941 00:00:00 +0530 Wed, 11 Jan 2012 16:40:25 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=96861 Section 235 liability is examined for three directors in respect of payments to a firm, applying the principle that officers' acts or omissions amounting to breach of duty, including gross negligence, that cause pecuniary loss attract compensation. A director who resigned before the company commenced business and before the payments was held not liable. A director who failed to make reasonable inquiries, sanctioned contested resolutions and did not prevent payments was held guilty of gross negligence and partially liable. A director closely associated with promoters, who signed a false prospectus and was linked to the fraudulent scheme, was held complicit and partially liable. Liability is assessed by reference to culpability and temporal connection to the wrongful acts. Case-Laws Companies Law Thu, 01 May 1941 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=96861