Managing Director Not Liable for Company's Unauthorized Share Issuance Without Proof of Default

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The Board disposed of proceedings against the Noticee regarding liability for company's unauthorized issuance of Redeemable Preference Shares to public without compliance with Companies Act, 1956 and SEBI Act, 1992. The Board held that liability under Section 73(2) requires establishing the person as an "officer who is in default" per Section 5 of Companies Act, 1956, which includes managing directors, whole-time directors, managers, secretaries, or persons charged with statutory compliance responsibilities. Since the Final Order failed to identify any specific officer in default and record showed another individual as Managing Director during relevant period 2011-12, with no evidence of Noticee's involvement in RPS issuance or designation as responsible officer, the Board concluded Noticee could not be held liable for alleged contraventions and disposed of proceedings.....