Companies Act Section 75 — Damages for fraud
CHAPTER V ACCEPTANCE OF DEPOSITS BY COMPANIES
Commercial / Corporate
Summary
Sub-section (1) covers the situation where a company does not repay a deposit, part of it, or the interest on it within the time given under section 74, or within any extra time allowed by the Tribunal. If it is proved that the deposits were accepted with the intention to defraud the depositors or for any fraudulent purpose, then every officer of the company who was responsible for accepting those deposits becomes personally responsible, without any limit on that responsibility, for all or any of the losses or damages suffered by the depositors. This responsibility applies in addition to any other provisions in section 74 and any liability under section 447.
Sub-section (2) allows any person, group of persons, or association of persons who has suffered a loss because the company failed to repay the deposits, part of them, or the interest on them, to bring a suit, start proceedings, or take other action.
Official Text
(1) Where a company fails to repay the deposit or part thereof or any interest thereon referred to in section 74 within the time specified in sub-section (1) of that section or such further time as may be allowed by the Tribunal under sub-section (2) of that section, and it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to the provisions contained in sub-section (3) of that section and liability under section 447, be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors.
(2) Any suit, proceedings or other action may be taken by any person, group of persons or any association of persons who had incurred any loss as a result of the failure of the company to repay the deposits or part thereof or any interest thereon.