Chapter XXIX - Miscellaneous
Section 463
Section 463: power of court to grant relief in certain cases
Section 463 allows a court to relieve an officer of a company, wholly or partly, from liability for negligence, default, breach of duty, misfeasance or breach of trust, if the officer acted honestly and reasonably and ought fairly to be excused. An officer who expects proceedings may apply to the High Court in advance.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company, it appears to the court hearing the case that he is or may be liable in respect of the negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the court may relieve him, either wholly or partly, from his liability on such term, as it may think fit: Provided that in a criminal proceeding under this sub-section, the court shall have no power to grant relief from any civil liability which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust. (2) Where any such officer has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a court before which a proceedings against that officer for negligence, default, breach of duty, misfeasance or breach of trust had been brought under sub-section (1). (3) No court shall grant any relief to any officer under sub-section (1) or sub-section (2) unless it has, by notice served in the manner specified by it, required the Registrar and such other person, if any, as it thinks necessary, to show cause why such relief should not be granted.
Introduction
In a criminal proceeding the court cannot grant relief from any civil liability. No relief may be granted unless the court has required the Registrar, and anyone else it thinks necessary, to show cause.
The section commenced on 12 September 2013 under S.O. 2754(E). The India Code consolidated text shows no amendment, and the text matches the 2013 Gazette.
Key takeaways
Honest and reasonable
The officer must have acted honestly and reasonably and ought fairly to be excused, having regard to all the circumstances.
Advance application
An officer who apprehends proceedings may apply to the High Court for relief under sub-section (2).
Registrar must be heard
No relief is granted without notice to the Registrar to show cause.
Relief in a proceeding: sub-section (1)
If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company it appears to the court that the officer is or may be liable, but has acted honestly and reasonably and, having regard to all the circumstances including those connected with his appointment, ought fairly to be excused, the court may relieve him, wholly or partly, from liability on such terms as it thinks fit. In a criminal proceeding the court has no power to grant relief from any civil liability that may attach to the officer.
Advance application to the High Court: sub-section (2)
Where an officer has reason to apprehend that a proceeding will or might be brought against him for negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief. The High Court has the same power to relieve him as a court before which such a proceeding had been brought under sub-section (1).
Notice to the Registrar: sub-section (3)
No court may grant relief under sub-section (1) or (2) unless it has, by notice served in the manner it specifies, required the Registrar and such other person, if any, as it thinks necessary to show cause why relief should not be granted.
Practical preparation
Collect evidence that the officer acted honestly and reasonably, such as board papers, advice taken and the information available at the time; set out the circumstances of the appointment and role; in a criminal proceeding, note that civil liability cannot be relieved; for an advance application, identify the apprehended proceeding and apply to the High Court; expect notice to the Registrar.
Practical checklist
Do
- Keep records showing the basis on which decisions were taken.
- Seek advice early if proceedings are apprehended.
Avoid
- Do not expect relief from civil liability in a criminal proceeding.
- Do not rely on the section where honesty or reasonableness is doubtful.
Illustrative example
Hypothetical: a director and a company default
A director faces a proceeding for a default by the company. The director raised the issue at board meetings and relied on management assurances recorded in the minutes.
Liability
The court finds the director is or may be liable for the default.
Conduct
The minutes show the director acted honestly and reasonably in the circumstances.
Notice
The court requires the Registrar to show cause before deciding on relief.
Outcome
- The court may relieve the director wholly or partly, on terms it thinks fit.
Glossary
- Misfeasance
- Improper performance of a lawful act, such as misapplying company property.
- Officer
- An officer of a company as defined in section 2 of the Act.
Frequently asked questions
Can a director get relief under section 463 before being sued?
Yes. Under sub-section (2), an officer who has reason to apprehend proceedings may apply to the High Court, which has the same power to relieve him as the court hearing such a proceeding would have.
Can relief be granted from civil liability in a criminal case?
No. The proviso to sub-section (1) says that in a criminal proceeding the court has no power to grant relief from any civil liability.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026