Company Registration in Tirupur
Section does not affect other remedies
Section 56(6) of the 1956 Act clearly provides that nothing in the section shall limit or diminish any liability which any person may incur under the general law or under the 1956 act apart from section 56 of the 1956 Act. Thus any action which would lie, apart from section 56 of the 1956 Act, will still be available. Accordingly, even if the prospectus complies with section 56 of the 1956 Act, it may still by reason of false or fraudulent statements give a subscriber the right to take legal proceedings for rescission of his contract, or for compensation or damages, under sections 62,63 of the 1956 Act. A person, not having any interest in the company, cannot come forward and allege that a future investor, may suffer on account of false statements in the prospectus and therefore the company should be restrained from proceedings in a particular manner.
Remedy of aggrieved person
An allotment may claim relief for misrepresentation, if he proves:
- that the misrepresentation was one of fact;
- that he acted upon it; and
- that it was material.
Where the name of the allottee is placed on the register of members or debenture-holders, as the case may be, and the allottee rescinds the allotment for a valid reason he can claim rectification of the register.
To succeed in an action for deceit, the aggrieved person must prove in addition to the above three facts,
- that those acting on behalf of the company acted frequently;
- that those purporting to act on behalf of the company were authorized to act in its behalf; and
- that he suffered a loss or a damage.
In order to obtain any personal remedy in damages , it is not enough to prove that the director sued had been guilty of gross negligence or that he made the statement without any reasonable grounds for believing it to be true.
For Company Registration in Tirupur -> Click here.