Amended and updated notes on section 36 of Companies Act 2013. Detail discussion on provisions and rules related to punishment for fraudulently inducing persons to invest money.
Chapter III (Sections 23–42) of the Companies Act, 2013 (CA 2013) deals with the provisions related to prospectus and allotment of securities. Section 36 of CA 2013 provides for punishment for fraudulently inducing persons to invest money.
Recently, we have discussed in detail section 35 (Civil liability for misstatements in prospectus) of CA 2013. Today, we learn the provisions of section 36 of Companies Act 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014.
Section 36 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 2754(E) issued dated 12.09.2013. This notification was come into force from 12th September, 2013 i.e. the commencement date of section 36 is 12-9-2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | III |
| Chapter Name | Prospectus and Allotment of Securities |
| Section No. | 36 |
| Section Name | Punishment for fraudulently inducing persons to invest money |
| Monthly Updated Edition | Company Law PDF |
Section 36 of Companies Act 2013: Punishment for fraudulently inducing persons to invest money
Section 36 shall come into force on 12th September, 2013 vide Notification No. S.O. 2754(E) dated 12.09.2013.
Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into, —
- (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or
- (b) any agreement, the purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or
- (c) any agreement for, or with a view to obtaining credit facilities from any bank or financial institution,
shall be liable for action under section 447.