Amended and updated notes on section 378T of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Liability of directors.
Chapter XXIA PART-III (Sections 378O to 378Z) of the Companies Act 2013 (CA 2013) deals with the provisions related to management of producer company. Section 378T of CA 2013 provides for Liability of directors.
Recently, we have discussed in detail section 378S (Matters to be transacted at general meeting) of CA 2013. Today, we learn the provisions of section 378T of the Companies Act 2013.
In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government appoints the 11th February, 2021 as the date on which the provisions of section 52 of the Companies (Amendment) Act, 2020 shall come into force.
Accordingly, the provisions of section 378T are effective from 11th February, 2021. You may refer Notification No. S.O. 644(E) dated 11-02-2021. In this article, you will learn detail of the provisions of section 378T the Companies Act 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. | XXIA (PART-III) |
| Chapter Name | Management of Producer Company |
| Section No. | 378T |
| Section Name | Liability of directors |
| Monthly Updated Edition | Company Law PDF |
Section 378T: Liability of directors
Section 378T(1) of Companies Act
When the directors vote for a resolution, or approve by any other means, anything done in contravention of the provisions of this Act or any other law for the time being in force or articles, they shall be jointly and severally liable to make good any loss or damage suffered by the Producer Company.
Section 378T(2) of Companies Act
Without prejudice to the provisions contained in sub-section (1), the Producer Company shall have the right to recover from its director—
(a) where such director has made any profit as a result of the contravention specified in sub-section (1), an amount equal to the profit so made;
(b) where the Producer Company incurred a loss or damage as a result of the contravention specified in sub-section (1), an amount equal to that loss or damage.
Section 378T(3) of Companies Act
The liability imposed under this section shall be in addition to and not in derogation of a liability imposed on a director under this Act or any other law for the time being in force.