Section 75: Damages for fraud
This section is for holding companies and their officers liable for damages if they fail to repay deposits or interest due to fraudulent intent.
The section, clause by clause
What the section says
In plain terms
(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.
If a company fails to repay a deposit or interest within the specified time and it is proven that the deposit was accepted with intent to defraud, the company's officers responsible for accepting the deposit will be personally responsible for the depositors' losses or damages.
(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.
Depositors who have incurred losses due to a company's failure to repay deposits or interest can take legal action against the company.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 1 of 2018, s. 15, for clause (c) (w.e.f. 15-8-2018).
- 2. Clause (d) omitted by s. 15, ibid. (w.e.f. 15-8-2018).
- 3. Subs. by s. 15, ibid., for “such deposits;” (w.e.f. 15-8-2018).
- 4. Subs. by s. 16, ibid., for clause (b) (w.e.f. 15-8-2018).
- 1. Ins. by Act 21 of 2015, s. 8 (w.e.f. 29-5-2015).
- 2. Subs. by Act 1 of 2018, s. 17, for “one crore rupees” (w.e.f. 9-2-2018).
- 3. Subs. by s. 17, ibid., for “seven years or with fine” (w.e.f. 9-2-2018).
- 4. The words “or with both” omitted by s. 17, ibid. (w.e.f. 9-2-2018).
- 5. Subs. by Act 22 of 2019, s. 11, for first and second provisos (w.e.f. 2-11-2018).
This section refers to
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.