Section 428: Protection of action taken in good faith

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
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Legal Commentary & Landmark Judgments: Section 428

Section 428 provides statutory immunity to the Tribunal, Appellate Tribunal, President, Chairperson, Members, and staff from civil suits, criminal prosecutions, and legal proceedings for acts done in good faith under the Act.

  • Comprehensive Legal Immunity: Bars suits, prosecutions, or other legal proceedings against the Tribunal, Appellate Tribunal, or any of their members and officers for any act done or intended to be done in good faith.
  • Good Faith as Statutory Pre-requisite: Requires that the impugned act was performed with due care and attention pursuant to powers conferred by the Companies Act, 2013 or rules framed thereunder.
  • Prohibition of Collateral Civil Attacks: Prevents disgruntled litigants from instituting damages claims or tortious actions against adjudicators for judicial orders or procedural directions.
Key Landmark Precedents:
  • Harishankar Bagla v. State of M.P., AIR 1954 SC 465: Affirmed that statutory good faith immunity clauses are essential to protect public and judicial functionaries from vexatious litigation arising out of discharge of official duties.
  • State of Maharashtra v. Budhikota Subbarao, (1993) 3 SCC 339: Clarified that acts undertaken under color of office without malice or corrupt motive are protected by good faith clauses, barring collateral criminal prosecutions.
  • Goordhandas Khemani v. Governor-General in Council, AIR 1952 Cal 388: Held that acts performed under statutory authority with honest belief in their legality cannot give rise to civil liability in damages.
Courtroom Practice & Strategic Litigation Guidance:

Dismiss in limine any independent civil suit or criminal complaint filed against an NCLT Member or Court Master by pleading the absolute statutory immunity under Section 428; the sole permissible remedy against quasi-judicial orders is appellate review under Section 421 or 423.