Home  /  Companies Act  /  Section 456

Section 456: Protection of action taken in good faith

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 455 All 470 Sections of Companies Act Section 457
Statutory Defined Terms in this Section: (Click any term for official legal definition)
Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 456

Section 456 confers statutory immunity on the Central Government, Tribunal, Appellate Tribunal, Registrar, and government officers from civil suits, prosecutions, and other legal proceedings for acts done in good faith under the Act.

  • Broad Public Immunity Shield: Protects the Central Government, NCLT, NCLAT, RoC, SFIO inspectors, Official Liquidators, and authorized officers against civil suits and criminal prosecutions.
  • Requirement of Statutory Good Faith: Demands that the challenged regulatory action, inspection, search, seizure, or order was executed honestly, with due care, and pursuant to statutory powers under the Act or rules.
  • Exclusion of Malicious or Ultra Vires Acts: Clarifies that arbitrary, corrupt, or blatantly ultra vires administrative actions performed outside statutory authority do not enjoy good faith immunity.
Key Landmark Precedents:
  • Harishankar Bagla v. State of M.P., AIR 1954 SC 465: Affirmed that statutory good faith immunity provisions are constitutionally necessary to shield public regulators and law enforcement officers from retaliatory harassment by regulated commercial entities.
  • State of Gujarat v. Kansara Manilal Bhikhalal, AIR 1964 SC 1893: Held that 'good faith' under penal and administrative statutes implies due care and attention, requiring that the official acted on honest belief grounded in statutory mandate.
  • Brij Mohan Gupta v. Registrar of Companies, 2012 SCC OnLine Del 3381: Held that the RoC and regulatory officers are immune from civil damages for actions taken within statutory administrative remit.
Courtroom Practice & Strategic Litigation Guidance:

In challenging RoC search and seizure or SFIO summonses, do not file private damages suits or criminal complaints against individual officers; challenge the administrative order directly before the High Court under Article 226, as Section 456 will mandate summary dismissal of personal suits against officials.

Section 455 All 470 Sections of Companies Act Section 457