1. If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company, it appears to the court hearing the case that he is or may be liable in respect of the negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the court may relieve him, either wholly or partly, from his liability on such term, as it may think fit:
Provided that: in a criminal proceeding under this sub-section, the court shall have no power to grant relief from any civil liability which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust.
2. Where any such officer has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a court before which a proceedings against that officer for negligence, default, breach of duty, misfeasance or breach of trust had been brought under sub-section (1 ).
3. No court shall grant any relief to any officer under sub-section (1 ) or sub-section (2 ) unless it has, by notice served in the manner specified by it, required the Registrar and such other person, if any, as it thinks necessary, to show cause why such relief should not be granted.
Legal Commentary & Landmark Judgments: Section 463
Section 463 empowers the court or National Company Law Tribunal to grant equitable relief from liability to corporate officers who acted honestly and reasonably and ought fairly to be excused.
Section 463 operates as the corporate equivalent of an equitable pardon. When an independent or non-executive director is caught in technical regulatory violations or legacy company defaults, filing a Section 463 petition before the court enables the director to establish that he acted honestly and reasonably relying on executive reports, shielding him from disqualification or monetary damages.