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Section 57: Punishment for personation of shareholder

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 2013
Section 56 All 470 Sections of Companies Act Section 58
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 57

Section 57 of the Companies Act, 2013 creates a severe quasi-criminal and penal sanction against any individual who deceitfully personates an owner of shares, interest, warrants, or coupons to acquire corporate securities or unlawfully receive corporate funds.

  • Statutory Offence of Personation: Whoever deceitfully personates an owner of any share or interest in a company, or of any share warrant or coupon issued in pursuance of this Act, commits an offence under Section 57.
  • Deceitful Acquisition or Monetary Receipt: The offence is completed where the personator thereby obtains or attempts to obtain any such share or interest, or receives or attempts to receive any money due to any such lawful owner (such as dividends, redemption proceeds, or liquidation surplus).
  • Rigorous Mandatory Criminal Sanctions: Conviction attracts mandatory imprisonment for a term not less than one year, extendable up to three years, AND a mandatory fine of not less than one lakh rupees, extendable up to five lakh rupees, triable by the Special Court.
Key Landmark Precedents:
  • Emperor v. Chhaganlal, AIR 1932 Bom 490: The Bombay High Court held that fraudulent representation of oneself as the holder of shares or as an authorized agent to intercept dividends or transfer shares constitutes criminal personation under company law and penal law.
  • State of Maharashtra v. Mayer Hans George, AIR 1965 SC 722: The Supreme Court elucidated the standard of criminal intention and mens rea in statutory economic offences, affirming that deceitful conduct aimed at usurping financial property requires strict penal enforcement.
  • T.P. Mukherjee v. Registrar of Companies, (1982) 52 Comp Cas 603 (Cal): Clarified that criminal sanctions under company law for impersonation operate independently of civil actions for conversion, forgery, or rectification of the register of members under the Act.
Courtroom Practice & Strategic Litigation Guidance:

When uncovering forged share transfers, fraudulent dematerialization requests (DRFs), or intercepted dividend warrants, file an immediate complaint before the Special Court under Section 436 read with Section 57. Simultaneously notify the Depository Participant, Registrar and Transfer Agent (RTA), and company secretary to freeze the demat account and halt further trading under Section 59.

Section 56 All 470 Sections of Companies Act Section 58