Right of Indemnity [Section 62(4)].

expert who has escaped liability on the above grounds, shall be entitled to be indemnified by other directors or e”perts who continue to be liable, against

all damages, costs and expenses which he may have incurred.

(b) Right of Contribution [Section 62(5»). The right of contribution between persons jointly blble is there, if only one or few ofthem have paid damages for

loss arising out of misrepresentation.

3. Liability for Omissions. Section 56 imposes liability for omissions, i.e., leaving out items which the Hnd Schedule of the Act, requires to be disclosed in a

Prospectus. If any subscriber suffers any loss due to omission,

.all those persons who authorised the issue of Prospectus shall be liable to pay damage to each subscriber at his instance. The subscriber must

however, satisfy the court (i) that of the said omission had not been there in the prospectus. he would not have taken the shares and (ii) that he has

actually sustained the loss.

But a person can escape liability if he proves that:

· He was ignomnt of the omission; or

· The non-disclosure arose from an honest mistake of fact on his part; or

· The court regards such omission as immaterial and excusable. 4. Criminal Liability [Section 63]. Criminal liability involves a fine

or a term of imprisonment on the guilty party whereas civil liability involves a remedy to the aggrieved party, e.g., paying damages by way of compensation.

Section 63 states that every person who authorises the issue of a prospectus containing an untrue statement is liable .to imprisonment for a term which

may extend to 2 years, or with fine which may extend to Rs. 50,000, or both. He may, however, escape liability ifhe proves: