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36 Punishment for fraudulently inducing persons to invest money.

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CHAPTER III

Section 36 of Companies Act 2013

Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into,—

a.     any agreement for, or with a view to, acquiring, disposing of, subscribing for, or underwriting securities; or

b.    any agreement, the purpose or the pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or

c.     any agreement for, or with a view to obtaining credit facilities from any bank or financial institution, shall be liable for action under section 447.

Short Notes:

  • This section came into force from September 12, 2013.
  • It seeks to provide that such persons who fraudulently induce persons to invest money by making statement which is false, deceptive, misleading or deliberately conceal any facts, shall be punishable for fraud.

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