Section 625
Section 625 of the Companies Act, 1956 No. 1 of 1956. PAYMENT OF COMPENSATION IN CASES OF FRIVOLOUS OR VEXATIOUS PROSECUTION (1) In respect of any case instituted upon the complaint of a shareholder against the company or any officer thereof in pursuance of section 621, the provisions of section 250 of the Code of Criminal Procedure, 1898 (5 of 1898),
PAYMENT OF COMPENSATION IN CASES OF FRIVOLOUS OR VEXATIOUS PROSECUTION (1) In respect of any case instituted upon the complaint of a shareholder against the company or any officer thereof in pursuance of section 621, the provisions of section 250 of the Code of Criminal Procedure, 1898 (5 of 1898), shall not apply ; and the following provisions shall apply instead.
(2) If the Magistrate by whom any such case is heard discharges or acquits all or any of the accused and is of opinion that the accusation against them or any of them was false and either frivolous or vexatious, the Magistrate may, by his order of discharge or acquittal, if the shareholder upon whose complaint the accusation was made is present, call upon him forthwith to show cause why he should not pay compensation to such accused, or to each or any of such accused when there is more than one, or if such shareholder is not present, direct the issue of a summons to him to appear and show cause as aforesaid.
(3) The Magistrate shall record and consider any cause which such shareholder may show ; and if the Magistrate is satisfied that the accusation was false and either frivolous or vexatious, he may, for reasons to be recorded, direct that compensation to such amount as he may determine be paid by such shareholder to the accused or to each or any of them, not exceeding one thousand rupees in all.
(4) The Magistrate may, by the order directing payment of the compensation under sub-section (3), further order that, in default of payment, the shareholder ordered to pay such compensation shall suffer simple imprisonment for a term not exceeding two months.
(5) When any person is imprisoned under sub-section (4), the provisions of sections 68 and 69 of the Indian Penal Code (45 of 1860) shall, so far as may be, apply.
(6) No person who has been directed to pay compensation under this section shall, by reason of such order, be exempted from any civil or criminal liability in respect of the complaint made by him :
Provided that any amount paid to an accused person under this section shall be taken into account in awarding compensation to such person in any subsequent civil suit relating to the same matter.
(7) A complainant who has been ordered to pay compensation under sub-section (3) by a Magistrate may appeal from the order, insofar as it relates to the payment of compensation, as if such complainant had been convicted on a trial held by such Magistrate.
(8) Where an order for payment of compensation to an accused person is made, the compensation shall not be paid to him before the period allowed for the presentation of the appeal under sub-section (7) has elapsed ; or, if an appeal is presented, before the appeal has been decided.
Section 625, The Companies Act, 1956 No. 1 of 1956 (Act 1 of 1956).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 1
Questions about Section 625
How do I find court cases under Section 625 of the Companies Act, 1956 No. 1 of 1956?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act, 1956 No. 1 of 1956 625, section 625 Companies Act, 1956 No. 1 of 1956, section 625 of the Companies Act, 1956 No. 1 of 1956. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 625 of the Companies Act, 1956 No. 1 of 1956, and has it changed?
Its own text turns on section 621, Indian Penal Code 68 (Imprisonment to terminate on payment of fine), Indian Penal Code 69 (Termination of imprisonment on payment of proportional part of fine), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.
When was the Companies Act, 1956 No. 1 of 1956 enacted?
Companies Act, 1956 No. 1 of 1956 was enacted in 1956 as Act 1 of 1956. India Code records no commencement date for it. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Read from the Government's own scanned gazette with Azure Document Intelligence, then split into sections by their numbering. India Code publishes no text for this Act. The scan itself is mirrored into our own storage and served at /scan/8e2003f8-5257-40ba-a43e-175244af90a3.pdf, so the reading here can be checked against the page it came from without depending on India Code's own copy staying where it is (it was at https://indiacode.gov.in/server/api/core/bitstreams/87f496ee-26c8-4cc1-a359-1ef679855c85/content). This page is not a substitute for legal advice.