The liabilities of a company secretary, may be studied under two leads:
(1) Statutory liabilities, and (2) Contractual liabilities.
(1) Statutory liabilities :
A reference has already been made (under the heading Duties of a Company Secretary towards the Company) to the obligations imposed on the company secretary, being the chief administrative officer of the company under the Companies Art, the Income Tax Act, the Income-Tax Act, the Monopolies and Restrictive Trade Practices Act, etc. Obviously, failure to perform the duties entrusted to him under the various Acts exposes the company secretary to penalties and imprisonments. The specific punishments prescribed by the Companies Act have been dealt with at the appropriate places in the text. For the sake of example, however, a few statutory liabilities of the company secretary under different Sections of the Companies Act are listed below:
(a) Sections 39 : for failure to send copies of Memorandum and Articles, etc., to members within seven days of the requirement— fine upto Rs 50 for each offence.
(b) Section 75 : for failure of file with the Registrar a return of the allotments of shares within thirty days after the allotment— fine up to Rs. 500 for every day during which the default continues.
(c) Section 150 : for failure to maintain register of members with prescribed particulars – fine up to Rs. 50 for every day during which the default continues.
(d) Section 165 : for default in holding the statutory meeting and filing the statutory report fine up to Rs. 500.
(e) Section 168 : for default in holding the annual general meeting of the company— fine up to Rs 500 and in the case of a continuing default, a further fine up to Rs. 250 for every day after the first during which such default continues.
(f) Section 303 : for failure to maintain register of directors etc., with prescribed particulars fine up to Rs 50 for every day during which the default continues.
(g) Section 307 : for failure to maintain a register of directors’ shareholdings with prescribed particulars -fine up to Rs. 5,000 and also a future fine up to Rs 20 for every day during which the default continues.
A reference to the obligations of the company secretary under the Indian Stamp Act, the Income-Tax Act, etc., has already been made.
(2) Contractual liabilities :
A company secretary has also certain liabilities arising out of his contract of service with the company. So long as he acts within the scope of. his authority, in good faith, bona fide and take reasonable care in the discharge of his duties, he incurs no personal liability. But hg will be held personally liable to make good the loss to the company for willful negligence, or misconduct or fraud committed within the course of his employment. He also becomes personally liable if he acts beyond his authority, for any loss suffered by the company or any third party on account of his action. However, he is not liable for fraud committed by his assistants unless his connivance is proved.