Company Law - Section 403 of the Companies Act, 1956

Question- Section 403 of the Companies Act, 1956 deals with the punishment for a company that contravenes any provision of this Act or of any previous Company Law enforcing Act, if the Act so provides. Explain the scope of this Section, with reference to Section 4 and Section 617 of the Companies Act, 1956.

Scope of this section is very vague - if you read this section in isolation, it seems very broad. But when you see other sections like Section 4 and Section 617, you understand the real meaning. Section 4 says that all company's acts must be done in good faith. If a company is found to have not acted in good faith, Section 403 comes into play. Section 617 makes directors personally liable if they know the company's act is going to harm the interest of shareholders.