THE COMPANIES ORDINANCE, 1972

Proceedings against officers for breach of duty

181.  Subject as hereinafter provided, any provision, whether contained in the memorandum or articles of a company or in any contract with a company or otherwise, for exempting any officer or auditor of the company from, or indemnifying him against, liability in respect of any negligence, default or breach of duty of which he may be guilty in relation to the company shall be void :

Provided that, notwithstanding anything in this section, a company may, in pursuance of any such provision as aforesaid, indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour, or in which he is acquitted, or in connection with any application under section 182 in which relief is granted to him by the court.

182.—(1) If in any proceedings for negligence, default or breach of duty against an officer or auditor of a company it appears to the court hearing the case that that officer or auditor is or may be liable in respect of the negligence, default or breach of duty, but that he has acted honestly and reasonably, and that, having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused for the negligence, default or breach of duty, that court may relieve him, either wholly or partly, from his liability on such terms as the court may think fit.

(2) Where any such officer or person aforesaid has reason to apprehend that any claim will or may be made against him in respect of any negligence, default or breach of duty, he may apply to the court for relief, and the court on any such application shall have the same power to relieve him as under this section it would have had if it had been a court before which proceedings against that person for negligence, default or breach of duty had been brought.