law: Companies Act, 2013 
  35.
  
  Civil
  
  liability for misstatements in prospectus.
  1.      Where a person has
  
  subscribed for securities of a company acting on any statement included, or the
  
  inclusion or omission of any matter, in the prospectus which is misleading and
  
  has sustained any loss or damage as a consequence thereof, the company and
  
  every person who—
  a.     
  
    is
  
  a director of the company at the time of the issue of the prospectus;
  b.    
  
    has
  
  authorised himself to be named and is named in the prospectus as a director of
  
  the company, or has agreed to become such director, either immediately or after
  
  an interval of time;
  c.     
  
    is
  
  a promoter of the company;
  d.    
  
    has
  
  authorised the issue of the prospectus; and
  e.     
  
    is
  
  an expert referred to in sub-section (5 ) of section 26, shall, without
  
  prejudice to any punishment to which any person may be liable under section 36,
  
  be liable to pay compensation to every person who has sustained such loss or
  
  damage.
  1.     
  2.      No person shall be
  
  liable under sub-section (1 ), if he proves—
  a.     
  
    that,
  
  having consented to become a director of the company, he withdrew his consent
  
  before the issue of the prospectus, and that it was issued without his
  
  authority or consent; or
  b.    
  
    that
  
  the prospectus was issued without his knowledge or consent, and that on
  
  becoming aware of its issue, he forthwith gave a reasonable public notice that
  
  it was issued without his knowledge or consent.
  3.      Notwithstanding
  
  anything contained in this section, where it is proved that a prospectus has
  
  been issued with intent to defraud the applicants for the securities of a
  
  company or any other person or for any fraudulent purpose, every person
  
  referred to in subsection (1 ) shall be personally responsible, without
  
  any limitation of liability, for all or any of the losses or damages that may
  
  have been incurred by any person who subscribed to the securities on the basis
  
  of such prospectus.