Aarna Ltd. was dealing in export of cotton fabric to specified foreign countries. The company was willing to purchase cotton fields in Punjab State.…

Whether Mr. Nick has any Remedy? Under section 35 (1) of the Companies Act 2013, where a person has subscribed for securities of a company acting on any statement included in the prospectus which is misleading and has sustained any loss or damage as a consequence thereof, the company and every person including an expert shall be liable to pay compensation to the person who has sustained such loss or damage. In the present case, Mr. Nick purchased the shares of Aarna Limited on the basis of the expert's report published in the prospectus. Mr. Nick can claim compensation for any loss or damage that he might have sustained from the purchase of shares. Since, Mr. Nick did not suffer any loss due to purchase of such shares, he cannot claim any compensation for any loss or damage. Section 35 (2) of the Companies Act, 2013, provides the instances when a person shall not be held guilty under section 35 of the Act, if he proves: He withdrew his consent to be a director of company and prospectus issued without his consent and authority.He has given reasonable public notice to effect, that prospectus was issued without his knowledge and consent.He made the statement on the authority of an expert whom he believed to be competent and that the expert had given his consent and had not withdrawn it.He had reasonable ground for believing the statement to be true and that he did believe it to be true up to the time of allotment.The statement was a correct copy of some extract from an official document and that he had in fact believed.