Pursuant to Section 35 of the Companies Act, 2013, which

Solution

Section 35 of the Companies Act, 2013 defines the scope of civil liability for mis-statements in prospectus. As per this section:   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