Building Societies Act, 1989
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Sanctions for breach of section 57 . |
58.—(1) Where a building society enters into a transaction or arrangement contravening section 57 the transaction or arrangement shall be voidable at the instance of the society unless— | |
(a) restitution of any money or any other asset which is the subject matter of the arrangement or transaction is no longer possible, or the society has been indemnified in pursuance of subsection (2) (b) for the loss or damage suffered by it; or | ||
(b) any rights acquired bona fide for value and without actual notice of the contravention by any person other than the person for whom the transaction or arrangement was made would be affected by its avoidance. | ||
(2) Without prejudice to any liability imposed otherwise than by this subsection but subject to subsection (3), where a transaction or arrangement contravening section 57 is made by a society for a director of the society or a person connected with such a director that director and the person so connected and any other director of the society who authorised the transaction or arrangement (whether or not it has been avoided in pursuance of subsection (1) is liable— | ||
(a) to account to the society for any gain which he has made directly or indirectly by the transaction or arrangement; and | ||
(b) jointly and severally with any other person liable under this subsection, to indemnify the society for any loss or damage resulting from the transaction or arrangement. | ||
(3) Where a transaction or arrangement contravening section 57 is entered into by a society and a person connected with a director of the society, that director shall not be liable under subsection (2) if he shows that he took all reasonable steps to secure the society's compliance with that section and, in any case, a person so connected and any such other director as is mentioned in subsection (2) shall not be liable if he shows that, at the time the transaction or arrangement was entered into, he did not know the circumstances constituting the contravention. | ||
(4) An officer of a society who authorises or permits the society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 57 shall be guilty of an offence. | ||
(5) A society which enters into a transaction or arrangement contravening section 57 for one of its directors shall be guilty of an offence unless it shows that, at the time the transaction or arrangement was entered into, it did not know the circumstances constituting the contravention. | ||
(6) A person who procures a society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 57 shall be guilty of an offence. |