Section 4: Provisions relating to section 3

(1) Where approval of the Minister or, as the case may be, of the Allotment Committee of the Commission has not been obtained as required under section 3 of this Act or if any application in relation thereto has been refused-
(a) any allotment, transfer, sale of shares and increase in share capital of any enterprise to which this Act applies shall be void and shall be of no effect whatsoever;
(b) any moneys accepted in relation to or connected with any of the transactions referred to in section 3 of this Act shall forthwith be repaid without interest by the vendor or transferor.
(2) If any money referred to in subsection (1) of this section is not repaid within fourteen days after the notification of the refusal to give the approval, the directors of the company concerned shall be personally jointly and severally liable to repay the money with interest at the rate of five per cent per annum from the expiration of the fourteenth day:
Provided that-
(a) a director shall not be liable if he proves that the default in the repayment of the money is not due to misconduct or negligence on his part; and
(b) all the moneys involved had been kept in a separate bank account to facilitate repayment.
(3) The reference in subsection (2) of this section to "directors of a company" shall-
(a) in the case of a partnership, be construed as a reference to the partners of the body concerned; and
(b) in the case of any other unincorporated body, be construed as a reference to the person in which is vested the beneficial ownership of the enterprise concerned.