What is Power to call for information, inspect books and conduct inquiries? What is power to Conduct of inspection and inquiry? Section 206 and 207 of Indian Companies Act 2013

Power to call for information, inspect books and conduct inquiries and Conduct of inspection and inquiry are defined under Section 206 and 207 of Indian Companies Act 2013. Provisions under these Sections are:

Section 206 of Indian Companies Act 2013 "Power to call for information, inspect books and conduct inquiries"

(1) Where on a scrutiny of any document filed by a company or on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company -

(a) to furnish in writing such information or explanation; or

(b) to produce such documents, within such reasonable time, as may be specified in the notice.

 

(2) On the receipt of a notice under sub-section (1), it shall be the duty of the company and of its officers concerned to furnish such information or explanation to the best of their knowledge and power and to produce the documents to the Registrar within the time specified or extended by the Registrar:

Provided that where such information or explanation relates to any past period, the officers who had been in the employment of the company for such period, if so called upon by the Registrar through a notice served on them in writing, shall also furnish such information or explanation to the best of their knowledge.

(3) If no information or explanation is furnished to the Registrar within the time specified under sub-section (1) or if the Registrar on an examination of the documents furnished is of the opinion that the information or explanation furnished is inadequate or if the Registrar is satisfied on a scrutiny of the documents furnished that an unsatisfactory state of affairs exists in the company and does not disclose a full and fair statement of the information required, he may, by another written notice, call on the company to produce for his inspection such further books of account, books, papers and explanations as he may require at such place and at such time as he may specify in the notice:

Provided that before any notice is served under this sub-section, the Registrar shall record his reasons in writing for issuing such notice.

(4) If the Registrar is satisfied on the basis of information available with or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors are not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information or explanation on matters specified in the order within such time as he may specify therein and carry out such inquiry as he deems fit after providing the company a reasonable opportunity of being heard:

Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct the Registrar or an inspector appointed by it for the purpose to carry out the inquiry under this sub-section:

Provided further that where business of a company has been or is being carried on for a fraudulent or unlawful purpose, every officer of the company who is in default shall be punishable for fraud in the manner as provided in section 447.

(5) Without prejudice to the foregoing provisions of this section, the Central Government may, if it is satisfied that the circumstances so warrant, direct inspection of books and papers of a company by an inspector appointed by it for the purpose.

(6) The Central Government may, having regard to the circumstances by general or special order, authorise any statutory authority to carry out the inspection of books of account of a company or class of companies.

Punishment for violation of Section 206 of Companies Act 2013 regarding information and inspection of books

(7) If a company fails to furnish any information or explanation or produce any document required under this section, the company and every officer of the company, who is in default shall be punishable with a fine which may extend to one lakh rupees and in the case of a continuing failure, with an additional fine which may extend to five hundred rupees for every day after the first during which the failure continues.

Section 207 of Indian Companies Act 2013 "Conduct of inspection and inquiry"

(1) Where a Registrar or inspector calls for the books of account and other books and papers under section 206, it shall be the duty of every director, officer or other employee of the company to produce all such documents to the Registrar or inspector and furnish him with such statements, information or explanations in such form as the Registrar or inspector may require and shall render all assistance to the Registrar or inspector in connection with such inspection.

(2) The Registrar or inspector, making an inspection or inquiry under section 206 may, during the course of such inspection or inquiry, as the case may be, -

(a) make or cause to be made copies of books of account and other books and papers; or

(b) place or cause to be placed any marks of identification in such books in token of the inspection having been made.

(3) Notwithstanding anything contained in any other law for the time being in force or in any contract to the contrary, the Registrar or inspector making an inspection or inquiry shall have all the powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit in respect of the following matters, namely:-

(a) the discovery and production of books of account and other documents, at such place and time as may be specified by such Registrar or inspector making the inspection or inquiry;

(b) summoning and enforcing the attendance of persons and examining them on oath; and

(c) inspection of any books, registers and other documents of the company at any place.

Punishment for violation of Section 207 of Companies Act 2013 for disobeys the direction issued by the Registrar or Inspector

(4) (i) If any director or officer of the company disobeys the direction issued by the Registrar or the inspector under this section, the director or the officer shall be punishable with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

(ii) If a director or an officer of the company has been convicted of an offence under this section, the director or the officer shall, on and from the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified from holding an office in any company.

 

What is Forms of, and procedure in relation to, certain applications? Section 201 of Indian Companies Act 2013

What is Compensation for loss of office of managing or whole-time director or manager? Section 202 of Indian Companies Act 2013

What is Appointment of key managerial personnel? Section 203 of Indian Companies Act 2013

What is Secretarial audit for bigger companies? What are the Functions of company secretary? Section 204 and 205 of Indian Companies Act 2013

What is Power to call for information, inspect books and conduct inquiries? What is power to Conduct of inspection and inquiry? Section 206 and 207 of Indian Companies Act 2013

What is Report on inspection made? What is Search and seizure? What is Investigation into affairs of company? Section 208,209 and 210 of Indian Companies Act 2013

What is Establishment of Serious Fraud Investigation Office? Section 211 of Indian Companies Act 2013

What is Investigation into affairs of Company by Serious Fraud Investigation Office? Section 212 of Indian Companies Act 2013

What is Investigation into company’s affairs in other cases? Section 213 of Indian Companies Act 2013

What is Security for payment of costs and expenses of investigation Firm, body corporate or association not to be appointed as inspector? Section 214 and 215 of Indian Companies Act 2013

What is Investigation of ownership of company? What is Procedure, powers, etc., of inspectors? Section 216 and 217 of Indian Companies Act 2013

What is Protection of employees during investigation? Section 218 of Indian Companies Act 2013

What is Power of inspector to conduct investigation into affairs of related companies, etc Seizure of documents by inspector? Section 219 and 220 of Indian Companies Act 2013

 

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