Sections 223 and 224 of Companies Act 2013: Inspector's Report and Actions After Investigation
Sections 223 and 224 form part of Chapter XIV of the Companies Act, 2013, dealing with inspection, inquiry and investigation. Section 223 governs the inspector's interim and final reports, access to copies, authentication and evidentiary use. Section 224 sets out the actions that the Central Government may take on the basis of an inspector's report, including prosecution, proceedings before the Tribunal, recovery-related proceedings and disgorgement in fraud cases.
Section 223 - Inspector's Report
Section 223 applies to reports of inspectors appointed under Chapter XIV, subject to the express exclusion in sub-section (5) for a report referred to in Section 212, which deals with investigation by the Serious Fraud Investigation Office.
Meaning and effect of Section 223
An inspector may submit interim reports and must submit a final report when the investigation concludes. If the Central Government directs submission of an interim report, the inspector is required to comply. The report must be in the form directed by the Central Government.
Following the 2018 amendment, members, creditors and any other person whose interest is likely to be affected may apply to the Central Government for a copy of the report. The provision also prescribes authentication of the report and states that an authenticated report is admissible in legal proceedings as evidence in relation to matters contained in it.
Section 223 - Provision
(1) An inspector appointed under this Chapter may, and if so directed by the Central Government shall, submit interim reports to that Government, and on the conclusion of the investigation, shall submit a final report to the Central Government.
(2) Every report made under sub-section (1) shall be in writing or printed as the Central Government may direct.
(3) A copy of the report made under sub-section (1) may be obtained by members, creditors or any other person whose interest is likely to be affected by making an application in this regard to the Central Government.
(4) The report of any inspector appointed under this Chapter shall be authenticated either -
(a) by the seal, if any, of the company whose affairs have been investigated; or
(b) by a certificate of a public officer having the custody of the report, as provided under section 76 of the Indian Evidence Act, 1872 (1 of 1872), and such report shall be admissible in any legal proceeding as evidence in relation to any matter contained in the report.
(5) Nothing in this section shall apply to the report referred to in section 212.
Amendment notes: The words "by the seal, if any" were substituted with effect from 29 May 2015. The words identifying members, creditors and other persons whose interests are likely to be affected were inserted with effect from 9 February 2018.
Section 224 - Actions to Be Taken in Pursuance of Inspector's Report
Section 224 empowers the Central Government to act on findings emerging from an inspector's report under Section 223. The available action depends on what the report discloses.
1. Prosecution for an offence
If the report indicates that a person has committed an offence for which that person is criminally liable in relation to the investigated affairs, the Central Government may prosecute that person. Officers and employees of the relevant company or body corporate must provide the necessary assistance in connection with the prosecution.
2. Winding up and application under Section 241
Where the statutory conditions in Section 224(2) are met, the Central Government may cause an authorised person to present to the Tribunal a petition for winding up on the just and equitable ground, an application under Section 241 concerning oppression and mismanagement, or both. Section 224(2) also refers to liability to be wound up under the Insolvency and Bankruptcy Code, 2016.
3. Public-interest proceedings for damages or property
Where the report indicates that proceedings should be brought in the public interest for recovery of damages arising from fraud, misfeasance or other misconduct, or for recovery of property that has been misapplied or wrongfully retained, Section 224(3) authorises the Central Government to bring the proceedings in the name of the company or body corporate. The published statutory text should be consulted for the exact wording.
4. Costs and indemnity
Under Section 224(4), the company or body corporate must indemnify the Central Government against costs or expenses incurred in proceedings brought under sub-section (3).
5. Disgorgement where fraud produces undue benefit
Section 224(5) addresses a report stating that fraud has taken place and that a director, key managerial personnel, another officer, person or entity obtained an undue advantage or benefit. The Central Government may apply to the Tribunal for appropriate disgorgement orders and for personal liability without limitation of liability.
Section 224 - Provision
(1) If, from an inspector's report made under section 223, it appears to the Central Government that any person has, in relation to the company or in relation to any other body corporate or other person whose affairs have been investigated under this Chapter, been guilty of any offence for which he is criminally liable, the Central Government may prosecute such person for the offence and it shall be the duty of all officers and other employees of the company or body corporate to give the Central Government the necessary assistance in connection with the prosecution.
(2) If any company or other body corporate is liable to be wound up under this Act or under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), and it appears to the Central Government from any such report made under section 223 that it is expedient so to do by reason of any such circumstances as are referred to in section 213, the Central Government may, unless the company or body corporate is already being wound up by the Tribunal, cause to be presented to the Tribunal by any person authorised by the Central Government in this behalf -
(a) a petition for the winding up of the company or body corporate on the ground that it is just and equitable that it should be wound up;
(b) an application under section 241; or
(c) both.
(3) If from any such report as aforesaid, it appears to the Central Government that proceedings ought, in the public interest, to be brought by the company or any body corporate whose affairs have been investigated under this Chapter -
(a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such company or body corporate; or
(b) for the recovery of any property of such company or body corporate which has been misapplied or wrongfully retained, the Central Government may itself bring proceedings for winding up in the name of such company or body corporate.
(4) The Central Government shall be indemnified by such company or body corporate against any costs or expenses incurred by it in, or in connection with, any proceedings brought by virtue of sub-section (3).
(5) Where the report made by an inspector states that fraud has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property or cash, as the case may be, and also for holding such director, key managerial personnel, officer or other person liable personally without any limitation of liability.
Amendment note: The reference in Section 224(2) to the Insolvency and Bankruptcy Code, 2016 was inserted with effect from 15 November 2016.
How Sections 223 and 224 Work Together
Section 223 is primarily concerned with the inspector's reporting stage: interim reports, the final report, access to a copy, authentication and evidentiary use. Section 224 is the consequential-action provision. It enables the Central Government, depending on the contents of the report and the statutory conditions, to move from investigation to prosecution, Tribunal proceedings, recovery-related proceedings or disgorgement.
Related Provisions
These sections should be read with other provisions in Chapter XIV, particularly Sections 221 and 222 on freezing of assets and restrictions upon securities, Sections 225 and 226 on investigation expenses and continuation of investigation, and the provisions governing investigation under Sections 210 to 219.
Official Sources
For statutory verification and subsequent amendments, refer to the Companies Act, 2013 published by the Ministry of Corporate Affairs, the Ministry of Corporate Affairs portal, and India Code.
Updated: 17 September 2026. This page is a general legal information resource. The official statutory text, notifications and amendments should be checked for a matter requiring legal advice or filing.