C OMPANIES ACT,2013 CA. Arun Saxena Saxena & Saxena Chartered Accountants 811, Ansal Bhawan 16, Kasturba Gandhi Marg, New Delhi – Mob.:

INSPECTION, ENQUIRY AND INVESTIGATION

Enquiry / Inspection (Section 206/207)  Based on scrutiny of Balance Sheet or any information received by him.  ROC has power  To call for information  To inspect the books of accounts and papers  Duty of the company and the officers to provide the same.  Information from ex-employee / officer of the company. 3 SAXENA & SAXENA

Enquiry / Inspection (Section 206/207)  Central Government can also direct ROC to make enquiries.  Central Government may also direct the inspection of books of accounts and papers of the company.  Central Government may direct any statutory audit authority to carry out the inspection of the books of accounts.  In case of default company and every officer of the company is punishable with fine upto Rs.1.00 lac and Rs.500/- per day if default continues. 4 SAXENA & SAXENA

Enquiry / Inspection (Section 206/207)  Inspector or ROC may get the copies of the books of accounts produced before them.  Can place marks of identification in such books of accounts. 5 SAXENA & SAXENA

Power of the ROC / Inspector  All powers as are vested as in Civil Court under CPC namely:-  Discovery on production of books of account and other documents.  Summoning and enforcing the attendance of the persons and examining them on oath.  Inspection of books and registers and other documents of company at any place. 6 SAXENA & SAXENA

Penalty for non-compliance of section 207 (Inspection)  In case any director contravenes any above said provision he shall be deemed to vacate his office and shall be dis- qualified for holding office in any company.  Penalty for disobeying any order of ROC every oficer shall be punishable of imprisonment upto one year and fine of Rs.25,000 to Rs,1,00,000/-. Report on Inspection  The report of the Registrar or inspector may include the recommendation of further investigation. 7 SAXENA & SAXENA

Search and Seizure by Inspector  In case the registrar or inspector has reasons to believe that books and papers related to the company, KMP’s, Director, Company Secretary in practice are likely to be destroyed, altered, falsified, he may :-  Obtain the order from Special Court for seizure of books and papers.  Can enter the place or place where such books and papers are kept.  seize such books and papers for 180 days.  Further take order for period of 180 days.  ROC can take copies of all the records seized by him before returning to the company. 8 SAXENA & SAXENA

Investigation  Central Government  SFIO.  Tribunal 9 SAXENA & SAXENA

Investigation by Central Government  On receipt of the report from ROC or inspector  On intimation of Special resolution passed by company  In public interest.  On the direction of the Tribunal  Investigation of ownership of company 10 SAXENA & SAXENA

Investigation by SFIO (Section 212)  Central Government may refer any matter for investigation into the affairs of the company to SFIO where it has opinion on the basis of :  Receipt of the report of Registrar or Inspector.  Intimation from company regarding special resolution passed with effect in public interest.  Request from any Central or State Government Department.  In the public interest.  Where any case assigned to SFIO no other Tribunal, Central or State Government shall proceed with investigation in that matter.  Central / State Government / Income Tax Authorities shall provide required information / record to SFIO. 11 SAXENA & SAXENA

Constitution of the Investigation team by SFIO 1) Company and its officer shall provide all the assistance to the investigating team for the investigation. 2) The SFIO has power to arrest officers and such person shall not be released on bail or his own bond unless public prosecutor has given opportunity to oppose the same. 3) Before taking such person into custody SFIO shall intimate him ground for such arrest and SFIO shall produce such person within 24 hours to the Judicial Magistrate or Metropolitan Magistrate as the case may be. 12 SAXENA & SAXENA

Investigation by SFIO 4) Special court shall take cognize of offence only if complaint is filed by Director SFIO or any officer of Central Government. 5) SFIO shall file interim and final report. 6) On receipt of the SFIO report Central Government may direct for the prosecution against the company’s officers. 13 SAXENA & SAXENA

Investigation by Tribunal Eligibility:  Not less than 100 members or 1/10 th of total voting power or  Not less than 1/5 th of total numbers (company not having share capital)  Tribunal may order for the investigation in the affair of the company only in following circumstances :-  The business is being conducted with intend to defraud.  The person connected with incorporation of the company are guilty for fraud or Misfiseance 14 SAXENA & SAXENA

Investigation by Tribunal  Members of the company have not given all the information with respect to its affairs. Penalties:-  If on investigation it is proved that business is conducted to intend the defraud, the person involved in the formation of the company guilty of fraud, the officers shall be punishable u/s SAXENA & SAXENA

Power of the Investigator  Powers of the investigator to conduct investigation to the affairs of the related companies:  Any body corporate which has or has been at any relevant time company’s subsidiary company, holding company or the subsidiary company of the holding company.  Any body corporate which is managed by any person as Managing Director or Manager of the company. Or  Body corporate whose Board of Directors comprises nominees of the company or  Body corporate whose Board of Directors are accustomed of act according to the directions of the company or its directors. 16 SAXENA & SAXENA

Power of the Investigator  Any person who is at any time the Managing Director or employee of the company.  The prior approval of the Central Government is necessary to initiate the investigation of related company. 17 SAXENA & SAXENA

Seizure of documents by Investigator  Make search of place where books of account / record placed.  Seize the documents for not later than the conclusion of the inspection. 18 SAXENA & SAXENA

Freezing of assets of the company  To the Tribunal has power to pass any order to stay on transfer, removal, disposal or any assets of the company.  Punishment in contravention Rs.1.00 lac to Rs lacs and officers shall be punishable with the imprisonment which may extend to 3 years and fine Rs.50,000/- to Rs.5.00 lacs. 19 SAXENA & SAXENA

SPECIAL COURTS (Section 435) The Central Government may for the purpose of drafting speedy trial of offences under this act by intervention establish or designate as many as special courts as may be necessary. The Special Court shall consist of single judge appointed by Central Government with concurrence of Chief Justice of High Court within the jurisdiction the judge be appointed as working. Before the appointment the person appointed as judge should be holding office of session judge or additional session judge. SAXENA & SAXENA 20

THANK YOU 21 SAXENA & SAXENA