• Arpita Maharana

Sec-217 Procedure,power,etc.,of inspectors

Updated: Oct 4

#companieslaw #powerofinspector #sec217 #procedure #power #inspector #investgationbyinspector


Procedure, powers, etc., of inspectors.

This section will deal with the procedure to be followed and power of the inspector allotted for enquiry u/s-219.

This article states the bare provision and then explains that in a version that is easy to understand. With every ascending paragraph the bare provision is stated first and then the explanation of that relevant provision is stated towards the end of every pointer. This article aims at making legal jargons easy to understand for every person who reads it.In order to understand the entire section it suggested to follow it till the end .

Quoting the bare provision

(1) It shall be the duty of all officers and other employees and agents including the former officers, employees and agents of a company which is under investigation in accordance with the provisions contained in this Chapter, and where the affairs of any other body corporate or a person are investigated under section 219, of all officers and other employees and agents including former officers, employees and agents of such body corporate or a person—

(a) to preserve and to produce to an inspector or any person authorised by him in this behalf all books and papers of, or relating to, the company or, as the case may be, relating to the other body corporate or the person, which are in their custody or power; and

(b) otherwise to give to the inspector all assistance in connection with the investigation which they are reasonably able to give.

Explanation :-This pointer makes it mandatory for all the officers, employees ,agents and even former officers ,employees and agents of the company which is under investigation to

  1. to help and provide with all the papers and books of the company’s which will facilitate the information required regarding the investigation.

  2. And to give every possible assistance to the inspector or the agent reasonably possible

(2) The inspector may require any body corporate, other than a body corporate referred to in sub-section (1), to furnish such information to, or produce such books and papers before him or any person authorised by him in this behalf as he may consider necessary, if the furnishing of such information or the production of such books and papers is relevant or necessary for the purposes of his investigation.

Explanation:-The inspector may also require production of any person or any books other than the one stated in previous sub section, in order to furnish information for investigation then that person should be produced before the inspector to facilitate investigation.

(3) The inspector shall not keep in his custody any books and papers produced under sub-section (1) or sub-section (2) for more than one hundred and eighty days and return the same to the company, body corporate, firm or individual by whom or on whose behalf the books and papers were produced:

Provided that the books and papers may be called for by the inspector if they are needed again for a further period of one hundred and eighty days by an order in writing.

Explanation:-The inspector cannot keep any books or papers provided to him in above 2 subsections for a period of not more than 180 days. They shall be returned to the respected person who provided them,but they can be asked to produce again if needed for a period of 180 days again by an authorised order in writing.

(4) An inspector may examine on oath—

(a) any of the persons referred to in sub-section (1); and

(b) with the prior approval of the Central Government, any other person,

in relation to the affairs of the company, or other body corporate or person, as the case may be, and for that purpose may require any of those persons to appear before him personally:

Provided that in case of an investigation under section 212, the prior approval of Director, Serious Fraud Investigation Office shall be sufficient under clause (b).

Explanation:- The inspector has right to examine under oath to following person:-

a)any officers, employees ,agents and even former officers ,employees and agents of the company which is under investigation as mentioned in sub section 1.

b)any other person who is in any way related to the company by an approval from the central government , shall be produced in person to investigation officer.

In case of investigation u/s 212 approval of director and serious fraud investigation officer will also suffice.

(5) Notwithstanding anything contained in any other law for the time being in force or in any contract to the contrary, the inspector, being an officer of the Central Government, making an investigation under this Chapter 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 person;

(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.

Explanation:- The police officer will have all the powers vested in civil court under criminal procedures while trying a suit, keeping aside whatsoever is mentioned in any other law or contract in following matters:-