Section 207- Conduct of inspection and inquiry.
Updated: May 9
1. A registrar or inspector can call for books, documents, or register under section 206 of the act. Every director or member or employee present at that time must produce necessary documents and information for inspection.
2. The registrar or inspector during inspection can:
make copies of such documents or information for records or mark; or
get it marked the documents as a record to show inspection had been done.
3. The registrar and inspector shall have the following powers:
Discovering and producing any documents and information during the time of inspection.
Examining the officer on oath by summoning them.
Inspect any documents within the premises of the company.
4. If any director or member or employee of the company doesn’t follow the instructions of the inspector or registrar during inspection s/he shall be punished with imprisonment up to one year and a fine between Rs. 25,000 to Rs. 1,00,000. Such a director or officer who is convicted of an offense under this section should vacate the office immediately and is not allowed to hold any office in any company.
Section 207 of 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 another 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 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 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.
(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 a 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 offense 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 any office in any company.