Rule 2, 3, 4, 5, 6, 7, 8 & 9 of Companies (Arrests in connection with Investigation by SFIO) Rules.
Updated: Oct 4, 2022
Section 212 of CA, 2013- Investigation into affairs of company by Serious Fraud Investigation Office is covered by Rules 2, 3, 4, 5, 6, 7, and 8 of the Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017.
The following two clauses are included in Rule 2 of this Act:-
(1) When the Director, Additional Director, or Assistant Director of the Serious Fraud Investigation office (hereinafter referred to as SFIO) is looking into the business dealings of a company other than a Government company or a foreign company and has reason to believe—the reason for such belief must be documented in writing—that any person has committed an offence punishable under section 2L2 of the Act, he or she may be arrested.
As long as the Director SFIO receives prior written approval before any arrest is made by an Additional Director or Assistant Director.
(2) For all decisions involving arrest, the Director SFIO shall be the responsible authority.
Rule 3 states that any arrest that is to be made in relation to a Government corporation or a foreign company that is the subject of an investigation must first receive the Central Government's prior written consent. If the person detained is the Managing Director or person in charge of the Government Company, the arresting officer must additionally notify the Secretary of the administrative ministry responsible for the arrest as well as the Managing Director or person in charge of the Government Company's activities.
Rule 4 furthermore states that when exercising authority under subsection (8) of Section 212 of the Act, the Director, Additional Director, or Assistant Director shall sign the arrest order and personal search memo in the Form attached to these rules, serve it on the arrestee, and obtain a written acknowledgement of service.
According to Rule 5, "The Director, Additional Director or Assistant Director shall forward a copy of the arrest order together with the material in his possession and all other documents including personal search memo to the office of Director, SFIO in a sealed envelope with a forwarding letter after signing on each page of these documents, so as to reach the office of the Director, SFIO within twenty-four hours through the quickest means."
According to Rule 6, an arrest register must be kept in the Director's office of the SFIO. The Director, or any officer designated by the Director, must see to it that entries are made in the arrest register for each arrest made by the arresting officers, including the details of the arrestee, the date and time of the arrest, and other pertinent information.
The entry indicating the arrest of the person and the information provided to that person must be made in the arrest register, which is kept by the SFIO office, as soon as the documents required by Rule 5 are received.
The following two clauses are mentioned in Rule 8:-
The office of the Director, SFIO shall preserve the copy of the arrest order along with supporting materials for a period of five years either
a) from the date of the judgement or final order of the Trial Court, in cases where the said judgement has not been appealed; or
b) from the date of the final appellate court's disposition of the matter, in cases where the said judgement or final order has been appealed, which is when the matter was resolved.
Rule 9 mentions that The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to arrest shall be applied mutatis mutandis to every arrest made under this Act.