SECTION 225 EXPENSES OF INVESTIGATION
Updated: Oct 7, 2022
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01. The Central Government shall initially cover the costs of and incidentals to an investigation by an inspector appointed by it under this Chapter, other than the costs of an inspection under section 214[1], but the following parties shall reimburse the Central Government to the extent specified below, namely:
Any person who is found guilty following the filing of prosecution or who is ordered to make restitution of damages or property in proceedings brought under Section 224[2], to the extent that he may be required to make restitution of said expenses in the same proceedings, as determined by the court that found him guilty or who ordered him to make restitution of such damages or property, as applicable;
Any company (denotes a business that was founded by this Act or previous company legislation)[3] or body corporate (including an organisation formed outside of India, but excludes the following: cooperative societies registered under any law governing cooperative societies, and any other corporate organisation that the Central Government may specify in this regard by notification and that is not a company as specified in this Act)[4] in whose name the aforementioned procedures are instituted, up to the amount or value of any money or property that is ultimately obtained by the entity as a result of the proceedings;
Unless a prosecution is started under Section 224 as a result of the investigation,
Any business, corporation, managing director (means a director who has been given significant management authority over the company's affairs by the articles of incorporation, a contract with the company, a resolution adopted at the company's general meeting, or a decision made by its board of directors. This includes any director holding the title of managing director, regardless of their name. Explanation: For this clause, the Board's authority to perform routine administrative acts, such as the right to affix the company's common seal to documents, to draw and endorse checks drawn on the company's account in any bank, to draw and endorse negotiable instruments, to sign share certificates, or to direct the registration of the transfer of any share, is not considered to be part of the substantiating authority), or manager (includes a director or any other person holding the title of manager, by whatever name called, whether under a contract of service or not, and who has the management of the entirety, or substantially the entirety, of a company's affairs under the supervision, control, and direction of the Board of Directors) covered by the inspector's report; and
The applicants for the investigation in cases where the inspector was appointed by section 213[5] to the extent that the Central Government may specify,
02. Any sum that a corporation or body corporate is obligated to pay under subsection (1) clause (b) shall be a first charge on the money or property stated in that clause.
[1] Companies Act 2013 (Section 214)- https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf [2] Companies Act 2013 (Section 224)- https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf [3] Companies Act 2013 (Section 2 (20))- https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf [4] Companies Act 2013 (Section 2 (11))- https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf [5] Companies Act 2013 (Section 213)- https://www.mca.gov.in/content/dam/mca/pdf/CompaniesAct2013.pdf