Inspection and Investigation

Question 1

Provision of search and seizure

Answer 1

• Inspector/ registrar
• reasonable grounds to believe
• records relating to affairs of the company
• may be (DAMS IF) Damaged, Altered, Mutilated, Secreted , Falsified
• Make application to special court
• For seizure upto 180 days
• further 180 days upon order in writing

Question 2

Protection available for an employee who has disclosed info during investigation, permission needed and appeal available

Answer 2

-During investigation and pendency of proceedings
an employee is protected against
- discharge / suspension
- dismissal , removal, reduction in rank
-change in terms of employment to disadvantage
-Prior permission of NCLT needed
- if the NCLT doesnt respond within 30 days , then the company can proceed
- Appeal : company/ employee can within 30 days of receipt of notice of objection file to appellate tribunal whose order is final and binding

Question 3

When will the tribunal take cognizance of an offence and issue order to investigate

Answer 3

• in case of company with SC- application made by 100 or more members or members holding 1/10th of total voting power
• in case of company with no share capital - application made by not lees than 1/5 th of company’s members as per register

along with evidence for showing applicants have good reason

-application made by any other person or suo moto under spl. circumstances

Question 4

What are the circumstances under which the tribunal can take cognizance of an offence and order investigation suo moto or by an application made by any other person

Answer 4

• business is conducted/ company was formed /persons concerned in formation or mgmt
• unlawful , fraudulent purpose
• defraud members, creditors or any other person
• oppressive to members
• members have not been give info of the company which they might reasonably expect including managerial commission /remuneration details

Question 5

Provisions regarding expenses of investigation ordered by CG under section 210 or by the order of tribunal under 213

Answer 5

• the applicant to give such security not exceeding 25,000 rupees
• Such security shall be refunded to the applicant if the investigation results in prosecution.

Question 6

when will the CG order an investigation(4) and is it mandatory or discretionary

Answer 6

• Discretionary
  CG may order investigation
  -Suo moto in public interest
  -spl resolution passed by the company
  -report of registrar/inspector under section 208
  -if tribunal or court has passed an order to investigate

Question 7

SFIO - when will CG order investigation by SFIO

Answer 7

CG may order investigation

• Suo moto in public interest
• spl resolution passed by the company
• report of registrar/inspector under section 208
• ON REQUEST FROM ANY DEPARTMENT OF CG OR SG

Question 8

Provisions regarding arrest by SFIO officers

Answer 8

• officers of SFIO may arrest the guilty person if has reason to believe
• inform him of the grounds for such arrest.
• Every person arrested shall within 24 hours be taken to Judicial Magistrate or Metropolitan Magistrate having jurisdiction