POINT

EXPLANATION

1. Submission of interim report and final report [Sub section (1)]:

An inspector appointed under this Chapter (Chapter XIV- Inspection, Inquiry and Investigation) may, and if so directed by the Central Government shall, submit interim reports to that Government, and on the conclusion of the investigation, shall submit a final report to the Central Government.
 

2. Report to be in writing or printed [Sub section (2)]:

Every report made under sub section (1) above, shall be in writing or printed as the Central Government may direct.
 

3. Obtaining copy or report [Sub section (3)]:

A copy of the above report may be obtained by
members, creditors or any other person whose interest is likely to be affected by making an application in this regard to the Central Government.
 

4. Authentication of report [Sub section (4)]:

The report of any inspector appointed under this Chapter shall be authenticated either—

(a) by the seal, if any, of the company whose affairs have been investigated; or

(b) by a certificate of a public officer having the custody of the report, as provided under section 76 of the Indian Evidence Act, 1872,

and such report shall be admissible in any legal proceeding as evidence in relation to any matter contained in the report.

5. Exceptions [Sub section (5)]:

Nothing in this section shall apply to the report referred to in section 212 of the Companies Act, 2013.
 

POINT

EXPLANATION

1. On basis of report, if person appears to be guilty of offence:

If, from an inspector's report, made under section 223, it appears to the Central Government that any person has, in relation to the company or in relation to any other body corporate or other person whose affairs have been investigated under this Chapter been guilty of any offence for which he is criminally liable, the Central Government may prosecute such person for the offence and it shall be the duty of all officers and other employees of the company or body corporate to give the Central Government the necessary assistance in connection with the prosecution [Sub section (1)].

2. Filing of petition by person authorized by the Central Government:

As per sub-section (2), if any company or other body corporate is liable to be wound up under this Act or under the Insolvency and Bankruptcy Code, 2016 and it appears to the Central Government from any such report made under section 223 that it is expedient so to do by reason of any such circumstances as are referred to in section 213, the Central Government may, unless the company or body corporate is already being wound up by the Tribunal, cause to be presented to the Tribunal by any person authorized by the Central Government in this behalf—
(a) a petition for the winding up of the company or body corporate on the ground that it is just and equitable that it should be wound up;
(b) an application under section 241; or
(c) both.

3. Initiation of winding up proceeding suo moto by the Central Government:

As per sub- section (3), if from any such report as aforesaid, it appears to the Central Government that
proceedings ought, in the public interest, to be brought by the company or any body corporate whose affairs have been investigated under this Chapter—

(a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such company or body corporate; or

(b) for the recovery of any property of such company or body corporate which has been misapplied or wrongfully retained,

the Central Government may itself bring proceedings for winding up in the name of such company or body corporate.

4. Indemnification to the Central Government:

The Central Government, shall be indemnified by such company or body corporate against any costs or expenses incurred by it in, or in connection with, any proceedings brought by virtue of sub-section (3) [Sub section (4)].

5. Where fraud has been committed:

Where the report made by an inspector states that fraud
has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity, has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central
Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property or cash as the case maybe, and also for holding such director, key managerial personnel, officer or other person liable personally without any limitation of liability.