MISCELLANEOUS SECTIONS OF INSPECTION, INQUIRY, AND INVESTIGATION
EXPENSES OF INVESTIGATION [SECTION 225]:
Section 225 of the Companies Act, 2013 lays down the following provisions in respect of expenses of investigation:
(i) Reimbursement of expenses: The expenses of, and incidental to, an investigation by an inspector appointed by the Central Government under this Chapter (Chapter XIV- Inspection, Inquiry and Investigation) other than expenses of inspection under section 214 (Security for payment of costs and expenses of investigation) shall be defrayed in the first instance by the Central Government, but shall be reimbursed by the following persons to the extent mentioned below, namely:—
- any person who is convicted on a prosecution instituted, or
- who is ordered to pay damages, or
- restore any property in proceedings brought
Extent of reimbursement: Reimbursement to the extent that he may in the same proceedings be ordered to pay the said expenses as may be specified by the court convicting such person, or ordering him to pay such damages or restore such property, as the case may be;
Any company or body corporate in whose name proceedings are brought, to the extent of the amount or value of any sums or property recovered by it as a result of such proceedings;
Where a prosecution is instituted: unless, as a result of the investigation, a prosecution is instituted under section 224 ,—
(1) any company, body corporate, managing director or manager dealt with by the report of the inspector; and
(2) the applicants for the investigation, where the inspector was appointed under section 213, to such extent as the Central Government may direct.
(ii) Extent of liability: Any amount for which a company or body corporate is liable, shall be a first charge on the sums or property mentioned in that clause.
VOLUNTARY WINDING UP OF COMPANY, NOT TO STOP INVESTIGATION PROCEEDINGS [SECTION 226]:
Section 226 of the Companies Act, 2013 provides that an investigation under this Chapter may be initiated notwithstanding, and no such investigation shall be stopped or suspended by reason only of, the fact that-
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an application has been made under section 241 (Application to Tribunal for relief in cases of oppression, etc.);
2.
the company has passed a special resolution for voluntary winding up; or
3.
any other proceeding for the winding up of the company is pending before the Tribunal.
Where a winding up order is passed by the Tribunal in a proceeding referred to in clause (c), the inspector shall inform the Tribunal about the pendency of the investigation proceedings before him and the Tribunal shall pass such order as it may deem fit.
Nothing in the winding up order shall absolve any director or other employee of the company from participating in the proceedings before the inspector or any liability as a result of the finding by the inspector.
LEGAL ADVISORS AND BANKERS NOT TO DISCLOSE CERTAIN INFORMATION [SECTION 227]:
Section 227 of the Companies Act, 2013 provides for non-disclosure of certain information by certain persons.
Nothing in this Chapter shall require the disclosure to the Tribunal or to the Central Government or to the Registrar or to an inspector appointed by the Central Government-
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by a legal adviser, of any privileged communication made to him in that capacity, except as respects the name and address of his client; or
2.
by the bankers of any company, body corporate, or other person, of any information as to the affairs of any of their customers, other than such company, body corporate, or person.
PENALTY FOR FURNISHING FALSE STATEMENT, MUTILATION, DESTRUCTION OF DOCUMENTS [SECTION 229]:
Section 229 of the Companies Act, 2013 lays down the following penalty for furnishing false statement, mutilation, destruction of documents:
Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation, shall be punishable for fraud in the manner as provided in section 447, if he-
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destroys, mutilates or falsifies, or conceals tampers or unauthorizedly removes, or is a party to the destruction, mutilation or falsification or concealment or tampering or unauthorized removal of, documents relating to the property, assets or affairs of the company or the body corporate;
2.
makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or
3.
provides an explanation which is false or which he knows to be false,
