Section 223: inspector’s report

Introduction

The section commenced on 1 April 2014 under S.O. 902(E). It has been amended twice. The Companies (Amendment) Act, 2015 changed "by the seal" in sub-section (4)(a) to "by the seal, if any," from 29 May 2015 (S.O. 1440(E)). The Companies (Amendment) Act, 2017 named the persons who may obtain a copy of the report in sub-section (3) from 9 February 2018 (S.O. 630(E)).

Sub-section (5) excludes the report referred to in section 212, which concerns investigations by the Serious Fraud Investigation Office.

Key takeaways

Reports to the Central Government

Under sub-section (1), an inspector appointed under Chapter XIV may submit interim reports to the Central Government, and must do so if that Government directs. On concluding the investigation, the inspector must submit a final report. Sub-section (2) says every report is to be in writing or printed, as the Central Government directs.

• India Code — consolidated Companies Act, 2013, section 223
• eGazette — Companies (Amendment) Act, 2015 (No. 21 of 2015)
• eGazette — MCA notification S.O. 1440(E) (2015 Amendment Act in force 29 May 2015)
• eGazette — Companies (Amendment) Act, 2017 (No. 1 of 2018)
• eGazette — MCA notification S.O. 630(E) (2017 Amendment Act provisions in force 9 February 2018)
• eGazette — MCA notification S.O. 902(E), 26 March 2014 (commencement from 1 April 2014)

Copy of the report

Sub-section (3) allows a copy of the report to be obtained by members, creditors or any other person whose interest is likely to be affected, by applying to the Central Government. The words naming these persons were inserted by the Companies (Amendment) Act, 2017, s. 72, in force from 9 February 2018.

Authentication and use as evidence

Under sub-section (4), the report is authenticated either by the seal, if any, of the company whose affairs were investigated, or by a certificate of a public officer having custody of the report, as provided under section 76 of the Indian Evidence Act, 1872. The words "if any" were added by the Companies (Amendment) Act, 2015, s. 18, which reflects that a company need not have a common seal.

An authenticated report is admissible in any legal proceeding as evidence in relation to any matter contained in it. Sub-section (5) provides that nothing in section 223 applies to the report referred to in section 212.

Practical preparation

If your company is under investigation, keep a record of every document and explanation given to the inspector; if you are a member or creditor affected by the findings, apply to the Central Government for a copy; when relying on a report in proceedings, make sure it is authenticated in one of the two ways in sub-section (4).

Procedure, forms, fees and timelines for applications under this provision are set out in rules made under the Act and in the Tribunal’s procedure; check the current text of those rules, and any exemption notification for your class of company, before relying on this guide.

Practical checklist

Glossary

Inspector

A person appointed by the Central Government under Chapter XIV to investigate the affairs of a company.

Interim report

A report submitted before the investigation concludes.

Section 76 certificate

A certified copy of a public document given by the public officer who has custody of it, under the Indian Evidence Act, 1872.

Frequently asked questions