Section 219 of the Companies Act, 2013 ("the Act") empowers the inspectors and the SFIO to arrest a person where they have reason to believe that the person is guilty of an offence under the Act. The arrest power is extraordinary, and it is subject to the safeguards in the Constitution and the Code of Criminal Procedure.
The Grounds
The arrest can be made where the inspector has reason to believe that the person has committed an offence under the Act. The belief must be based on objective material, and the person must be informed of the grounds of arrest.
The Safeguards
The person arrested must be produced before a magistrate within twenty-four hours, and the person has the right to consult a lawyer. The arrest must be reported to the Central Government, and the person can apply for bail. The arrest cannot be used to harass the person or to extract a confession.
The Judicial Scrutiny
The courts have held that the arrest power is subject to judicial review, and an arrest that is not based on reasonable grounds can be quashed. The person arrested can challenge the arrest in a writ petition or in the criminal proceedings.
The arrest power is a serious tool, and it is reserved for cases where the person is likely to abscond or tamper with the evidence. The company and its officers should obtain legal advice immediately if an arrest is threatened.
Call to Action
Anuj Desai & Associates advises companies and officers on arrest under Section 219—from the challenge to the arrest and the bail application to the defence in the criminal proceedings. If you or your officer has been arrested, we can help you act quickly.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
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