Section 223 of the Companies Act, 2013 ("the Act") requires the inspector to submit interim reports and a final report to the Central Government. The report is the foundation for the action that the Central Government may take against the company and its officers.
The Contents
The report must set out the inspector's findings on the affairs of the company, the evidence collected, and the conclusions reached. The report must be supported by the documents and the testimony recorded during the investigation. The inspector may also make recommendations for action.
The Consequences
If the report discloses an offence, the Central Government may prosecute the persons responsible. The report is admissible as evidence in the proceedings, and the court may presume that the statements in the report are true unless the contrary is proved. The report may also lead to the winding up of the company or to the recovery of damages.
The Challenge
The person aggrieved by the report can challenge the findings in the criminal proceedings or in a writ petition. The challenge is limited to the legality of the report and the procedure followed, not to the merits of the findings.
Call to Action
Anuj Desai & Associates advises companies and officers on the inspector's report—from the response to the interim report to the defence in the prosecution that follows. If you are named in an investigation report, we can help you respond.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
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