Section 220 of the Companies Act, 2013 ("the Act") empowers an inspector to seize books and papers where there are reasonable grounds to believe that they are likely to be destroyed, mutilated, altered, falsified, or secreted. The power is exceptional, and it is subject to safeguards.
The Grounds
The inspector must have reasonable grounds to believe that the books and papers are likely to be destroyed or tampered with. The belief must be based on objective material, not on mere suspicion. The inspector must record the reasons for the seizure.
The Procedure
The inspector may enter the premises where the books and papers are kept, seize them, and take extracts or copies. The inspector must keep the seized documents in custody for a period not later than the conclusion of the investigation, and thereafter return them to the company or the person from whom they were seized.
The Safeguards
The seizure must be reported to the Central Government, and the person from whom the documents are seized must be given a receipt. The inspector cannot retain the documents beyond the period necessary for the investigation. The person affected by the seizure can apply to the court for the return of the documents.
The seizure power is designed to preserve evidence, not to harass the company. An inspector who seizes documents without reasonable grounds may be liable for misconduct.
Call to Action
Anuj Desai & Associates advises companies and officers on document seizures—from the challenge to the seizure and the application for the return of documents to the defence against allegations of destruction. If your documents have been seized, we can help you protect your rights.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
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