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Inspection by Registrar of Companies under section 206 of the Companies Act 2013.
Power to call for information and inspection of books are defined under Section 206 Companies Act 2013. Provisions laid down under this section are follows:
- In case the Registrar opines that further explanation or information or documents related to scrutiny of document which may be filed by company or on the basis of information received by the registrar himself , he can by issuing a written notice ask the company to:
- Provide in written such explanation and information or
- Provide such document in given time as specified in the notice.
(2) Once the notice is received as per sub-section (1) it becomes the responsibility of the officers concerned and the company to provide such explanation or information in detail as far as possible and ability to produce documents to the Registrar in the given time period which may be extended by the registrar in case:
Information to be furnished is in relation to previous period , and the officer who was in charge of the company for such previous period is called by the Registrar by issue of a written notice being served , will also have to provide such explanation or information in complete detail to the best of the person’s knowledge.
(3) If the information asked by Registrar as specified under sub section (1) is not provided within the given time frame or the Registrar opines after examining the documents provided that the explanation or information given is not adequate or the Registrar believes after scrutinizing the given documents that there are un satisfactory affairs going on in the company and such affairs are not made transparent , then the registrar may once again send a written notice to the company to furnish further account books, papers, and provide information at given time and place as specified in the notice :
In case where the Registrar records all such reasons in written to issue such a notice before sending a notice under this section.
(4) In case the Registrar is satisfied with the information provided to him or available with him or by a person from the company being present , that unlawful or fraudulent and are not in compliance with the Companies Act or if the company is not adhering to the grievances of the shareholders of the company , the Registrar can in this case inform the company regarding the allegations being raised against the company by a written notice and call the company to provide written explanation on the matter within the given time frame specified by the registrar and go ahead with an enquiry deemed fit by him after giving adequate time to the company to put their case forward:
If the central government is satisfied that the circumstances called for directs the inspector or registrar being appointed to carry out enquiry as per sub section:
Providedthe place where the fraud or unlawful practices have been carried out by the company, punishment shall be given to each officer of the company being involved in such unlawful practices as per section 447.
(5) The Central Government may without having any prejudice as per the section, is satisfied that the circumstances called for inspecting papers and books of the company directly through an appointed inspector for the purpose.
(6) With regards to circumstances by special or general order the Central Government may authorize a statutory authority to inspect the account books of the company or a group of companies.
Punishment for infringement of Section 206 of Companies Act 2013 concerning inspection and information of books
(7) Every Officer of the company who has made default and the company will be punished with a fine going up to Rs. 1 Lakh in case a company fails to provide any document or explanation or information or as per this section. If the company continues to fail to provide clarity, added fine will be levied up to Rs. 5 thousand per day after the first day of the failure being continued.