Companies Act Section 207 — Conduct of inspection and inquiry
CHAPTER XIV INSPECTION, INQUIRY AND INVESTIGATION
Commercial / Corporate
Summary
Sub-section (1) states that when a Registrar or inspector asks for a company's books of account and other documents under section 206, every director, officer, or other employee of the company must produce those documents. They must also provide any statements, information, or explanations in the form the Registrar or inspector requires, and must give all assistance in connection with the inspection.
Sub-section (2) allows the Registrar or inspector, while conducting an inspection or inquiry under section 206, to do either of two things. Under clause (a), they may make or arrange for copies of the books of account and other documents. Under clause (b), they may place or arrange for identification marks on such books to show that the inspection has been done.
Sub-section (3) gives the Registrar or inspector the same powers as a civil court under the Code of Civil Procedure, 1908, while trying a suit, regardless of what any other law or contract says. Under clause (a), this includes the power to order the discovery and production of books of account and other documents at a specified place and time. Under clause (b), it includes the power to summon people, enforce their attendance, and examine them on oath. Under clause (c), it includes the power to inspect any books, registers, and other documents of the company at any place.
Under clause (i) of sub-section (4), if any director or officer of the company disobeys a direction issued by the Registrar or inspector under this section, that person is punishable with imprisonment of up to one year and a fine of not less than twenty-five thousand rupees, which may extend to one lakh rupees. Under clause (ii) of sub-section (4), if a director or officer is convicted of an offence under this section, they are deemed to have vacated their office from the date of conviction, and upon such vacation, they are disqualified from holding an office in any company.
Official Text
(1) Where a Registrar or inspector calls for the books of account and other books and papers under section 206, it shall be the duty of every director, officer or other employee of the company to produce all such documents to the Registrar or inspector and furnish him with such statements, information or explanations in such form as the Registrar or inspector may require and shall render all assistance to the Registrar or inspector in connection with such inspection.
(2) The Registrar or inspector, making an inspection or inquiry under section 206 may, during the course of such inspection or inquiry, as the case may be,—
(a) make or cause to be made copies of books of account and other books and papers; or
(b) place or cause to be placed any marks of identification in such books in token of the inspection having been made.
(3) Notwithstanding anything contained in any other law for the time being in force or in any contract to the contrary, the Registrar or inspector making an inspection or inquiry shall have all the powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the following matters, namely:—
(a) the discovery and production of books of account and other documents, at such place and time as may be specified by such Registrar or inspector making the inspection or inquiry;
(b) summoning and enforcing the attendance of persons and examining them on oath; and
(c) inspection of any books, registers and other documents of the company at any place.
(4)
(i) If any director or officer of the company disobeys the direction issued by the Registrar or the inspector under this section, the director or the officer shall be punishable with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.
(ii) If a director or an officer of the company has been convicted of an offence under this section, the director or the officer shall, on and from the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified from holding an office in any company.