Amended and updated notes on section 221 of Companies Act 2013. Detail discussion on provisions and rules related to freezing of assets of company on inquiry and investigation.
Chapter XIV (Sections 206–229) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Inspection, Inquiry and Investigation. Section 221 of CA 2013 provides for freezing of assets of company on inquiry and investigation.
Recently, we have discussed in detail section 220 (Seizure of documents by inspector) of CA 2013. Today, we learn the provisions of section 221 of Companies Act 2013.
The provisions of section 221 are effective from 1-June-2016. You may refer Notification No. S.O. 1934(E) issued dated 01-06-2016. In this article, you will learn detail of the provisions of section 221 of the Companies Act 2013.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XIV |
| Chapter Name | Inspection, Inquiry and Investigation |
| Section No. | 221 |
| Section Name | Freezing of assets of company on inquiry and investigation |
| Monthly Updated Edition | Company Law PDF |
Section 221 of Companies Act 2013: Freezing of assets of company on inquiry and investigation
Section 221 shall come into force on 1st June, 2016 vide Notification No. S.O. 1934(E) issued dated 01.06.2016.
(1) Where it appears to the Tribunal, on a reference made to it by the Central Government or in connection with any inquiry or investigation into the affairs of a company under this Chapter or on any complaint made by such number of members as specified under sub-section (1) of section 244 or a creditor having one lakh amount outstanding against the company or any other person having a reasonable ground to believe that the removal, transfer or disposal of funds, assets, properties of the company is likely to take place in a manner that is prejudicial to the interests of the company or its shareholders or creditors or in public interest, it may by order direct that such transfer, removal or disposal shall not take place during such period not exceeding three years as may be specified in the order or may take place subject to such conditions and restrictions as the Tribunal may deem fit.
(2) In case of any removal, transfer or disposal of funds, assets, or properties of the company in contravention of the order of the Tribunal under sub-section (1), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.