Section 213 Investigation into company’s affairs in other cases – Companies Act 2013

Amended and updated notes on section 213 of Companies Act 2013. Provisions and rules related to investigation into company’s affairs in other cases.

Amended and updated notes on section 213 of Companies Act 2013. Detail discussion on provisions and rules related to investigation into company’s affairs in other cases.

Chapter XIV (Sections 206229) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Inspection, Inquiry and Investigation. Section 213 of CA 2013 provides for investigation into company’s affairs in other cases.

Recently, we have discussed in detail section 212 (Investigation into affairs of Company by Serious Fraud Investigation Office) of CA 2013. Today, we learn the provisions of section 213 of Companies Act 2013.

The provisions of section 213 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 213 of the Companies Act 2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.XIV
Chapter NameInspection, Inquiry and Investigation
Section No.213
Section NameInvestigation into company’s affairs in other cases
Monthly Updated EditionCompany Law PDF

Section 213 of Companies Act 2013: Investigation into company’s affairs in other cases

Section 213 shall come into force on 1st June, 2016 vide Notification No. S.O. 1934(E) issued dated 01.06.2016.

The Tribunal may, —

  • (a) on an application made by—
    • (i) not less than one hundred members or members holding not less than one-tenth of the total voting power, in the case of a company having a share capital; or
    • (ii) not less than one-fifth of the persons on the company’s register of members, in the case of a company having no share capital, and supported by such evidence as may be necessary for the purpose of showing that the applicants have good reasons for seeking an order for conducting an investigation into the affairs of the company; or
  • (b) on an application made to it by any other person or otherwise, if it is satisfied that there are circumstances suggesting that—
    • (i) the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose;
    • (ii) persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; or
    • (iii) the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, or the manager, of the company,

order, after giving a reasonable opportunity of being heard to the parties concerned, that the affairs of the company ought to be investigated by an inspector or inspectors appointed by the Central Government and where such an order is passed, the Central Government shall appoint one or more competent persons as inspectors to investigate into the affairs of the company in respect of such matters and to report thereupon to it in such manner as the Central Government may direct:

Provided that if after investigation it is proved that—

  • (i) the business of the company is being conducted with intent to defraud its creditors, members or any other persons or otherwise for a fraudulent or unlawful purpose, or that the company was formed for any fraudulent or unlawful purpose; or
  • (ii) any person concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud,

then, every officer of the company who is in default and the person or persons concerned in the formation of the company or the management of its affairs shall be punishable for fraud in the manner as provided in section 447.

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