Section 221 Freezing of assets of company on inquiry and investigation – Companies Act 2013

Amended and updated notes on section 221 of Companies Act 2013. Provisions and rules related to freezing of assets of company on inquiry and investigation.

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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 206229) 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 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.221
Section NameFreezing of assets of company on inquiry and investigation
Monthly Updated EditionCompany 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.


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