Section 224 Actions to be taken in pursuance of inspector’s report – Companies Act 2013

Amended and updated notes on section 224 of Companies Act 2013. Detail discussion on provisions and rules related to inspector’s report.

Amended and updated notes on section 224 of Companies Act 2013. Detail discussion on provisions and rules related to actions to be taken in pursuance of inspector’s report.

Chapter XIV (Sections 206229) of the Companies Act, 2013 (CA 2013) deals with the provisions related to Inspection, Inquiry and Investigation. Section 224 of CA 2013 provides for actions to be taken in pursuance of inspector’s report.

Recently, we have discussed in detail section 223 (Inspector’s report) of CA 2013. Today, we learn the provisions of section 224 of Companies Act 2013.

The provisions of section 224 are effective from 1-April-2014. You may refer Notification No. S.O. 902(E) issued dated 27-03-2014. In this article, you will learn detail of the provisions of section 224 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.224
Section NameActions to be taken in pursuance of inspector’s report
Monthly Updated EditionCompany Law PDF

Section 224 of Companies Act 2013: Actions to be taken in pursuance of inspector’s report

Section 224 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014 except sub-section (5) which shall come into force on 1st June, 2016 vide Notification No. S.O. 1934(E) issued dated 01.06.2016 and sub-section (2) which shall come into force on 15th December, 2016 vide Notification No. S.O. 3677(E) dated 07.12.2016.

(1) If, from an inspector’s report, made under section 223, it appears to the Central Government that any person has, in relation to the company or in relation to any other body corporate or other person whose affairs have been investigated under this Chapter been guilty of any offence for which he is criminally liable, the Central Government may prosecute such person for the offence and it shall be the duty of all officers and other employees of the company or body corporate to give the Central Government the necessary assistance in connection with the prosecution.

(2) If any company or other body corporate is liable to be wound up under this Act [or under the Insolvency and Bankruptcy Code, 2016] and it appears to the Central Government from any such report made under section 223 that it is expedient so to do by reason of any such circumstances as are referred to in section 213, the Central Government may, unless the company or body corporate is already being wound up by the Tribunal, cause to be presented to the Tribunal by any person authorised by the Central Government in this behalf—

  • (a) a petition for the winding up of the company or body corporate on the ground that it is just and equitable that it should be wound up;
  • (b) an application under section 241; or
  • (c) both.

(3) If from any such report as aforesaid, it appears to the Central Government that proceedings ought, in the public interest, to be brought by the company or any body corporate whose affairs have been investigated under this Chapter—

  • (a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such company or body corporate; or
  • (b) for the recovery of any property of such company or body corporate which has been misapplied or wrongfully retained,

the Central Government may itself bring proceedings for winding up in the name of such company or body corporate.

(4) The Central Government, shall be indemnified by such company or body corporate against any costs or expenses incurred by it in, or in connection with, any proceedings brought by virtue of sub-section (3).

(5) Where the report made by an inspector states that fraud has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity, has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property, or cash, as the case may be, and also for holding such director, key managerial personnel, officer or other person liable personally without any limitation of liability.


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