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Section 218 of the Companies Act 2013: Protection of Employees during Investigation

SECTION-218 (Protection of employees during investigation) under CHAPTER-XIV (Inspection, Inquiry and Investigation) of the Companies Act, 2013

(1) Notwithstanding anything contained in any other law for the time being in force, if—

(a) during the course of any investigation of the affairs and other matters of or relating to a company, other body corporate or person under section 210, section 212, section 213 or section 219 or of the membership and other matters of or relating to a company, or the ownership of shares in or debentures of a company or body corporate, or the affairs and other matters of or relating to a company, other body corporate or person, under section 216; or


(b) during the pendency of any proceeding against any person concerned in the conduct and management of the affairs of a company under Chapter XVI, such company, other body corporate or person proposes—
(i) to discharge or suspend any employee; or
(ii) to punish him, whether by dismissal, removal, reduction in rank or otherwise; or
(iii) to change the terms of employment to his disadvantage,
the company, other body corporate or person, as the case may be, shall obtain approval of the Tribunal of the action proposed against the employee and if the Tribunal has any objection to the action proposed, it shall send by post notice thereof in writing to the company, other body corporate or person concerned.

(2) If the company, other body corporate or person concerned does not receive within thirty days of making of application under sub-section (1), the approval of the Tribunal, then and only then, the company, other body corporate or person concerned may proceed to take against the employee, the action proposed.

(3) If the company, other body corporate or person concerned is dissatisfied with the objection raised by the Tribunal, it may, within a period of thirty days of the receipt of the notice of the objection, prefer an appeal to the Appellate Tribunal in such manner and on payment of such fees as may be prescribed.

(4) The decision of the Appellate Tribunal on such appeal shall be final and binding on the Tribunal and on the company, other body corporate or person concerned.

(5) For the removal of doubts, it is hereby declared that the provisions of this section shall have effect without prejudice to the provisions of any other law for the time being in force.







Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013) - link


(2) Section 218 of the Companies Act, 2013 was notified by MCA Notification S.O. 1934(E) dated 1st June 2016 (w.e.f. 1st June 2016) - link

(3) Further, refer the Companies (Inspection, Investigation and Inquiry) Rules, 2014 (w.e.f. 1st April, 2014) - link
[Also check amendments, if any, to the Companies (Inspection, Investigation and Inquiry) Rules, 2014]

(4) Application under Sec. 218(1) - Fees prescribed under the National Company Law Tribunal Rules, 2016 is Rs. 1000/- link 

[The fees may vary from time to time, please check the latest schedule of fees before proceeding ahead.]

(5) Appeal under Sec. 218(3) - Fees prescribed under the National Company Law Appellate Tribunal Rules, 2016 is Rs. 1000/- link
[The fees may vary from time to time, please check the latest schedule of fees before proceeding ahead.]








This page was last updated on 29th April, 2017.

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