search this site - type your query and submit

Daily Email Newsletter (Sign-up Free)

Sec 221 Companies Act 2013: Company Assets' Freezing (Inquiry/Investigation)

SECTION-221 (Freezing of assets of company on inquiry and investigation) under CHAPTER-XIV (Inspection, Inquiry and Investigation) of the Companies Act, 2013

(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.

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)

(2) Section 221 of the Companies Act, 2013 was notified by MCA Notification S.O. 1934(E) dated 1st June 2016 (w.e.f. 1st June 2016)

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

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

No comments:

Post a Comment

In comment with "Name/Url" option, only Name is mandatory to be filled.