Section 206 — Power to call for information, inspect books and conduct inquiries

(1) Where on a scrutiny
of any document filed by a company or on any information received by him, the Registrar is of the opinion
that any further information or explanation or any further documents relating to the company is necessary,
he may by a written notice require the company—
(a) to furnish in writing such information or explanation; or
(b) to produce such documents,
within such reasonable time, as may be specified in the notice.
(2) On the receipt of a notice under sub-section (1), it shall be the duty of the company and of its officers
concerned to furnish such information or explanation to the best of their knowledge and power and to
produce the documents to the Registrar within the time specified or extended by the Registrar:
Provided that where such information or explanation relates to any past period, the officers who had
been in the employment of the company for such period, if so called upon by the Registrar through a notice
served on them in writing, shall also furnish such information or explanation to the best of their knowledge.

1. Subs. by Act 22 of 2019, s. 30, for sub-section (5) (w.e.f. 2-11-2018).
2. Subs. by Act 29 of 2020, s. 41, for certain words (w.e.f. 21-12-2020).

(3) If no information or explanation is furnished to the Registrar within the time specified under sub -
section (1) or if the Registrar on an exami nation of the documents furnished is of the opinion that the
information or explanation furnished is in adequate or if the Registrar is satisfied on a scrutiny of the
documents furnished that an unsatisfactory state of affairs exists in the company and doe s not disclose a
full and fair statement of the information required, he may, by another written notice, call on the company
to produce for his inspection such further books of account, books, papers and explanations as he may
require at such place and at such time as he may specify in the notice:
Provided that before any notice is served under this sub-section, the Registrar shall record his reasons
in writing for issuing such notice.
(4) If the Registrar is satisfied on the basis of information available with or furnished to him or on a
representation made to him by any person that the business of a company is being carried on for a fraudulent
or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors
are not being addressed, the Registrar may, after informing the company of the allegations made against it
by a written order, call on the company to furnish in writing any information or explanation on matters
specified in the order within such time as he may specify therein and carry out such inquiry as he deems fit
after providing the company a reasonable opportunity of being heard:
Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct
the Registrar or an inspector appointed by it for the purpose to carry out the inquiry under this sub-section:
Provided further that where business of a company has been or is being carried on for a fraudulent or
unlawful purpose, every officer of the company who is in default shall be punishable for fraud in the manner
as provided in section 447.
(5) Without prejudice to the foregoing provisions of this section, the Central Government may, if it is
satisfied that the circumstances so warrant, direct inspection of books and papers of a company by an
inspector appointed by it for the purpose.
(6) The Central Government may, having regard to the circumstances by general or special order,
authorise any statutory authority to carry out the inspection of books of account of a company or cl ass of
companies.
(7) If a company fails to furnish any information or explanation or produce any document required
under this section, the company and every officer of the company, who is in default shall be punishable
with a fine which may extend to one lakh rupees and in the case of a continuing failure, with an additional
fine which may extend to five hundred rupees for everyday after the first during which the failure continues.
207.Conduct of inspection and inquiry. —(1) Where a Registrar or inspector calls for the books of
account and other books and papers under section 206, it shall be the duty of every director, officer or other
employee of the company to produce all such documents to the Registrar or inspector and furnish him with
such statements, information or explanations in such form as the Registrar or inspector may require and
shall render all assistance to the Registrar or inspector in connection with such inspection.
(2) The Registrar or inspector, making an inspection or inquiry under secti on 206 may, during the
course of such inspection or inquiry, as the case may be,—
(a) make or cause to be made copies of books of account and other books and papers; or
(b) place or cause to be placed any marks of identification in such books in token of the inspection
having been made.
(3) Notwithstanding anything contained in any other law for the time being in force or in any contract
to the contrary, the Registrar or inspector making an inspection or inquiry shall have all the powers as are
vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of
the following matters, namely:—
(a) the discovery and production of books of account and other documents, at such place and time
as may be specified by such Registrar or inspector making the inspection or inquiry;
(b) summoning and enforcing the attendance of persons and examining them on oath; and

(c) inspection of any books, registers and other documents of the company at any place.
(4) (i) If any director o r officer of the company disobeys the direction issued by the Registrar or the
inspector under this section, the director or the officer shall be punishable with imprisonment which may
extend to one year and with fine which shall not be less than twenty -five thousand rupees but which may
extend to one lakh rupees.
(ii) If a director or an officer of the company has been convicted of an offence under this section, the