Section 214 of the Companies Act, 2013
Section 214 of the Companies Act, 2013 deals with the restrictions on the use of certain provisions relating to the investigation of companies.
🔹 Section 214 – Security for Payment of Costs and Expenses of Investigation
🟡 Key Provision:
When a person applies to the Tribunal under Section 213 (i.e., for investigation into the affairs of a company based on allegations of fraud, misconduct, etc.), the Tribunal may:
Require the applicant(s) to provide security not exceeding ₹25,000 for payment of the costs and expenses that may be incurred in such investigation.
This provision acts as a safeguard against frivolous or malicious applications for investigation.
🧾 Purpose of Section 214:
To prevent misuse of the investigation mechanism.
To ensure that only serious and genuine applications are filed under Section 213 by requiring a financial commitment.
🔗 Related Section:
Section 213: Allows investigation into company affairs upon application by:
At least 100 members (in case of a company with share capital), or
Members holding 1/10th of voting power, or
Without minimum number in case of a company without share capital.
RELATED Blog
0 comments