Section 240 of the Companies Act, 2013
🔹 Section 240 of the Companies Act, 2013
Title: Seizure of Documents by Inspector
✅ Overview:
Section 240 empowers an inspector appointed under the Act to seize documents, books, and papers during the course of an investigation if certain conditions are met.
🔍 Key Provisions:
(1) If the inspector has reasonable grounds to believe that:
The books and papers of a company or any other body or person referred to in Section 219,
May be destroyed, altered, falsified, or hidden,
➡️ Then the inspector may enter the place where such documents are kept and seize them.
(2) The inspector must obtain prior approval of the Central Government before making any such seizure.
(3) The inspector shall retain the books and papers in their custody only for as long as necessary, and shall:
Return them to the company or person from whom they were seized, after examination, or
Allow the company or person to make copies or take extracts from the documents while they are in custody.
🛡️ Safeguards:
This section balances investigative powers with procedural fairness, ensuring that seizure is not arbitrary.
Requires government approval to prevent misuse of power.
📌 Related Sections:
Section 209–218: Deal with the powers of inspection and investigation.
Section 219: Allows investigation of related companies.
Section 241–242: Deal with oppression and mismanagement proceedings.
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