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CMA Final · Corporate and Economic Laws · Inspection, Inquiry and Investigation

An officer of a company under investigation falsifies documents relating to the company's assets and gives an explanation he knows to be false. Under the Companies Act, 2013, how is he punishable?

Falsifying or destroying documents, making false entries or giving a knowingly false explanation during inspection, inquiry or investigation is punishable for fraud in the manner provided in section 447. No prior freezing order or Registrar action is needed.

  1. AOnly with a fine of up to Rs 1 lakh under the inspection provisions
  2. BHe is punishable for fraud in the manner provided in section 447Correct
  3. COnly with removal from office by the Registrar
  4. DHe is not punishable unless the Tribunal has first frozen the company's assets

Explanation

Section 229 states that a person who destroys, mutilates or falsifies documents, makes false entries or gives a false explanation during inspection, inquiry or investigation is punishable for fraud as provided in section 447. No prior Tribunal order is required.

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