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

An officer of Kaveri Agro Ltd., which is under investigation, knowingly gives a false explanation to the inspector. Under the Companies Act, 2013, how is this person punishable?

Giving a false explanation, or one known to be false, during inspection, inquiry or investigation makes the person punishable for fraud in the manner provided in section 447. The same applies to destroying, falsifying or concealing documents or making false entries.

  1. APunishable for fraud in the manner provided in section 447Correct
  2. BBy a penalty of Rs 25,000 only, as the act is a procedural lapse
  3. COnly by removal from office by the Central Government
  4. DBy imprisonment of one year under section 207

Explanation

Section 229 covers a person required to give an explanation or statement, or an officer of a company under investigation, who provides an explanation which is false or known to be false. Such a person is punishable for fraud as provided in section 447. Section 207 relates to disobeying directions, so the one-year option is wrong.

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