Section-224: Actions to be Taken in Pursuance of Inspector’s Report

Notified Date of Section: 01/04/2014

*(2) If any company or other body corporate is liable to be wound up under this Act ¹[“or under the Insolvency and Bankruptcy Code, 2016”] and it appears to the Central Government from any such report made under section 223 that it is expedient so to do by reason of any such circumstances as are referred to in section 213, the Central Government may, unless the company or body corporate is already being wound up by the Tribunal, cause to be presented to the Tribunal by any person authorised by the Central Government in this behalf—
(a) a petition for the winding up of the company or body corporate on the ground that it is just and equitable that it should be wound up;
(b) an application under section 241; or
(c) both.

(3) If from any such report as aforesaid, it appears to the Central Government that proceedings ought, in the public interest, to be brought by the company or any body corporate whose affairs have been investigated under this Chapter—
(a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such company or body corporate; or
(b)for the recovery of any property of such company or body corporate which has been misapplied or wrongfully retained,

the Central Government may itself bring proceedings for winding up in the name of such company or body corporate.

(4)The Central Government, shall be indemnified by such company or body corporate against any costs or expenses incurred by it in, or in connection with, any proceedings brought by virtue of sub-section (3).

**(5)Where the report made by an inspector states that fraud has taken place in a company and due to such fraud any director, key managerial personnel, other officer of the company or any other person or entity, has taken undue advantage or benefit, whether in the form of any asset, property or cash or in any other manner, the Central Government may file an application before the Tribunal for appropriate orders with regard to disgorgement of such asset, property, or cash, as the case may be, and also for holding such director, key managerial personnel, officer or other person liable personally without any limitation of liability.

Note:

* Sub-section 2 has been notified as on 07/12/2016 and is effective from 15/12/2016. 

** Sub-section 5 has been notified as on 01/06/2016.

Amendment

1. (a)  Inserted by vide MCA Notification number F.O. 3453(E) Dated 28th May, 2016.

    (b)  Effective from 15th November, 2016 by The MCA Notification No. F.O. 3453(E) enforcing the related sections of Insolvency and Bankruptcy Code, 2016