Power to call for information, inspect books and conduct inquiries
Section 206 of the Companies Act, 2013 deals with power to call for information, inspect books and conduct inquiries. Where on a scrutiny of any document filed by a company or on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company-- (a) to furnish in The Act came into force on 01 Apr 2014.
(1) Where on a scrutiny of any document filed by a company or on any information received by him, the Registrar is of the opinion that any further information or explanation or any further documents relating to the company is necessary, he may by a written notice require the company--
(a) to furnish in writing such information or explanation; or
(b) to produce such documents,
within such reasonable time, as may be specified in the notice.
(2) On the receipt of a notice under sub-section (1), it shall be the duty of the company and of its officers concerned to furnish such information or explanation to the best of their knowledge and power and to produce the documents to the Registrar within the time specified or extended by the Registrar:
Provided that where such information or explanation relates to any past period, the officers who had been in the employment of the company for such period, if so called upon by the Registrar through a notice served on them in writing, shall also furnish such information or explanation to the best of their knowledge.
(3) If no information or explanation is furnished to the Registrar within the time specified under subsection (1) or if the Registrar on an examination of the documents furnished is of the opinion that the information or explanation furnished is inadequate or if the Registrar is satisfied on a scrutiny of the documents furnished that an unsatisfactory state of affairs exists in the company and does not disclose a full and fair statement of the information required, he may, by another written notice, call on the company to produce for his inspection such further books of account, books, papers and explanations as he may require at such place and at such time as he may specify in the notice:
Provided that before any notice is served under this sub-section, the Registrar shall record his reasons in writing for issuing such notice.
(4) If the Registrar is satisfied on the basis of information available with or furnished to him or on a representation made to him by any person that the business of a company is being carried on for a fraudulent or unlawful purpose or not in compliance with the provisions of this Act or if the grievances of investors are not being addressed, the Registrar may, after informing the company of the allegations made against it by a written order, call on the company to furnish in writing any information or explanation on matters specified in the order within such time as he may specify therein and carry out such inquiry as he deems fit after providing the company a reasonable opportunity of being heard:
Provided that the Central Government may, if it is satisfied that the circumstances so warrant, direct the Registrar or an inspector appointed by it for the purpose to carry out the inquiry under this subsection:
Provided further that where business of a company has been or is being carried on for a fraudulent or unlawful purpose, every officer of the company who is in default shall be punishable for fraud in the manner as provided in section 447.
(5) Without prejudice to the foregoing provisions of this section, the Central Government may, if it is satisfied that the circumstances so warrant, direct inspection of books and papers of a company by an inspector appointed by it for the purpose.
(6) The Central Government may, having regard to the circumstances by general or special order, authorise any statutory authority to carry out the inspection of books of account of a company or class of companies.
(7) If a company fails to furnish any information or explanation or produce any document required under this section, the company and every officer of the company, who is in default shall be punishable with a fine which may extend to one lakh rupees and in the case of a continuing failure, with an additional fine which may extend to five hundred rupees for every day after the first during which the failure continues.
Section 206, The Companies Act, 2013 (Act 18 of 2013).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 2
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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HDFC Bank Ltd. v. Registrar of Companies Mumbai & Anr.
Court's Decision & Legal Precedent
Quashed ROC order under Companies Act s.206(4) because even if s.206(4) can be invoked independently of ss.(1)–(3), the written order must record satisfaction that business is fraudulent/unlawful/non-compliant or that investor grievances are unaddressed, inform specific allegations, and link information sought to that satisfaction; a wrong-entity email and newspaper report without application of mind do not sustain jurisdiction.
On this section: Applied s.206(1)–(4): ROC inquiry notices must satisfy statutory preconditions (scrutiny/opinion; inadequate reply with recorded reasons; then fraud/unlawful/investor-grievance satisfaction with specific allegations and hearing opportunity).
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Nalini Basu v. Registrar of Companies (West Bengal) & Ors.
Court's Decision & Legal Precedent
Recorded that ROC notices under Companies Act ss.206(1)–(4) had been issued, but s.206(4) inquiry may be carried out only after providing the company a reasonable opportunity of being heard; disposed writ on ROC assurance to comply with successive s.206 stages before any inquiry.
On this section: Applied s.206(1)–(4): written notice/allegation stages precede inquiry, and inquiry under s.206(4) requires prior reasonable opportunity of hearing.
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Axis Ispat Pvt. Ltd. v. Union of India & Ors.
Court's Decision & Legal Precedent
Directed that under Companies Act s.206(4) the Registrar must afford the company a reasonable opportunity of being heard on preliminary findings and show-cause notices after inspection under s.206(5); company allowed to file a comprehensive reply and obtain hearing before ROC proceeds further (merits of allegations left open).
On this section: Applied s.206(4) hearing limb: inquiry/SCN process after calling for information/inspection requires reasonable opportunity of being heard before further coercive prosecution steps.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… had also conducted an enquiry into the accounts for the past five years, and in the preliminary report, the ICAI has mentioned that "accounts for the post five years have been prepared in a fraudulent and negligent manner by the erstwhile auditors". That the Registrar of Companies had also conducted an enquiry under Section 206 of the Companies Act and prima facie concluded that mismanagement and compromise in corporate governance norms and risk management has been perpetuated on IL&FS and its group companies by indiscriminately raising long term and short term loans/borrowings through public sector banks and financial institutions. …
Made under this section, and citing it
4 instruments name this provision in its title or its text without being made under it.
- Power to appoint inspectors under section 206(5) of CA 2013Notification 2016
- Companies (Removal of names of companies from the Register of Companies) Rules 2016Rule 2016
- Chapter XXIV - The Companies (Registration Offices and Fees) Rules, 2014.Rule 2014
- Chapter XXIX - The Companies (Miscellaneous) Rules, 2014 and Companies (Adjudication of Penalties) Rules, 2014.Rule 2014
Questions about Section 206
What have the courts held on Section 206 of the Companies Act?
HDFC Bank Ltd. v. Registrar of Companies Mumbai & Anr. (20 Jun 2024) is the leading judgment on this section among those set out below: Applied s.206(1)–(4): ROC inquiry notices must satisfy statutory preconditions (scrutiny/opinion; inadequate reply with recorded reasons; then fraud/unlawful/investor-grievance satisfaction with specific allegations and hearing opportunity). Another 2 judgments on this section are set out below. They run from 2021 to 2024.
How do I find court cases under Section 206 of the Companies Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Companies Act 206, section 206 Companies Act, section 206 of the Companies Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 3 reported judgments on this section are set out on this page, beginning with HDFC Bank Ltd. v. Registrar of Companies Mumbai & Anr. (20 Jun 2024).
What should I read with Section 206 of the Companies Act, and has it changed?
Its own text turns on section 447 (Punishment for fraud), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it. 4 instruments name it without being made under it, most recently Power to appoint inspectors under section 206(5) of CA 2013 (2016), then Companies (Removal of names of companies from the Register of Companies) Rules 2016 (2016).
When did Section 206 of the Companies Act come into force?
Section 206 of the Companies Act, cited as Companies Act 206, came into force on 01 Apr 2014, having been enacted on 29 Aug 2013. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions5089 words
- 143. Powers and duties of auditors and auditing standards1867 words
- 230. Power to compromise or make arrangements with creditors and members1432 words
- 232. Merger and amalgamation of companies1416 words
- 149. Company to have Board of Directors1403 words
- 217. Procedure, powers, etc., of inspectors1390 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.