Section 212 of the Companies Act, 2013
Section 212 of the Companies Act, 2013 deals with the investigation into serious fraud, misconduct, or corporate offences by the Serious Fraud Investigation Office (SFIO).
🔹 Section 212 – Investigation into Affairs of Company by SFIO (Serious Fraud Investigation Office)
✅ 1. Power to Order SFIO Investigation:
The Central Government may assign an investigation into the affairs of a company to the SFIO, under the following circumstances:
On receipt of a report from the Registrar or an inspector under Section 208,
On intimation of special resolution passed by a company that its affairs need investigation,
In the public interest, or
On request from any department of the Central or State Government.
✅ 2. SFIO Powers:
SFIO has the power to investigate corporate fraud and related offences.
Once SFIO is assigned a case, no other investigating agency (CBI, Police, etc.) shall proceed with the investigation related to that matter.
✅ 3. Arrest Powers (Section 212(8)):
An SFIO officer (not below the rank of Assistant Director) has power to arrest any person if they have reason to believe the person is guilty of:
Offences under Section 447 (Fraud)
The officer must inform the arrested person of the grounds and produce them before a Magistrate within 24 hours.
✅ 4. Submission of Report (Section 212(11)):
After investigation, SFIO must submit a report to the Central Government.
This may include recommendation for prosecution.
✅ 5. Cognizance by Special Court (Section 212(6) & (7)):
The offence is considered cognizable and non-bailable.
The person arrested cannot be released on bail unless:
The Public Prosecutor has been given a chance to oppose bail, and
The court is satisfied that there are reasonable grounds to believe the person is not guilty of the offence.
✅ 6. Others Bound to Assist (Section 212(5)):
Directors, officers, employees, and past employees are bound to assist SFIO in the investigation.
🔸 Why It Matters:
Section 212 ensures that serious corporate frauds are investigated by a specialized body (SFIO), allowing the government to maintain integrity and transparency in corporate governance.
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