Chapter XIV - Inspection, Inquiry and Investigation
Section 207
Section 207: conduct of inspection and inquiry
When the Registrar or an inspector calls for books and papers under section 206, section 207 governs how the inspection or inquiry is run and what directors, officers and employees must do.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where a Registrar or inspector calls for the books of account and other books and papers under section 206, it shall be the duty of every director, officer or other employee of the company to produce all such documents to the Registrar or inspector and furnish him with such statements, information or explanations in such form as the Registrar or inspector may require and shall render all assistance to the Registrar or inspector in connection with such inspection. (2) The Registrar or inspector, making an inspection or inquiry under section 206 may, during the course of such inspection or inquiry, as the case may be,—(a) make or cause to be made copies of books of account and other books and papers; or (b) place or cause to be placed any marks of identification in such books in token of the inspection having been made. (3) Notwithstanding anything contained in any other law for the time being in force or in any contract to the contrary, the Registrar or inspector making an inspection or inquiry shall have all the powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit in respect of the following matters, namely:—(a) the discovery and production of books of account and other documents, at such place and time as may be specified by such Registrar or inspector making the inspection or inquiry; (b) summoning and enforcing the attendance of persons and examining them on oath; and (c) inspection of any books, registers and other documents of the company at any place. (4) (i) If any director or officer of the company disobeys the direction issued by the Registrar or the inspector under this section, the director or the officer shall be punishable with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (ii) If a director or an officer of the company has been convicted of an offence under this section, the director or the officer shall, on and from the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified from holding an office in any company.
Introduction
Every director, officer or other employee must produce the documents called for, give the statements, information or explanations required in the form specified, and render all assistance. The Registrar or inspector may copy books and papers or mark them in token of inspection, and has specified powers of a civil court under the Code of Civil Procedure, 1908.
Disobeying a direction is punishable with imprisonment and fine, and a conviction leads to deemed vacation of office and disqualification from holding office in any company. Section 207 commenced on 1 April 2014 under S.O. 902(E); the India Code consolidated text shows no amendment.
Key takeaways
Duty to assist
Every director, officer or other employee must produce documents, furnish statements and render all assistance.
Civil court powers
Discovery and production of documents, summoning and examining persons on oath, and inspecting company records at any place.
Conviction consequences
A convicted director or officer is deemed to have vacated office and is disqualified from holding office in any company.
Produce documents and assist
Once the Registrar or inspector calls for books of account and other books and papers under section 206, every director, officer or other employee must produce them, furnish statements, information or explanations in the form required, and render all assistance in connection with the inspection.
Copies and identification marks
During the inspection or inquiry, the Registrar or inspector may make or cause to be made copies of books of account and other books and papers, or place marks of identification in the books in token of the inspection having been made.
Civil court powers
Notwithstanding any other law or any contract to the contrary, the Registrar or inspector has the powers of a civil court under the Code of Civil Procedure, 1908 while trying a suit for three matters: discovery and production of books of account and other documents at a specified place and time; summoning and enforcing the attendance of persons and examining them on oath; and inspection of any books, registers and other documents of the company at any place.
Consequences of disobedience
A director or officer who disobeys a direction issued under the section is punishable with imprisonment up to one year and with fine of not less than twenty-five thousand rupees, which may extend to one lakh rupees. From the date of conviction, the director or officer is deemed to have vacated office and is disqualified from holding an office in any company. Because the offence is punishable with imprisonment and also with fine, section 441(6) makes it non-compoundable.
Practical preparation
Nominate one officer to coordinate with the Registrar or inspector; keep a register of documents produced and copies taken; prepare directors and staff who may be examined on oath; record every direction received and the date it was complied with.
Practical checklist
Do
- Comply with each direction in the form and time required.
- Keep a log of documents produced, copies made and identification marks placed.
Avoid
- Do not withhold documents by relying on a confidentiality clause; sub-section (3) applies notwithstanding any contract to the contrary.
- Do not treat a direction as optional; disobedience can lead to conviction and loss of office.
Illustrative example
Hypothetical: a director refuses to attend
During an inquiry under section 206, the inspector summons a director to explain related-party payments. The director does not attend.
Summons
The inspector uses the civil court power to summon and enforce attendance.
Direction
A direction to attend and produce the payment records is issued under section 207.
Risk
Disobedience exposes the director to imprisonment and fine, and conviction to loss of office.
Outcome
- Attending with the records, and keeping a note of what was produced, protects both the director and the company.
Glossary
- Examination on oath
- Questioning of a person under oath by the Registrar or inspector using civil court powers.
- Deemed vacation of office
- The automatic loss of a director’s or officer’s office from the date of conviction under the section.
Frequently asked questions
Can the inspector examine a director on oath?
Yes. Sub-section (3)(b) gives the power to summon and enforce the attendance of persons and examine them on oath.
What happens to a director convicted under section 207?
The director is deemed to have vacated office from the date of conviction and is disqualified from holding an office in any company.
Can the offence be compounded?
No. It is punishable with imprisonment and also with fine, and section 441(6) excludes such offences from compounding.
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Contact BizeneedLast updated 11 October 2026