Chapter XIV - Inspection, Inquiry and Investigation
Section 214
Section 214: security for payment of costs and expenses of investigation
Section 214 lets the Central Government ask the person who sought an investigation to give security for its costs before an inspector is appointed. The security is refunded if the investigation leads to prosecution.
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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
Where an investigation is ordered by the Central Government in pursuance of clause (b) of sub-section (1) of section 210, or in pursuance of an order made by the Tribunal under section 213, the Central Government may before appointing an inspector under sub-section (3) of section 210 or clause (b) of section 213, require the applicant to give such security not exceeding twenty-five thousand rupees as may be prescribed, as it may think fit, for payment of the costs and expenses of the investigation and such security shall be refunded to the applicant if the investigation results in prosecution.
Introduction
It applies to investigations ordered under section 210(1)(b) and to those ordered by the Tribunal under section 213. The security is capped at twenty-five thousand rupees, within that cap as may be prescribed.
Section 214 commenced on 1 April 2014 under S.O. 902(E). The India Code shows no amendment, and its text matches the 2013 Gazette.
Key takeaways
Discretionary
The Central Government may require security, as it thinks fit.
Cap
Not exceeding twenty-five thousand rupees, as may be prescribed.
Refund
Refunded if the investigation results in prosecution.
When security can be required
Where an investigation is ordered under section 210(1)(b), or under a Tribunal order under section 213, the Central Government may, before appointing an inspector under section 210(3) or section 213(b), require the applicant to give security for the costs and expenses of the investigation.
Amount and refund
The security may not exceed twenty-five thousand rupees and is as may be prescribed. It is refunded to the applicant if the investigation results in prosecution.
Practical preparation
Budget for the security when planning an application; check the prescribed amount in the current rules; keep proof of deposit for a refund claim if prosecution follows.
Investigation provisions are applied case by case by the Central Government, the Tribunal, the Special Court or the inspector; this guide explains the statutory text and is not a substitute for advice on a live matter.
Practical checklist
Do
- Check the currently prescribed amount before applying.
Avoid
- Do not expect a refund if the investigation does not result in prosecution.
Illustrative example
Hypothetical: members asked for security
After the Tribunal orders an investigation under section 213, the Central Government asks the applicant members for security.
Deposit
The members deposit the prescribed security.
Investigation
The inspector is appointed and investigates.
Outcome
Prosecution follows, and the members claim a refund.
Outcome
- The security is refunded because the investigation resulted in prosecution.
Glossary
- Security for costs
- An amount deposited by the applicant to cover the costs and expenses of the investigation.
Frequently asked questions
What is the maximum security?
Twenty-five thousand rupees, within which the prescribed amount applies.
When is it refunded?
If the investigation results in prosecution.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026