Chapter XIV - Inspection, Inquiry and Investigation
Section 219
Section 219: power of inspector to investigate related companies, etc.
Section 219 lets an inspector, already investigating a company under section 210, 212 or 213, extend the investigation to connected bodies corporate and individuals, with the Central Government’s prior approval.
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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
If an inspector appointed under section 210 or section 212 or section 213 to investigate into the affairs of a company considers it necessary for the purposes of the investigation, to investigate also the affairs of—(a) any other body corporate which is, or has at any relevant time been the company’s subsidiary company or holding company, or a subsidiary company of its holding company; (b) any other body corporate which is, or has at any relevant time been managed by any person as managing director or as manager, who is, or was, at the relevant time, the managing director or the manager of the company; (c) any other body corporate whose Board of Directors comprises nominees of the company or is accustomed to act in accordance with the directions or instructions of the company or any of its directors; or (d) any person who is or has at any relevant time been the company’s managing director or manager or employee, he shall, subject to the prior approval of the Central Government, investigate into and report on the affairs of the other body corporate or of the managing director or manager, in so far as he considers that the results of his investigation are relevant to the investigation of the affairs of the company for which he is appointed.
Introduction
Connected entities include holding and subsidiary companies, fellow subsidiaries, companies managed by the same managing director or manager, and companies whose Boards are nominees of, or act on instructions of, the company. The company’s managing director, manager or employee can also be covered.
Section 219 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
Group reach
Holding, subsidiary and fellow subsidiary companies can be investigated.
Common management
Bodies corporate managed by the company’s managing director or manager are covered.
Prior approval
The inspector needs the Central Government’s prior approval.
Relevance test
Only so far as the results are relevant to the main investigation.
Who can be brought in
The inspector may investigate (a) a body corporate that is or was the company’s subsidiary or holding company, or a subsidiary of its holding company; (b) a body corporate managed by a person who is or was the company’s managing director or manager; (c) a body corporate whose Board comprises nominees of the company or is accustomed to act on directions of the company or its directors; and (d) any person who is or was the company’s managing director, manager or employee.
Conditions
The inspector must consider it necessary for the investigation, must have the Central Government’s prior approval, and reports on the other body corporate or person only so far as the results are relevant to the investigation of the main company.
Practical preparation
Map group companies and common directors; keep intercompany agreements and board minutes accessible; ensure group entities know their duties under section 217(1).
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
- Prepare group-wide records when a group company is under investigation.
Avoid
- Do not assume a separate legal entity is outside the inquiry.
Illustrative example
Hypothetical: tracing funds to a subsidiary
An inspector investigating a holding company finds that funds were routed through a subsidiary.
Approval
The inspector obtains the Central Government’s prior approval.
Investigation
The subsidiary’s accounts and board minutes are examined.
Report
The inspector reports on the subsidiary to the extent relevant.
Outcome
- The fund flow is traced across the group.
Glossary
- Holding company
- Defined in section 2(46).
- Subsidiary company
- Defined in section 2(87).
Frequently asked questions
Can an employee be investigated under section 219?
Yes. Clause (d) covers any person who is or was the company’s managing director, manager or employee.
Does the inspector need approval?
Yes, the prior approval of the Central Government.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026