Section 218: Protection of employees during investigation
This section is for protecting employees from unfair treatment during investigations of their company by requiring the company to get approval from the Tribunal before taking action against them.
The section, clause by clause
What the section says
In plain terms
(1)Notwithstanding anything contained in any other law for the time being in force, if—
If a company is being investigated, it must get approval from the Tribunal before taking action against an employee, such as discharging, suspending, or punishing them, or changing their terms of employment to their disadvantage.
(1)(a)during the course of any investigation of the affairs and other matters of or relating to a company, other body corporate or person under section 210, section 212, section 213 or section 219 or of the membership and other matters of or relating to a company, or the ownership of shares in or debentures of a company or body corporate, or the affairs and other matters of or relating to a company, other body corporate or person, under section 216; or
(1)(b)during the pendency of any proceeding against any person concerned in the conduct and management of the affairs of a company under Chapter XVI, such company, other body corporate or person proposes—
(1)(b)(i)to discharge or suspend any employee; or
(1)(b)(ii)to punish him, whether by dismissal, removal, reduction in rank or otherwise; or
(1)(b)(iii)to change the terms of employment to his disadvantage, the company, other body corporate or person, as the case may be, shall obtain approval of the Tribunal of the action proposed against the employee and if the Tribunal has any objection to the action proposed, it shall send by post notice thereof in writing to the company, other body corporate or person concerned.
(2)If the company, other body corporate or person concerned does not receive within thirty days of making of application under sub-section (1), the approval of the Tribunal, then and only then, the company, other body corporate or person concerned may proceed to take against the employee, the action proposed.
If the company does not receive approval from the Tribunal within 30 days of making an application, it can proceed with the proposed action against the employee.
(3)If the company, other body corporate or person concerned is dissatisfied with the objection raised by the Tribunal, it may, within a period of thirty days of the receipt of the notice of the objection, prefer an appeal to the Appellate Tribunal in such manner and on payment of such fees as may be prescribed.
If the company is dissatisfied with the Tribunal's objection to the proposed action, it can appeal to the Appellate Tribunal within 30 days of receiving the notice of objection.
(4)The decision of the Appellate Tribunal on such appeal shall be final and binding on the Tribunal and on the company, other body corporate or person concerned.
The Appellate Tribunal's decision on the appeal is final and binding on the Tribunal and the company.
(5)For the removal of doubts, it is hereby declared that the provisions of this section shall have effect without prejudice to the provisions of any other law for the time being in force.
The provisions of this section do not affect the provisions of any other law currently in force.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
This section refers to
s. 210 Investigation into affairs of companys. 212 Investigation into affairs of Company by Serious Fraud Investigation Offices. 213 Investigation into company’s affairs in other casess. 216 Investigation of ownership of companys. 219 Power of inspector to conduct investigation into affairs of related companies, etc
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.