Section 222: Imposition of restrictions upon securities
Companies Act, 2013 · Chapter XIV: Inspection, Inquiry And Investigation · In force
This section is for allowing the Tribunal to impose restrictions on a company's securities to aid in investigations and punishing companies and officers that violate these restrictions.
Penalty
(2) Where securities in any company are issued or transferred or acted upon in contravention of an order of the Tribunal under sub-section (1), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.
The section, clause by clause
What the section says
In plain terms
(1)Where it appears to the Tribunal, in connection with any investigation under section 216 or on a complaint made by any person in this behalf, that there is good reason to find out the relevant facts about any securities issued or to be issued by a company and the Tribunal is of the opinion that such facts cannot be found out unless certain restrictions, as it may deem fit, are imposed, the Tribunal may, by order, direct that the securities shall be subject to such restrictions as it may deem fit for such period not exceeding three years as may be specified in the order.
The Tribunal can impose restrictions on a company's securities for up to 3 years if it needs to investigate the securities and thinks restrictions are necessary to find out the relevant facts.
(2)Where securities in any company are issued or transferred or acted upon in contravention of an order of the Tribunal under sub-section (1), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees, or with both.
If a company issues or transfers securities in violation of the Tribunal's order, it can be fined between 1 lakh rupees and 25 lakh rupees, and officers in default can face imprisonment for up to 6 months or a fine between 25,000 rupees and 5 lakh rupees, or both.
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.
Amendment notes
1. Ins. by Act 1 of 2018, s. 72 (w.e.f. 9-2-2018).
2. Subs. by Act 21 of 2015, s. 18, for “by the seal” (w.e.f. 29-5-2015).
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.