212. Investigation into affairs of Company by Serious Fraud Investigation Office
(1) Without prejudice to the provisions of section 210, where the Central
Government is of the opinion, that it is necessary to investigate into the affairs of a company
by the Serious Fraud Investigation Office—
(a) on receipt of a report of the Registrar or inspector under section 208;
(b) on intimation of a special resolution passed by a company that its affairs are
required to be investigated;
(c) in the public interest; or
(d) on request from any Department of the Central Government or a State
Government,
the Central Government may, by order, assign the investigation into the affairs of the said
company to the Serious Fraud Investigation Office and its Director, may designate such
number of inspectors, as he may consider necessary for the purpose of such investigation.
(2) Where any case has been assigned by the Central Government to the Serious
Fraud Investigation Office for investigation under this Act, no other investigating agency of
Central Government or any State Government shall proceed with investigation in such case
in respect of any offence under this Act and in case any such investigation has already been
initiated, it shall not be proceeded further with and the concerned agency shall transfer the
relevant documents and records in respect of such offences under this Act to Serious Fraud
Investigation Office.
(3) Where the investigation into the affairs of a company has been assigned by the
Central Government to Serious Fraud Investigation Office, it shall conduct the investigation
in the manner and follow the procedure provided in this Chapter; and submit its report to the
Central Government within such period as may be specified in the order.
(4) The Director, Serious Fraud Investigation Office shall cause the affairs of the
company to be investigated by an Investigating Officer who shall have the power of the
inspector under section 217.
(5) The company and its officers and employees, who are or have been in employment
of the company shall be responsible to provide all information, explanation, documents and
assistance to the Investigating Officer as he may require for conduct of the investigation.
(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the
offences covered under sub-sections (5) and (6) of section 7, section 34, section 36, subsection
(1) of section 38, sub-section (5) of section 46, sub-section (7) of section 56, subsection
(10) of section 66, sub-section (5) of section 140, sub-section (4) of section 206,
section 213, section 229, sub-section (1) of section 251, sub-section (3) of section 339 and
section 448 which attract the punishment for fraud provided in section 447 of this Act shall
be cognizable and no person accused of any offence under those sections shall be released
on bail or on his own bond unless—
(i) the Public Prosecutor has been given an opportunity to oppose the application
for such release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied
that there are reasonable grounds for believing that he is not guilty of such offence
and that he is not likely to commit any offence while on bail:
Provided that a person, who, is under the age of sixteen years or is a woman or is sick
or infirm, may be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence referred
to this sub-section except upon a complaint in writing made by—
(i) the Director, Serious Fraud Investigation Office; or
(ii) any officer of the Central Government authorised, by a general or special
order in writing in this behalf by that Government.
(7) The limitation on granting of bail specified in sub-section (6) is in addition to the
limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in
force on granting of bail.
(8) If the Director, Additional Director or Assistant Director of Serious Fraud
Investigation Office authorised in this behalf by the Central Government by general or
special order, has on the basis of material in his possession reason to believe (the reason for
such belief to be recorded in writing) that any person has been guilty of any offence punishable
under sections referred to in sub-section (6), he may arrest such person and shall, as soon as
may be, inform him of the grounds for such arrest.
(9) The Director, Additional Director or Assistant Director of Serious Fraud Investigation
Office shall, immediately after arrest of such person under sub-section (8), forward a copy of
the order, along with the material in his possession, referred to in that sub-section, to the
Serious Fraud Investigation Office in a sealed envelope, in such manner as may be prescribed
and the Serious Fraud Investigation Office shall keep such order and material for such period
as may be prescribed.
(10) Every person arrested under sub-section (8) shall within twenty-four hours, be
taken to a Judical Magistrate or a Metropolitan Magistrate, as the case may be, having
jurisdiction:
Provided that the period of twenty-four hours shall exclude the time necessary for the
journey from the place of arrest to the Magistrate’s court.
(11) The Central Government if so directs, the Serious Fraud Investigation Office shall
submit an interim report to the Central Government.
(12) On completion of the investigation, the Serious Fraud Investigation Office shall
submit the investigation report to the Central Government.
(13) Notwithstanding anything contained in this Act or in any other law for the time
being in force, a copy of the investigation report may be obtained by any person concerned
by making an application in this regard to the court.
(14) On receipt of the investigation report, the Central Government may, after examination
of the report (and after taking such legal advice, as it may think fit), direct the Serious Fraud
Investigation Office to initiate prosecution against the company and its officers or employees,
who are or have been in employment of the company or any other person directly or indirectly
connected with the affairs of the company.
(15) Notwithstanding anything contained in this Act or in any other law for the time
being in force, the investigation report filed with the Special Court for framing of charges
shall be deemed to be a report filed by a police officer under section 173 of the Code of
Criminal Procedure, 1973.
(16) Notwithstanding anything contained in this Act, any investigation or other action
taken or initiated by Serious Fraud Investigation Office under the provisions of the Companies
Act, 1956 shall continue to be proceeded with under that Act as if this Act had not been
passed.
(17) (a) In case Serious Fraud Investigation Office has been investigating any offence
under this Act, any other investigating agency, State Government, police authority, income-tax
authorities having any information or documents in respect of such offence shall provide all
such information or documents available with it to the Serious Fraud Investigation Office;
(b) The Serious Fraud Investigation Office shall share any information or documents
available with it, with any investigating agency, State Government, police authority or incometax
authorities, which may be relevant or useful for such investigating agency, State
Government, police authority or income-tax authorities in respect of any offence or matter
being investigated or examined by it under any other law.