Section 214 of Companies Act, 2013 – Security for payment of costs and expenses of investigation

SECTION 214. SECURITY FOR PAYMENT OF COSTS AND EXPENSES OF INVESTIGATION

[Effective from 1st April, 2014]

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.

Applicable Rules

Companies (Inspection, Investigation and Inquiry) Rules, 2014

[Effective from 1st April, 2014]

Rule 5. Security.—(1) The Central Government may before appointing an inspector under sub- section (3) of section 210, require the applicant to give a security not exceeding twenty-five thousand rupees for payment of the costs and expenses of investigation as per the criteria given below—

S. No	Turnover as per previous year balance sheet ( Rs.)	Amount of security (Rs.)
1	Turnover upto Rs.50 crore	Rs.10,000
2	Turnover more than Rs.50 crore and upto Rs.200 crore	Rs.15,000
3	Turnover more than Rs.200 crore	Rs. 25,000

(2) The security shall be refunded to the applicant if the investigation results in prosecution.