Inspection of Company’s Records


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Who can inspect the Registers and Records of a Company?

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  1. Please briefly explain why you feel this answer should be reported .


    NCLT (Mumbai Bench) interpreted the provisions inspection of registers. NCLT decoded Sec. 163(2) of Cos. Act, 1956 [corresponding to Section 94(3) of Cos. Act, 2013] w.r.t. the words “of any other person” in relation to the inspection of registers.

    Section 163(2) of Cos. Act, 1956 states that: The registers, indexes, returns, and copies of certificates and other documents referred to in sub-section (1) shall, except when the register of members or debenture holders is closed under the provisions of this Act, be open during business hours (subject to such reasonable restrictions, as the company may impose, so that not less than two hours in each day are allowed for inspection) to the inspection—
    (a) of any member or debenture holder, without fee; and
    (b) of any other person, on payment of such sum as may be prescribed for each inspection.

    Following are key observations:
    NCLT observed that “The word “any other person” cannot be taken on standalone basis to say, as the petitioner canvasses, that the person having no interest in the company is also entitled to seek inspection and copies thereof falling within the ambit of the section 163 of the old Act”.
    Tribunal stated that the word “any other person” mentioned in Section 163 cannot be construed that any person can seek inspection and supply of copies, though he has no commercial interest or any other kind of interest irrespective to the affairs of the company. A person could be called aggrieved only when such person interest is affected by the affairs of the company.
    NCLT further observed that the word “any other person” being preceded by the word “member or debenture–holder” being the persons holding interest in a company, the following word “any other person” cannot be said that it is extendable to the persons having no interest in the company. The Tribunal stated that “Apart from the member or debenture–holder, there being several other persons, having commercial interest in the company such as creditors, lenders, customers, employees, it can be said as referring to the category of persons mentioned above.”
    Tribunal ruled that “At any stretch of imagination, it cannot be said that this petitioner who hasn’t any kind of interest in this company cannot be said as entitled to seek inspection of the records falling in ambit of section 163 of the Companies Act, 1956”.
    An interesting observation by the NCLT was – “On the top of it, these companies being private limited companies, closely held by limited members, a rank outsider, like this petitioner, cannot be permitted to have any access to the books of account. It is not even the case this petitioner that these companies played fraud against him, therefore, he wants the inspection of the records of the companies.

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