Supreme Court has observed that the stipulation in sub-section (3) of Section 212 of the Companies Act, 2013, in relation to the submission of the report, is not mandatory, but directory.


If the investigation into the affairs of a company has been assigned by the Central Government to the Serious Fraud Investigation Office or to any authority, it should conduct the investigation in the manner and must obey the procedure provided in this law; and submit its report to the Central Government within such period as may be specified in the order.

Now there is a certain time limit given to conduct all the investigation if anyone or any authority cross these limitations or boundaries then they may be accused illegal or  late delivery of work and can be punished under this section 3 of the companies act, Now the question arises here is that why isn’t mandatory in the stipulation?

Because sometimes an investigation may take longer then usually it is due to some or the other reasons , but  that doesn’t mean it should always be late, if it is late for some xyz reasons then they should report to SFIO (Serious Fraud Investigation Office) and provide them proper reasons for the transfer of the investigation and reasons for the late work, but in the first place it shall conduct the investigation in proper manner and follow all the codes of conduct.

                                        It is directory but not mandatory because if this happens then serious fraud or crimes will always be under some or the other investigation and that’s not the motto. If the investigation process proceeds usually  for a longer period then already mentioned, under Section 167 of the Code certain rights may be granted in favor of the victim. But it is apparently not the idea that in case the investigation is not over within any fixed period, the authority to investigate would come to an end because it is directory under the codes of conduct and one must obey them while the whole investigation procedure goes on for the smooth course of conduct.


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