C.A. Examinations Questions

QUESTIONS

Q; 1. What books and papers of a company can be inspected by an officer authbrised to carry out inspection under Sec. 209-A (1 )(ii) of the Companies Act, 1956?

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Inspection of Books and Papers
Under Section 209-A the officer authorised to carry out inspection of a company is authorised to inspect its books of accounts, such as ledger, cash book, journal and vouchers, and 'other books and papers'. 'Other books and papers', as defined in Sec. 2(8), include deeds, writings, and documents. The officer usually inspects all statutory registers, books of account of the company. In C. V. Karupunni Vs. Joint Director, Inspection, Company lAw Board (1986) 56 Compo Cas. 814, the Kerala High Court held that the principles of ejusdem generis have to be applied in deciding the question as to the type of books and documents the inspecting officers are entitled to inspect. In other words, the documents and papers referred to in Sec. 209-A(I) which the inspecting officers are entitled to inspect must be those which have the character of books of accounts. Books and papers as per Sec. 2(8) include vouchers, deeds, writings and documents. Applying the principle of ejusdem generis, the inspecting officer can inspect vouchers, deeds and documents relevant to entries in books of account and other books and papers, the inspecting authorities cannot make a roving enquiry into all the affairs of the company. The scope of inspection of books of account and other books and papers under Section 209-A has its limits and has to be distinguished from the investigation under Sec. 237.

Q; 2. What registers of a company can be inspected by its members?

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Inspection of Registers by Members
The registers which can be inspected by the members are:
(i) Register of investment not held in company's name (Sec. 49).
(ii) Register of charges and copies of instruments creating charge (Sec. 144). (iii) Register of members and index of members (Secs. 150 and 151). (iv) Register and index of debentureholders (Sec. 152).
(v) Foreign register of members.
(vi) General meetings minute book (Sec. 195).
(vii) Register of contracts in which Directors are interested (Sec. 301). (viii) Register of Directors' shareholdings (Sec. 307). (ix) Register of Directors, Managing Director, Manager, Secretary (Sec. 303).
(x) Register of loans and investments (Sec. 372 A).
Q 3. When is it mandatory on the part of the Central Government to appoint Inspectors to investigate the affairs of a company'? Discuss the powers of the Inspectors under such circumstances.