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Companies Act, 1956

Sec 237    -     Investigation of company's affairs in other cases.

Without prejudice to its powers under section 235, the Central Government

(a) shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if

(i) the company, by special resolution ; or

(ii) the Court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government ; and

(b) may do so if, in the opinion of the Company Law Board, there are circumstances suggesting

(i) that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of its members, or that the company was formed for any fraudulent or unlawful purpose ;

(ii) that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members ; or

(iii) that the members of the company have not been given all the information with respect to its affairs which they might reasonably expect, including information relating to the calculation of the commission payable to a managing or other director, or the manager, of the company.

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