Section 254 — Power of registrar to call for information or explanation

(1)
Where on a scrutiny of any document filed by a company or on any information
received by him under this Act, or any notice, advertisement, other communication,
or otherwise, the registrar is of opinion that any information, explanation or
document is necessary with respect to any matter, he may, by a written notice, call
upon the company and any of its present or past directors, officers or auditors to
furnish such information or explanation in writing, or such document, within thirty
days:
Provided that a director, officer or auditor who ceased to hold office more
than six years before the date of the notice of the registrar shall not be compelled
to furnish information or explanation or document under this sub-section.
(2) On receipt of the notice under sub-section (1) it shall be the duty of
the company and all persons who are or have been directors, officers or auditors of
the company to furnish such information, explanation or documents as required.
(3) If no information or explanation is furnished within the time
specified or if the information or explanation furnished is, in the opinion of the
registrar, inadequate, the registrar may if he deems fit, by written order, call on the
company and any such person as is referred to in sub -section (1) or (2) to produce
before him for his inspection such books and papers as he considers necessary
within such time as h e may specify in the order; and it shall be the duty of the
company and of such persons to produce such books and papers.
(4) If the company or any such person as is referred to in sub -section
(1), (2) or (3) refuses or makes default in furnishing any su ch information or in
producing any such books or papers—
(a) the company shall be liable to a penalty of level 2 on the standard
scale; and

(b) every officer of the company who authorises or permits, or is a party
to, the default shall be punishable with imprisonment of either
description for a term which may extend to two years, and shall also
be liable to fine which may extend to one million rupees and the
court trying the offence may, make an order directing the company
to produce such books or papers as in its opinion may reasonably be
required by the registrar.

(5) On receipt of such information or explanation or productio n of any
books and papers, the registrar may annex the same or any copy thereof or extract
therefrom to the original document submitted to him; and any document so annexed
shall be subject to the provisions as to inspection and the taking of extracts and
furnishing of copies to which the original document is subject.
(6) If the information or explanation or book or papers required by the
registrar under sub-section (1) is not furnished within the specified time, or if after
perusal of such information or expl anation or boo ks or papers the r egistrar is of
opinion that the document in question or the information or explanation or book or

paper discloses an unsatisfactory state of affairs, or that it does not disclose a full
and fair statement of the matter to wh ich it purport s to relate, the r egistrar shall
without prejudice to any other provisions, and whether or not action under sub -
section (3) or sub-section (4) has been taken, report in writing the circumstances of
the case to the Commission.