1. Where in the course of an investigation under this Chapter, the inspector has reasonable grounds to believe that the books and papers of, or relating to, any company or other body corporate or managing director or manager of such company are likely to be destroyed, mutilated, altered, falsified or secreted, the inspector may—
a. enter, with such assistance as may be required, the place or places where such books and papers are kept in such manner as may be required; and
b. seize books and papers as he considers necessary after allowing the company to take copies of, or extracts from, such books and papers at its cost for the purposes of his investigation.
2. The inspector shall keep in his custody the books and papers seized under this section for such a period not later than the conclusion of the investigation as he considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person from whose custody or power they were seized:
Provided that: the inspector may, before returning such books and papers as aforesaid, take copies of, or extracts from them or place identification marks on them or any part thereof or deal with the same in such manner as he considers necessary.
3. The provisions of the Code of Criminal Procedure, 1973, relating to searches or seizures shall apply mutatis mutandis to every search or seizure made under this section.
Legal Commentary & Landmark Judgments: Section 220
Section 220 of the Companies Act, 2013 authorizes an inspector to seize books and papers during an ongoing investigation upon forming a reasonable belief that records may be destroyed, concealed, or falsified, governing the custody, inspection, and return of seized corporate materials.
During a Section 220 seizure, insist that the inspecting team prepare a granular, itemized panchnama listing every hard drive, physical register, and file seized, signed by independent witnesses. Immediately petition the inspector in writing under Section 220(2) for certified forensic mirror copies or physical extracts of critical operational accounting books to ensure ongoing business operations and statutory tax filings are not paralyzed.