Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation,
a. destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or is a party to the destruction, mutilation or falsification or concealment or tampering or unauthorised removal of, documents relating to the property, assets or affairs of the company or the body corporate;
b. makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or
c. provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447.
Legal Commentary & Landmark Judgments: Section 229
Section 229 of the Companies Act, 2013 imposes severe criminal liability under Section 447 for furnishing false statements, mutilating, altering, or destroying books and papers during an inspection, inquiry, or investigation, penalizing corporate evidentiary tampering as aggravated fraud.
In criminal trials under Section 229 read with Section 447, the prosecution must establish specific mens rea—that the accused intentionally destroyed, altered, or fabricated records with knowledge of the inquiry. Defense counsel must demonstrate that missing files were lost due to regular corporate document retention policy expiries or IT system migrations predating the Section 206 notice, negating the statutory ingredient of deliberate evidentiary destruction.