According to Section 245, the expenses of investigation are to be defrayed in the first instance by the Central Government. But the Central Government is entitled to be reimbursed by any person, who has been convicted on a prosecution instituted in pursuance of the report or required to pay damages as a result of the report. The company in whose name proceedings are brought is bound to reimburse the Central Government. Similarly, reimbursement can be recovered from any managerial personnel dealt with by the report and from the applicants.
Q 10. What are the provisions available in the Companies Act, 1956 for protection of employees during investigation?
.9Lns. Section 635-B of the Companies Act, 1956 protects gainst dismissal, discharge, removal, etc., of the employees of the company under investigation, who make disclosure during the course of investigation. The Section provides that if during the course of investigation under Sections 235, 237, 239, 247, 248 and 249, the company proposes to discharge any employee from service or punish him by way of dismissal, removal or reduction in rank, then the company must send to the Company Law Board (CLB) a previous intimation in writing of the action proposed to be taken against the employee. If the CLB has any objection to the action proposed to be taken, it must send a notice thereof to the employer. The CLB is not bound to hear the company or any other person before issuing the notice [Ashoka Marketing Ltd. Vs. Company Law Board. (1968)]. If the company does not receive any notice of objection from the CLB within 30 days of sending of the previous intimation of the action proposed against the employee, then the company may proceed to take the proposed action against the employee.
