MCA, vide notification dated August 24, 2017 has formulated and released the Companies (Arrests in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017, which dictate that:

  • the Director, Additional Director or Assistant Director of the Serious Fraud Investigation Office (“SFIO”) investigating into the affairs of a company, other than a Government company or foreign company has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under section 212 of the Act (“Investigation into Affairs of Company by Serious Fraud Investigation Office”), he may arrest such person.
  • where an arrest of a person is to be made in connection with a Government company or a foreign company under investigation, such arrest shall be made with prior written approval of the Central Government.
  • The Director, Additional Director or Assistant Director, while exercising powers under sub-section (8) of section 212 of the Act, shall sign the arrest order together with personal search memo, and shall serve it on the arrestee and obtain written acknowledgement of service.
  • The office of Director, SFIO shall preserve the copy of arrest order together with supporting materials for a period of five years a) from the date of judgment or final order of the Trial Court, in cases where the said judgment has not been impugned in the appellate court; or b) from the date of disposal of the matter before the final appellate court, in cases where the said judgment or final order has been impugned, whichever is later.
  • The provisions of the Code of Criminal Procedure, 1973, relating to arrest shall be applied to every arrest made under this Act.

Further, the arrest form and the personal search memo formats are attached to the Rules released by MCA. As per the provisions of Section 212 of the Companies Act, 2013, some of the offences that classify for arrest under the Regulations in question are furnishing of false or incorrect information, of which he is aware, with the Registrar at the time of incorporation and registration of a Company, fraudulently inducing another to invest money in the Company, or making or abetting an application in a fictitious name to a company for acquiring, or subscribing for, its securities, in any manner whatsoever. The exhaustive list of offences can be found in Section 212 of the Companies Act, 2013.