Directors’ Right Of Inspection Of Company’s Books Of Accounts: A Judicial Detour Analysing The Development In The Scope
- IJLLR Journal
- Jul 2
- 1 min read
Ashtami Khatri, Campus Law Centre, Delhi University
Divyansh Solanki, Institute of Law, Nirma University
ABSTRACT
The directors’ right to inspect the books and accounts of a company is fundamental to corporate functioning and is an essential prerequisite for them to perform their duties effectively. The scope of this right however has been a matter of debate. This paper examines the nature of this right, analysing whether it is unrestricted or if reasonable restrictions can be imposed, based on the legal position as developed through the Companies Act of 1913, 1956 and 2013.
A key aspect is the judicial detour, tracing in a historical narrative how courts have balanced directors’ rights with concerns of confidentiality, misuse, and corporate interests. It also explores the nature of the term ‘other books and papers’ and the extent of inclusivity in the phrase.
Finally, this paper argues that while the right of inspection is a critical tool for directors to exercise oversight, it is not without permissible limits. Through an analysis of statutory provisions and case laws, the paper highlights how courts have drawn the line between transparency and potential abuse.
Keywords: Directors' Right of Inspection, Books of Accounts, Fiduciary duties, Companies Act, Judicial Interpretation,
