Director's right of inspection through authorised agent upheld, subject to confidentiality undertakings and specified document scope.

Section 209 statutory entitlement permits a director to inspect company books and papers and to exercise that right through an authorised agent provided the agent gives a confidentiality undertaking; the same principle is applied here. Inspection is allowed of company records for the last eight years in favour of the director and/or his chartered accountant and/or his advocate, subject to an undertaking that information obtained will be disclosed only to the director. Petitioners must provide respondents access to documents relied upon in the company petition, and respondents must file affidavits in reply within the fixed timetable to prevent delay.

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Issues: Whether respondents (including a director) are entitled to inspection of the entire records of the company and on what terms.

Analysis: Section 209 of the Companies Act, 1956 recognizes a director's entitlement to inspect the books of account and other books and papers of the company. Established authority permits a director to exercise that right through an agent provided the agent gives an undertaking to disclose information obtained only to the director. The applicants (petitioners) possess the company records and contested the inspection request as an attempt to delay proceedings; however the entitlement under section 209 and the permissibility of inspection through an authorised agent with a confidentiality undertaking apply to the present facts. Specific terms for inspection, including scope (documents for the last eight years), permitted persons (the director and/or his chartered accountant and/or his advocate), and requirement of an undertaking by the chartered accountant/advocate, are set to give effect to the statutory right while protecting confidentiality. Timetables for offering inspection and filing of affidavits in reply were fixed to prevent delay.

Conclusion: Inspection of the entire records of the company for the last eight years is allowed in favour of respondent No. 2 (the director) and/or his chartered accountant and/or his advocate, subject to an undertaking that information obtained will be disclosed only to respondent No. 2; petitioners must also provide respondents Nos. 2 to 8 inspection of documents referred to and relied upon in the company petition; respondents Nos. 2 to 8 must file affidavits in reply within six weeks.

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