New Delhi: In an attempt to improve the ease of doing business in India, the corporate affairs ministry is set to decriminalize offences of a less serious nature under the Companies Act, 2013.
The ministry said in a statement on Sunday that it has set up a 10-member panel led by its secretary Injeti Srinivas to review penal provisions in the Companies Act, 2013, as some of the offences may be required to be decriminalized and handled by an in-house system of adjudicating officers, where a penalty could be levied in cases of default.
“This would also allow the trial courts to pay more attention on offences of serious nature," said the statement.
It added that compoundable offences—or the less serious ones—in the Companies Act, 2013 which are punishable with fine only or punishable with fine or imprisonment or both will be reviewed to decide whether these may be considered as ‘civil wrongs’ or ‘defaults’ where a penalty by an adjudicating officer may be imposed in the first place. Only non-compliance of the order of the officer will be deemed as offence warranting a trial by a special court.
The panel will also review if any non-compoundable offences—the more serious ones—which are punishable with imprisonment only, or punishable with imprisonment and also with fine under the Companies Act—may be made compoundable. The panel has been given a month to give its report. Company law deals with statutory compliance requirements and corporate governance related matters of private and public limited companies as well as of not-for profit firms. The move comes within a week of the government raising the monetary threshold for filing appeals in various courts on tax disputes aimed at lowering tax litigation. The BJP government is keen to improve India’s ranking in the World Bank’s Doing Business report to the top 50.
Noted banker Uday Kotak, former Lok Sabha secretary general T.K. Viswanathan, law firms Shardul Amarchand Mangaldas’ executive chairman Shardul S. Shroff and AZB & Partners’ founder managing partner Ajay Bahl are among the members of the panel.