Govt sets up 10-member panel to review penal provisions under companies law
The Ministry of Corporate Affairs on Sunday announced that it has constituted a 10-member committee to review the penal provisions under the companies law and examine decriminalisation of certain offences.
The high-level committee, chaired by Corporate Affairs Secretary Injeti Srinivas, would submit its report in 30 days to the government.
The Ministry of Corporate Affairs seeks to review offences under the Companies Act, 2013 as some of the offences may be required to be decriminalised and handled in an in-house mechanism, where a penalty could be levied in instances of default.
This would also allow the trial courts to pay more attention on offences of serious nature, according to an official statement.
Noted banker Uday Kotak, former Lok Sabha Secretary General T K Vishwanathan, law firms Shardul Amarchand Mangaldas' Executive Chairman Shardul S Shroff and AZB & Partners' founder managing partner Ajay Bahl are among the other members of the committee.
According to the Ministry, it has been decided that the existing compoundable offences in the Act -- offences punishable with fine only or punishable with fine or imprisonment or both, may be examined.
"A decision may be taken as to whether any of such offences may be considered as civil wrongs or defaults where a penalty by an adjudicating officer may be imposed in the first place and only consequent to further non-compliance of the order of such authority will it be categorised as an offence for trial by a special court," it noted.
Further, the panel would look at whether any noncompoundable offences -- offence punishable with imprisonment only, or punishable with imprisonment and also with fine under the Act, may be made compoundable.
According to the official statement, the committee would examine the nature of all acts and recommend if any of such acts may be re-categorised as acts which attract civil liabilities wherein the company and its officers in default are liable for penalty.
"The panel would seek to put in place the broad contours of an in-house adjudicatory mechanism where penalty may be levied in a MCA21 system driven manner so that discretion is minimised," the release said.