Panel to review offences under Companies Act

The government on Sunday set up a 10-member committee to suggest ways to reduce harassment in prosecution for violation of the company law and handle certain offences through an in-house mechanism.

This is aimed at lessening the burden on trial courts, which can in turn concentrate on more serious offences. The committee is to give its report by mid-August. The government is keen to reduce harassment being faced for violation of some of the trivial aspects, and is therefore, setting up a committee to seek suggestions in this regard, a source familiar with the development said.

The committee set up by the Ministry of Corporate Affairs (MCA) will be headed by the Secretary of Ministry of Corporate Affairs, for review of the penal provisions in the Companies Act, 2013.

“The MCA 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,” a statement said. The committee will examine the existing offences punishable with fine only or punishable with fine or imprisonment or both, and decide 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 to be tried by a special court.

The committee will also review the provisions relating to non-compoundable offences and recommend whether any such provisions need to be recategorised as a compoundable offence.