Govt to decriminalise some corporate offences

Tribune News Service

New Delhi, July 15

In an exercise to "decriminalise" certain corporate offences, the government has set up a panel for review of the penal provisions in the Companies Act, 2013.

In this regard, the Ministry of Corporate Affairs (MCA) has constituted a 10-member committee, headed by the Secretary of Ministry of Corporate Affairs, Injeti Srinivas.

Last week, the Narendra Modi government had raised the monetary threshold of filing appeals by the tax department which would reduce tax litigation.

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.

"This would also allow the trial courts to pay more attention on offences of serious nature", an official statement said.

MCA has decided that the existing compoundable offences in the Companies Act, 2013 - namely offences punishable with fine only or punishable with fine or imprisonment or both - may be examined.

Following the review, a decision may be taken as to whether any of such offences may be considered as "civil wrongs" or "defaults" where a penalty may be imposed in the first place and only on further non-compliance will it be categorised as an offence triable by a special court.

MCA said it is also required to be seen as to whether any non-compoundable offences namely offence punishable with imprisonment only, or punishable with imprisonment and also with fine under the Companies Act, 2013 may be made compoundable.

The committee will submit its report within 30 days to the central government for consideration of its recommendations.

Other members of the panel include T K Vishwanathan, former Secretary General, Lok Sabha, and Chairman, BLRC; Uday Kotak, MD, Kotak Mahindra Bank; Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas; Sidharth Birla, former president, FICCI, among others.