The government today said it has constituted a 10-member committee to review the penal provisions under the companies law and examine de-criminalisation of certain offences.
The high-level panel, chaired by Corporate Affairs Secretary Injeti Srinivas, would submit its report in 30 days to the government.
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 members.
The Corporate Affairs Ministry has set up the panel for review of the penal provisions in the Companies Act, 2013 to examine ‘de-criminalisation’ of certain offences.
The ministry "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 release said.
This would also allow the trial courts to pay more attention to offences of serious nature, it added. 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 triable by a special court," it noted.
Further, the panel would look at whether any non-compoundable offences -- offence punishable with imprisonment only, or punishable with imprisonment and also with fine under the Act, may be made compoundable.
As per the release, 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.
MCA21 is the portal for stakeholders to submit statutory filings under the Companies Act.
GSA Associate's Senior Partner Amarjit Chopra, Vidhi Centre for Legal Policy's Arghya Sengupta, former Ficci President Sidharth Birla, Smart Group's Partner Preeti Malhotra and a Joint Secretary of the ministry are also members of the panel.