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The Ministry of Corporate Affairs (MCA) has constituted a 10 Member Committee, for reviewing the penal provisions under the Companies Act, 2013.
All offences under the Companies Act are criminal offences. The review will involve an examination for the ‘de-criminalisation’ of certain offences.
The Committee will be headed by the Secretary of MCA, Injeti Srinivas. It also consists of members of the legal community including Shardul Shroff of Shardul Amarchand Mangaldas, Ajay Bahl from AZB & Partners as well as and former Union Law Secretary T.K. Vishwanathan.
The mandate of the Committee, inter alia, is to examine the nature of all ‘acts’ categorised as compoundable offences under the Companies Act and to check if any of these ‘acts’ may be re-categorised as ‘acts’ which attract civil liabilities.
The Committee will further have a re-look at the offences which are not compoundable under the current law to recommend whether any such provisions need to be re-categorised as a compoundable offence.
The Committee will also examine the existing mechanism of levy of penalty, suggest improvements if needed, and further lay down the broad contours of an in-house adjudicatory mechanism where the penalty may be levied in an MCA21 system driven manner so that discretion is minimised.
(Read the MCA order)