MCA Has Constituted a 10-Member Committee to Review the Offences Under the Companies Act, 2013 (Download PDF)

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Ministry of Corporate Affairs (MCA) constituted 10 Member Committee to review penal provisions in Companies Act, 2013. Committee headed by Secretary of Ministry of Corporate Affairs will examine ‘de-criminalisation’ of certain offences.

Image of the Companies Act

Image of the Companies Act

Image of the Companies Act

Following Are Terms of Reference of Committee

  • To examine nature of all ‘acts’ categorised as compoundable offences & recommend if any of such ‘acts’ may be re-categorised as ‘acts’, which attract civil liabilities where company & its ‘officers in default’ are liable for penalty.

  • To review provisions relating to non-compoundable offences & recommend whether any such provisions need to be re-categorised as compoundable offence.

  • To examine existing mechanism of levy of penalty under Companies Act & suggest any improvements.

  • To lay down broad outline of in-house adjudicatory mechanism where penalty may be levied in MCA21 system driven manner so that discretion is minimised.

To take necessary steps in formulation of draft changes in law or any other matter that may be relevant in this regard.

Objective and Scope of Committee De-Criminalization

Commerce Ministry seeks to review offences under Companies Act, 2013, as some of offences may be required to be decriminalized & handled in in-house mechanism, where penalty could be levied in instances of default.

  • Allow trial courts to pay more attention on offences of serious nature.

  • Existing compoundable offences under Companies Act-2013 namely, offences punishable w/fine only or punishable w/fine or imprisonment or both may be examined.

  • Decision will have to be taken as to whether any of such offences may be considered as ‘civil wrongs’ or ‘defaults’, which will call for penalty by adjudicating officer. In that case, only after non-compliance of order of such authority will offences be categorised as offence triable by special court.

  • Committee will be required to examine whether any non-compoundable offences such as offence punishable w/imprisonment only or punishable w/imprisonment & w/fine under Companies Act, 2013 may be made compoundable.

  • Committee will be required to submit its report w/I 30 days to Union Govt. for consideration of its recommendations.

Table contain shows the Composition of the Committee

Table contain shows the Composition of the Committee

Composition of the Committee

S. no.

Member Name

Role

1.

Secretary, Ministry of Corporate Affairs

Chairperson

2.

Shri T. K. Vishwanathan, Former Secretary General Lok Sabha and Chairman, BLRC

Member

3.

Shri Uday Kotak, MD, Kotak Mahindra Bank

Member

4.

Shri Shardul S Shroff, Executive Chairman, Shardul Amarchand Mangaldas & Co.

Member

5.

Shri Ajay Bahl, Founder Managing Partner, AZB & Partners

Member

6.

Shri Amarjit Chopra, Senior Partner, GSA Associate

Member

7.

Shri Arghya Sengupta, Vidhi Centre for Legal Policy

Member

8.

Shri Sidharth Birla, Former President, FICCI

Member

9.

Ms. Preeti Malhotra, Partner and Executive Director of Smart Group

Member

10.

Joint Secretary (Policy), Ministry of Corporate Affairs

Member-Secretary

Ministry of Corporate Affairs

  • Union Minister: Arun Jaitley

  • Minister Of state: P. P. Choudhury.

- Published/Last Modified on: September 18, 2018

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