Committee to review penal provisions under Companies Act

New Delhi, July 15 (IANS) A 10-member committee has been set up to review the penal provisions under the Companies Act and examine de-criminalisation of certain offences, the government announced on Sunday.

A Corporate Affairs Ministry release said the committee, chaired by Corporate Affairs Secretary Injeti Srinivas, would submit its report in 30 days to the government. 

The Corporate Affairs 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, it said. 

"This would also allow the trial courts to pay more attention on offences of serious nature. 

"Consequently, it has been decided that the existing compoundable offences punishable with fine only or punishable with fine or imprisonment, or both, may be examined and 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 will it be categorised as an offence triable by a special court," it added. 

Well-known banker Uday Kotak, former Lok Sabha Secretary General T.K. Vishwanathan, law firm Shardul Amarchand Mangaldas Executive Chairman Shardul S. Shroff and AZB & Partners' Founder Managing Partner Ajay Bahl are among the members of the panel. 

According to the ministry, 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 committee would seek to put in place the broad contours of an in-house adjudicatory mechanism where penalty may be levied in a system driven manner so that discretion is minimised, the statement said.