Penal provisions in review by panel, reports to go to Arun Jailey

A government-appointed panel tasked with reviewing the penal provisions under the Companies Act is likely to submit its report to Corporate Affairs Minister Arun Jaitley this week, a senior official said.

Headed by Corporate Affairs Secretary Injeti Srinivas, the ten-member committee also had the mandate to examine de-criminalization of certain offenses as part of larger efforts to ensure that courts get more time to deal with offenses of serious nature under the Act.

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.

A senior Corporate Affairs Ministry official said the panel is expected to submit its report to the minister this week and it is likely on August 27.

Announcing the setting up of the panel last month, the ministry said it "seeks to review offenses under the Companies Act, 2013 as some of the offenses may be required to be decriminalized 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 to offenses of serious nature, the ministry had said in a release.

The panel is expected to suggest ways that would allow trial courts to pay more attention to offenses of serious nature under the Act.

In his monthly newsletter, Srinivas said the committee is to examine the nature of all acts categorized as compoundable offenses.

These are offenses punishable with fine only or punishable with fine or imprisonment or both under the Act.

According to him, the committee would recommend if any of such acts may be re-categorized as those which attract civil liabilities wherein the company and its officers in default are liable for the penalty.

"The panel would seek to put in place 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 minimized," Srinivas said in the newsletter for the month of July.

MCA21 is the portal for stakeholders to submit statutory filings under the Companies Act.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)