New Delhi: The Union Ministry of Corporate Affairs (MCA) has taken a decision under its Special Arrears Clearance Drive-II to withdraw 7,338 prosecutions, which have remained pending before various courts. This is the second such move after the Ministry had withdrawn 14,247 prosecutions during the Special Drive-I in 2017.
The Ministry said the decision to this effect was taken with the objective of promoting Ease of Doing Business and in furtherance of decriminalisation of compoundable offences under the Companies Act, 2013.
It said the action will result in a significant decrease of 21.86% in the pending prosecutions being pursued by the Central Government. It claimed prosecutions related to serious non-compoundable offences such as cheating, fraud, acceptance of deposits, pending charges, etc. have not been considered for withdrawal.
The MCA had constituted a committee to undertake a thorough review of all the pending litigations and to identify for withdrawal, long pending prosecutions for compoundable offences.
“This decisive step will also unclog the courts as well as foster the growth of the corporate sector in India while maintaining a healthy corporate governance framework,” the Ministry stated.
The cases being withdrawn under the Special Drive-II are corollary to the amendment brought out by the Government vide the Companies (Amendment) Act, 2020 for decriminalisation of offences under the Companies Act, 2013 to facilitate the smooth functioning of businesses as well as minimise lengthy litigations before courts.
“Besides, it is also part of the principle that the Central Government should not be a compulsive litigant, that these drives are being undertaken,” the Ministry stated.
– global bihari bureau