The Ministry of Corporate Affairs has decided to withdraw another 7,338 prosecutions pending before the courts under the Special Arrears Clearance Drive-II. The ministry has shared the information through social media.
The Special Arrears Clearance Drive – I was conducted in the year 2017 which resulted in the withdrawal of 14,247 prosecutions. The second one is just half of the number of cases withdrawn in the first.
The Central Government has taken a significant measure to enhance Ease of Doing Business and reduce the criminalization of compoundable offences under the Companies Act, 2013. This step has resulted in a noteworthy decrease of 21.86% in the number of pending prosecutions being actively pursued.
However, the prosecutions related to serious non-compoundable offences such as cheating, fraud, acceptance of deposits, pending charges, etc. are not considered for withdrawal.
Despite the fact that prosecutions for non-compoundable offences are not being dropped, there is growing concern among the public regarding the fairness of the legal system, even for the minor offences.
Recently, the company and its directors have been fined Rs. 20 lakhs by the Ministry of Corporate Affairs (MCA) due to their failure to appoint a whole-time secretary. The penalty was imposed as a result of a delay of 1683 days, with a cooling period of 6 months excluded from the calculation.
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