Ordinance in Works to Amend Penal Provisions in Companies Act, Cabinet to Clear

New Delhi, Oct 9 (PTI) The government plans to bring an Ordinance to amend the Companies Act which will de-criminalise certain offences, an official source said.

Finance Minister Arun Jaitley, Railways and Coal Minister Piyush Goyal and Commerce and Industry Minister Suresh Prabhu along with Corporate Affairs Secretary Injeti Srinivas on Tuesday deliberated on changes to be brought about in the Act with regard to the penal provisions.

"An Ordinance is being planned for bringing about the changes. The Cabinet will clear it," the official told PTI.

The government in July had set up a 10-member committee, under Srinivas, to look into the possibility of de-criminalisation of certain offences under the Companies Act, 2013.

The move is aimed at de-clogging the system by decriminalising offences which can be dealt in an in-house mechanism so the trial courts would be able to pay more attention on offences of serious nature.

The panel was also tasked with making non-compoundable offences compoundable. Non-compoundable offences are those offence which are punishable with imprisonment only, or punishable with imprisonment and also with fine under the Act.

The committee recommended such acts which may be re-categorised as those which attract civil liabilities wherein the company and its officers in default are liable for penalty.

Noted 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 some of the members of the panel. The committee submitted its report in August.

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