Prosecutions under the Diving Companies Act

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The Ministry of Commercial Affairs plans to withdraw lawsuits in specific cases, not involving a serious violation of the law, to eliminate avoidable disputes and improve the efficiency of the system, a person informed said.

As a result, lawsuits that have been pending for two years or more for breaches that may result in the removal of a company’s name from the records will be withdrawn. In addition, lawsuits that have been ongoing for at least five years other than those arising from investigations, inspections and investigations where notices remain unserved and the offenses at issue are aggravated will benefit from the government’s decision.

Lawsuits are also likely to be withdrawn in cases that have been pending for more than two years and are barred due to the statute of limitations and when delays have not been tolerated by the courts. The Code of Criminal Procedure provides for different limitation periods for hearing cases depending on the seriousness of the case.

“We are considering a plan to withdraw the charges in the long pending cases. Continuing with them is a burden on the public purse. However, these do not include any serious offences, and withdrawing prosecutions will improve the efficiency of the system. The decision to withdraw the charges will be made on a case-by-case basis after careful consideration,” said a second person with knowledge of the development. The list is being worked on, he added.

An email query to the Department of Corporate Affairs spokesperson on Friday has not received a response at press time.

The benefit of withdrawal from lawsuits will not be available to certain types of companies, including listed entities. Companies facing accusations of fraud will also not be eligible for withdrawal of lawsuits. Companies under the description of endangered companies – those that do not file returns or maintain a registered office at the declared address and whose directors cannot be traced – are not eligible for such relief.

In the case of companies failing to file annual returns, after the lawsuits are withdrawn, the authorities will go ahead and remove their names from official records.

This decision is part of the Center’s desire to improve the ease of doing business and the ease of living, for which the decriminalization of laws, measures to reduce litigation and streamline penalties have been businesses. The government has already decriminalized more than 60 criminal provisions in the Companies Act following two rounds of legislative amendments in 2018 and 2020. The Ministry of Industry Promotion and Domestic Trade is working on another draft bill to decriminalize commercial laws to reduce the compliance burden for businesses. businesses.

In September, Finance and Commercial Affairs Minister Nirmala Sitharaman had instructed tax officials to quickly settle long-pending grievance redress claims.

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