Centre approves withdrawal of 7,338 prosecutions pending before various courts

In order to promote ease of doing business and in furtherance of decriminalisation of compoundable offences under the Companies Act 2013, the centre has given the go-ahead for the withdrawal of 7,338 prosecutions, which are pending before various courts, under the Special Arrears Clearance Drive-II.

“This would be a significant decrease of 21.86 per cent in the pending prosecutions being pursued by the central government. However, prosecutions related to serious non-compoundable offences such as cheating, fraud, acceptance of deposits, pending charges, etc will not be withdrawn” the Ministry of Corporate Affairs (MCA) said in a statement.

The Government’s “Action Plan for Special Arrears Clearance Drives” for reducing the number of pending litigations had previously resulted in the withdrawal of 14,247 prosecutions during the Special Drive-I in the year 2017.

The MCA had constituted a committee to undertake a thorough review of all the pending litigations. Long pending prosecutions for compoundable offences have been identified for withdrawal, it said.

This decision is considered to help in unclogging courts as well as foster the growth of the corporate sector in India while maintaining a healthy corporate governance framework.

The cases being withdrawn under the Special Drive-II are corollary to the amendment brought out by the government vide the Companies (Amendment) Act, 2020 for the decriminalisation of offences under the Companies Act, 2013 to facilitate the smooth functioning of businesses as well as minimise lengthy litigations before courts.