In firm commitment to its aim of promoting ease of doing business and in support of the decriminalization of compoundable offenses under the Companies Act, 2013, the central government through the Ministry of Corporate Affairs (MCA) has made a decision under its Special Arrears Clearance Drive-II to withdraw 7,338 other cases, which remain pending in various courts.
This would represent a significant decrease of 21.86% in pending cases prosecuted by the central government. The government’s “Special Back Settlement Drives Action Plan” to reduce the number of pending cases previously resulted in 14,247 prosecutions being dropped during Special Drive-I in 2017.
The MCA had set up a committee to undertake a thorough review of all pending disputes. Long pending cases for compoundable offenses have been identified for withdrawal. Proceedings relating to serious non-aggravatable crimes such as fraud, fraud, acceptance of deposits, pending charges, etc. were not taken into consideration for the withdrawal. This decisive step will also unblock the courts and boost the growth of the corporate sector in India while maintaining a healthy corporate governance framework.
The cases withdrawn under Special Drive-II are the corollary of the Government’s amendment to the Companies Act (Amendment) 2020 to decriminalize offenses under the Companies Act 2013 to facilitate the smooth functioning of businesses and minimize lengthy litigation before the courts.
Furthermore, it is also part of the principle that the central government should not be a compulsive litigant that these actions are taken.