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

This would be a significant decrease of 21.86 percent in the pending prosecutions being pursued by the Union government.

The Ministry of Corporate Affairs (MCA) 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 aimed towards decriminalisation of compoundable offences under the Companies Act, 2013, and promote ease of doing business.

“This would be a significant decrease of 21.86 percent in the pending prosecutions being pursued by the Union Government. However, prosecutions related to serious non-compoundable offences such as cheating, fraud, acceptance of deposits, pending charges, etc. have not been considered for withdrawal,” the ministry said in a statement on July 14.

This decisive step will also unclog the courts as well as foster the growth of the corporate sector in India while maintaining a healthy corporate governance framework, it said.

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 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.

The cases being withdrawn under the Special Drive-II are corollary to the amendment brought out by the Government vide the Companies (Amendment) Act, 2020 for decriminalisation of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