Jan Vishwas bill will reduce compliance & judicial burden, bolster ease of doing business, say experts

Jan Vishwas Bill

The Jan Vishwas bill, which was passed in the Lok Sabha on July 27, is likely to reduce the compliance burden on businesses, experts said.

The bill, which seeks decriminalisation of 183 provisions in 42 different laws, was introduced in the Lok Sabha in December 2022. As many as 113 provisions of the bill pertain to ease of doing business.

The bill is considered a landmark as it is likely to serve as a guiding principle for future amendments in various laws, saving time and cost for both the government and businesses alike.

Acts such as the Public Liability Insurance Act, 1991, and the Information Technology Act, 2000, will be amended, where many offences that involve imprisonment will be replaced with just a monetary penalty.

Wasim Beg, Partner at law firm Luthra and Luthra, said “The decluttering was long overdue with Acts such as the Telegraph Wires (Unlawful Possession) Act, 1950, having largely lost their significance. Many of the compliances had lost their relevance. These regulatory hurdles were often reduced to paper compliances.”

Some offences that were decriminalised featured in centuries-old laws such as the Indian Post Office Act, 1898, and the Press and Registration of Books Act, 1867. The criminal consequences enshrined in these acts may have been relevant when they were introduced, but continuing them only increased the pain of doing business.

“The replacement of imprisonment with monetary penalties for many offences is a welcome step that shall improve the ease of living, and reduce compliances,” noted Tabrez Malawat, Partner at the law firm The Guild.

Experts divided

The bill is expected to lead to a reduction in criminal litigation, which comprises the majority of the pendency in Indian courts.

Of the 4.4 crore cases pending in courts, 3.3 crore are criminal suits. Over 41 lakh pending criminal cases are 20 to 30 years old, while over one crore criminal cases were instituted in Indian courts just last year. However, lawyers are divided over whether the bill will reduce pendency in the short term.

Beg said, “While this may not significantly reduce litigation, it certainly seems to have its heart in the right place.” However, Malawat noted that the bill could reduce unwarranted criminal litigation as it removes the need for court prosecution in many cases by simplifying procedures. “The bill aims to expedite resolution and encourage out-of-court settlements, leading to faster dispute resolution and a more efficient legal system,” he added.

“Whether this law will reduce litigation or not is something only time will tell. The provisions which are sought to be amended were anyways not very litigated,” said Sameer Jain, Managing Partner at PSL Advocates and Solicitors. Since the offences that are decriminalised belong to laws that are not frequently used, they are not a major contributor to pendency in courts, he explained.

A section of lawyers feel that since any criminal punishment needs court sanction, there is a good chance that the judiciary will not be burdened by such cases. Utsav Trivedi, Partner at TAS law, said, “As the bill converts imprisonments to penalties, court sanction would not be necessary to administer such punishments.”

“The authorities will proceed to levy the penalty and the further course of recovery of penalties, which can be challenged by the offender,” said Shashank Agarwal, Advocate, Delhi HC. But litigation in such cases is rare, he added.

Praveen Arora, Partner at BTG legal, added that the Jan Vishwas Bill will certainly improve the ease of doing business. He said: “This will not only reduce unnecessary litigation, it will also reduce the compliance and judicial burden.”

According to the Economic Survey of 2022-23, decriminalisation of minor economic offences under the Companies Act of 2013 has led to 4,00,000 companies voluntarily rectifying their past defaults to avoid penalties. Furthermore, after the reform, more than 1,400 default cases have been decided without going to a court of law.