PROSECUTION MECHANISM UNDER COMPANIES ACT- panel submits report
At present, all offences committed under the Companies Act are required to be prosecuted in trial Courts as criminal offences, even in respect of insignificant and trivial matters.
There are about 45,000 cases pending in various Courts and about 2,000 cases are added to the list every year.
The average period of disposal of cases is about 5 years and the average amount of fine imposed per case comes to Rs.2, 247/-.
As a result, the disposal of the cases involving serious breaches of law, which adversely impacted the interests of investors and other stakeholders, is delayed considerably.
In this background, the Ministry of Company Affairs had constituted an Expert Group in May 2005, to examine the issues relating to the streamlining of the prosecution mechanism under the Companies Act, 1956 and to advise the Ministry and the panel has submitted its report yesterday. Details of the recommendations are not available.