Decriminalisation fires up RoC action

Near-fivefold jump in orders eases load on judicial system, aids businesses

- Gireesh Chandra Prasad

Registrars of Companies (RoCs) stepped up action after the 2019 decriminalisation of various company law violations, resulting in a near fivefold jump in orders in just four years. These orders entail a penalty but no prosecution, easing the load on the judicial system and freeing up companies to focus on their business.

Over 2019 and 2020, the government decriminalised over four dozen violations for faster adjudication of corporate defaults and lapses. These cases are now decided upon by Rocs under the Ministry of Corporate Affairs (MCA), which are staffed by members of the Indian Company Law Service.

MCA data showed that RoCs issued 157 orders on such cases in 2019, a number that jumped to 765 in 2023 till 22 November.

In 2019, the Companies Act was amended to decriminalise 16 technical and procedural breaches such as failure to file annual returns and issuing shares at a discount, which could be objectively assessed and involved no injury to public interest.