MCA approves withdrawal of 7,338 prosecutions pending before courts under Special Arrears Clearance Drive-II

In firm commitment towards its goal of promoting Ease of Doing Business and decriminalising compoundable offences under the Companies Act, 2013, the Central Government, through the Ministry of Corporate Affairs (MCA), has decided to withdraw another 7,338 prosecutions that have been pending before various courts under its Special Arrears Clearance Drive-II.

This would represent a huge drop of 21.86% in the Central Government’s pending prosecutions. Previously, the Government‘s “Action Plan for Special Arrears Clearance Drives” for lowering the number of ongoing litigations resulted in the withdrawal of 14,247 prosecutions during Special Drive-I in 2017.

The MCA has formed a team to conduct a thorough examination of all current litigations. Long-pending prosecutions for compoundable offences have been recognised for withdrawal. Prosecutions for significant non-compoundable violations such as cheating, fraud, accepting deposits, pending charges, and so on have not been considered for withdrawal. This bold measure would also help to clear the courts and promote the expansion of India’s business sector while preserving a sound corporate governance structure.

The cases being withdrawn under the Special Drive-II are a corollary to the amendment introduced by the Government in the Companies (Amendment) Act, 2020 for the decriminalisation of offences under the Companies Act, 2013 in order to facilitate the smooth operation of businesses and reduce lengthy litigation before courts.

Furthermore, these initiatives are being carried out in accordance with the notion that the Central Government should not be a compulsive litigant.